Despite the revenue downturn, is radio still an undervalued cash flow generator?
Steal: Absolutely, radio remains a positive cash generator, and an extremely effective customer conduit; it’s just not realistic for growth multiples of old to be applied in the current economic environment. Block: No. Fisher: Radio does produce significant free cash flow, even in a stressed revenue scenario. Lange: YES, most stations I’ve worked with turn in over 35% cash flow and I bet you could go to 90% of the companies on the stock markets and not even get close to that level year after year. Our problem is that we can’t grow it – when you are at that level it’s very hard to get a meaningful percentage in growth. Taz: Taking radio public and taking on enormous debt was a self-defeating fantasy. While it returned embarrassing short-term gains to some, it has resulted in irreparable harm to the industry. Why? In doing so, it turned radio over to the markets. The markets want eternal, never-ending, quarter-after-quarter earnings growth – growth – growth. In spite of being an extraord
