RI’s Media Stocks Are Getting Crushed - Local Media May Feel the Pain

GoLocalProv News Team and Kate Nagle

RI’s Media Stocks Are Getting Crushed - Local Media May Feel the Pain

The stock market has been on a wild ride for the past couple of months and there have been few categories of stocks getting hit harder than media stocks.  The implication for Rhode Island’s local media may be very significant. 

Other than GoLocal and RINPR (a not-for-profit), all of the other Rhode Island news comes from sources that are owned by out-of-state billion dollar companies — radio, TV and the statewide newspaper. The pie in which legacy is fighting for continues to get smaller and smaller.

The amount of change and acquisitions is dizzying and the pace is only getting quicker.

GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST

The implications could be significant and adversely impact the quality of local content. If you like listening to local talk like Buddy Cianci and John DePetro over listening to syndicated national shows, the 80% loss in stock value by Atlanta-based Cumulus Broadcasting may have implications in Rhode Island.  Local talk radio is getting harder and harder to find in America.  Cumulus’ competitors like iHeart Radio, which owns 920 WHJJ and other stations in the market, have cut their local content to nearly zero - only one day-part per day.

WPRO still runs local content from 6 a.m. to 9 p.m. each day, highlighted by Gene Valicenti, DePetro and Cianci.

“[Cumulus] will only cut more local content across the board if they feel they have no other choice.  I do not believe they are at that point,” Michael Harrison of Talkers magazine told GoLocal on Tuesday. 

Get your media scorecard out - Who Owns Who:

Media General (WPRI-12) — Today, they own WPRI-12, the second rated station in the market. Previously, Media General owned WJAR-10, but shed the station to Sinclair Broadcasting. Media General’s stock hit a 52-week high of $18 a share and then plummeted when the company announced that it was buying Meredith Media Group. Media General was going to pay $2.4 billion to Meredith for the deal announced last month.  That deal sent the stock plummeting and Media General hit a 52-week low of $9.74 a share - more than a 40% drop in value.
But wait - a leading investment group, Nexstar, has made a hostile takeover bid to buy Media General and block the Meredith Group. In addition to Nexstar others are opposing the Meredith acquisition. “Oppenheimer, which owns a 7 percent stake in Media General, is not supporting the transaction, according to a letter the investor wrote to the Richmond, Va.-based operator of 71 TV stations last weekend, two sources close to the situation said,” reported the NY Post.

Cumulus (WPRO) — The second largest radio group in the U.S. owns WPRO-AM, WPRO-FM and four other stations in the Providence market.  Cumulus’ stock has been punished over the past few months, dropping from a 52-week high of $4.51 a share to a close yesterday of $0.79 (up from last week’s low of $0.68 a share).  Cumulus’ performance was so dire, its longstanding CEO Lew Dickey stepped down and was replaced by former Magazine Publisher Association boss Mary Berner.  Locally, the two top executives, GM-Barbara Haynes and head of sales Joe Lembo, were removed in the past few months.
“I am not confident that today’s overblown radio groups can be run effectively no matter who is in charge,” said Harrision.

New Media Investment Group/GateHouse (Projo) — The Providence Journal's parent company has been on an acquisition binge. The publicly traded parent company (New Media) stock was rolling along and hit a 52-week high of $25.77 a share, but has dropped by 36% as the stock closed on Tuesday at $16.31 a share. The Projo did a round of layoffs just before the sale by Dallas-based AH Belo to New York-based GateHouse. Recently, the company offered more buyouts.

Sinclair Broadcast Group (WJAR) — The most stable of the media groups has been WJAR-10’s parent company, Sinclair Broadcast Group.  The company’s stock has remained fairly consistent closing Tuesday over $27 a share and only slightly down from a 52-week high of $32.50 a share in March.  Sinclair now owns, operates or runs the sales for 164 TV stations in the U.S.

More Consolidation or Breaking Up 

The constant corporate spasms of consolidations and staff reduction have consistently reduced the number of positions for local staff. 
In radio, some see the future of iHeart Radio (WHJJ and WHJY) and Cumulus as being one of restructuring and selling off stations and clusters.  “I believe all the current major, establish consolidated conglomerates will have to sell stations in order to survive,” said Harrison.

 

 

Moore News

Enjoy this post? Share it with others.