radio digital revenues to climb 4.8% next year. iHeartMedia’s digital audio segment, which includes its podcasting business, grew 23.4% year-over-year to $254 million in the third quarter. That accounted for 26% of the company’s consolidated revenue, up from 12% in the first quarter of 2020. Podcasting revenue alone accounted for $91.3 million, up 42.1% year-over-year. At Cumulus, digital revenue growth of 20% far outstripped overall revenue growth of 5% in the third quarter.
Radio companies have taken measures to weather financial uncertainty that will extend into 2023. Cost-cutting remains popular after companies sharply reduced expenses in 2020. IHeartMedia saved about $250 million from 2020 to 2021 — a reduction of historical annualized cost base of about 10% — and targeted an additional $75 million of annual savings this year, said Bressler. Cumulus is “on track to be more than $75 million below the 2019 baseline” of fixed costs, said Berner.
Whatever happens in 2023, radio companies are better prepared than they were for the pandemic in 2020. That downturn “was probably the swiftest and worst downturn I’ve ever lived through,” said iHeartMedia’s Pittman. “And even in that year we had positive free cash flow.” its price target for iHeartMedia shares from $18 to $13 in an investor note issued Monday. iHeartMedia shares fell 15.1% over Tuesday and Wednesday, to $6.61. Year to date, iHeartMedia shares are down 68.6%.
Shares of Cumulus Media rose 8.9% following its third-quarter earnings release on Oct. 28 — although the stock gave back those gains and more over the next week and a half. As of Wednesday, Cumulus shares are down a relatively mild 38.7% year-to-date. Investors pushed up the share price 39.9% on April 14 onthe offer and instead offered shareholders a $50 million stock repurchase program. In June, Cumulus spent $25 million to purchase 1.7 million shares, or 8.7% of outstanding Class A shares.
Audacy shares fell 6.3% to $0.298 on Wednesday following the company’s third-quarter earnings release, bringing the year-to-date decline to 88.3%. Audacy shares were trading at $0.59 per share on Aug. 1 when the company was notified by the New York Stock Exchange that it was not in compliance with a listing standard that requires a minimum closing price of $1 over 30 consecutive trading days.
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