The uncertainty surrounding last month’s election may have resulted in “hesitancy” among advertisers, but Townsquare Media CEO Bill Wilson says the clear and quick results have rapidly changed the mood. “We’ve seen people starting to place ads, particularly for December and into Q1,” Wilson said. He says categories like automotive, real estate, retail, and entertainment are among those showing improvement. Speaking at a BofA Securities conference Tuesday (Dec. 3), Wilson said the turnaround has occurred among both national and local advertisers.
Local sales remain the “cash cow” for Townsquare, Wilson says, with national sales now contributing less than 10% of total company revenue. Yet the mood shift means that Townsquare’s declines in national sales have “moderated,” according to Wilson. They were down as much as 20% for the fourth quarter a month ago, and while they are still off by double-digits compared to a year ago, he said the movement is in the right direction.
“Our growth driver is digital, but we don’t think we’d have the success we’ve had in our digital advertising and digital marketing solutions without the connection of radio,” he said.
Political revenue was lighter than expected for Townsquare this year, despite record spending. The company had $13 million in total political advertising, which was less than the $16 million it had budgeted for. Wilson said they expected bigger totals in Michigan, the one swing state where they own stations, and the lack of a presidential primary also cut into totals.
“It was still the second-best year ever in the company’s history,” Wilson said. “I don’t think it’s a situation where we’re not going to get those dollars in 2026 and 2028, I just think it’s where you’re situated in terms of the battlegrounds.”
No Cuts To Digital Spending
After several other radio groups have announced layoffs and budget cuts in recent weeks, CFO Stuart Rosenstein said Townsquare has no immediate plans to cut costs but is constantly reviewing expenses. He also expects a “little help” with lower inflation and interest rates, saying they have been tougher on people living in middle America compared to the big cities.
“If revenues decline faster than we expect, in the broadcast business there’s a lot of levers you could pull and save a lot of money,” Rosenstein said. But he added that they continue to invest in the digital business. “We’re not looking for cost [savings] there,” he said, explaining their penetration into the markets where the company operates still has plenty of room to grow their digital marketing services business.
“We’re not really competing on a digital basis against anybody in our markets,” Rosenstein said. “The radio competitors are either small mom and pops, and they have one or two stations or even two clusters — we’re the 900-pound gorilla in digital in our marketplaces.”
Wilson says the success that Townsquare has had with digital has led it to be approached by several other broadcasters, outdoor media, and print companies looking to leverage its services as a white-label product. They have already begun working with an undisclosed company in Nevada, as well as striking a deal with SummittMedia to help them sell digital services in the nine markets where the radio group operates. Wilson predicts Townsquare could bring in as much as $4 million in new revenue next year from leveraging its digital assets, predicting it could blossom into a $50 million division within four years.
“We’re already in discussions with some significant other broadcasters in the space who would like to see the success we’ve had in programmatic, as well as some smaller mom and pops,” Wilson said. He said the threshold for Townsquare to enter a market would be roughly $500,000 in digital sales to make their investment worthwhile.
Watching For Washington Deregulation
The new year will bring in big changes in Washington, including fresh leadership at the Federal Communications Commission. Wilson is hoping the focus will turn toward deregulation, including allowing broadcasters to grow the size of their companies.
“My expectation is deregulation is definitely going to happen. It’s just a matter of when it’s going to happen,” Wilson said. “I think once that loosens up, we’ll have a more competitive landscape to compete. And I think the opportunity for acquisitions will be there.”
Townsquare’s last major acquisition was the $18.7 million deal to buy Cherry Creek Radio in 2022. The deal included 34 stations in nine markets. Wilson said since that deal closed, they are on track to double the profit and cash flow of the Cherry Creek stations within the three- to five-year timeframe, giving him confidence that adding more radio assets would benefit the bottom line.
“Anything’s possible. Clearly, the record is showing we’re clearly an acquirer,” Wilson said. However, he points to the Summit partnership as another option to grow revenue without spending any money to buy stations.
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