Urban One Targets $20 Million In Cost Savings.

Urban One CEO Alfred Liggins says management is taking an aggressive look at expenses heading into 2027 as the company navigates continued weakness in the advertising marketplace, particularly in radio and national digital.

“We’re hyper-focused on cost reductions heading into next year, and we’ve identified $20 million — at least $20 million — of annualized savings thus far that we’re working on and will put into effect,” Liggins told investors during the company’s third-quarter earnings call Tuesday (Nov. 10).

Liggins said market conditions in radio "continued to adversely impact our revenue in the third quarter," with political advertising providing some assistance but falling short of expectations. Urban One generated approximately $800,000 in net political revenue during the quarter, while the company now expects about $8.8 million across all divisions for the full year.

Radio's political contribution has been particularly disappointing. "It was weaker in radio than we anticipated," Liggins said. "We budgeted about $11 million, and we're shy of that by about two and a half, actually going to come in at about $8.4 million for radio alone."

The company also received a boost from its July acquisition of Service Broadcasting Group, which added Dallas stations KKDA and KRNB. The stations contributed approximately $1.9 million in net revenue during the quarter.

Despite the challenging environment, Urban One's radio operation continued to perform better than the broader advertising market. CFO Peter Thompson said local sales were down 5.1%, compared with a 9.2% decline for the market, while national sales increased 4.2% against a market decline of 2.1%, according to Miller Kaplan.

Thompson said the company's largest advertising category was services, which increased 6.5%, primarily because of legal services. Government and public advertising also increased, reflecting political spending, while entertainment was another category posting growth. Most other major categories were flat or down.

The outlook for Reach Media reflects a broader challenge facing the audio business. Thompson attributed the segment's year-over-year revenue decline primarily to lower demand in the audio marketplace, which he said "continued to be down double digits."

Reach Media reported an adjusted EBITDA loss of $1.1 million for the quarter. Its operating expenses declined 4.8%, primarily reflecting lower affiliate station expenses and sales commissions, but the expense reductions were not enough to offset the revenue pressure.

Digital presented a mixed picture, with local sales improving in Urban One's radio markets while national direct business remained under significant pressure.

"In the third quarter, we saw an increase in local digital revenue in our radio markets," Liggins said. However, he added, "large client attrition and suppressed rates in national direct digital revenue meant significant revenue declines in the overall digital segment."

Thompson said the national direct business was affected by "focused spending and lower effective rates as a result of decreased demand." The company reduced digital operating expenses by 15.6%, primarily through lower traffic acquisition costs and sales commissions.

The combination of advertising pressures led Urban One to lower its full-year 2026 adjusted EBITDA guidance to $40 million. Liggins characterized the revision as a response to "the realities of the current advertising marketplace."

The company is also looking to control expenses across its operations. Consolidated operating expenses, excluding depreciation and amortization, stock-based compensation and impairment charges, declined during the quarter. Radio expenses were down 3.7%, while Reach Media and digital also recorded lower operating costs.

Urban One's third-quarter results included substantial non-cash impairment charges tied to its radio and cable television businesses. The company also continues to manage its debt, reporting approximately $308.1 million in net debt at Sept. 30.

The Dallas market transactions represented another area of change for the company's radio portfolio. Urban One completed the $22 million acquisition of Service Broadcasting Group on July 17, including KKDA and KRNB, after selling KZMJ to Fusion Dallas LLC for $6 million earlier in July.

Liggins did not offer a detailed breakdown of the planned $20 million in savings during the prepared remarks but made clear that expense reductions will be a management priority as Urban One moves into next year.