Ms. Goldwasser: It was a very tough period generally for advertising- based businesses. What we learned throughout the period beginning in the second half of 2000 through the end of last year is that Spanish- language media outperforms general market media in good times and bad. I estimate that Spanish-language media revenues increased 4% in 2001 compared to a decline of 6% for the general ad market. Clearly, there were several things going on in 2001 that made it an unusually difficult advertising environment for all broadcasters. In the beginning of the year, broadcasters struggled with the disappearance of dot-com advertising. Then, the economy proved to be dramatically weaker than we had anticipated at the beginning of the year. Finally, the tragedy of September 11 and the impact it had on advertisers' willingness to spend took its toll on industry revenue in the fourth quarter. From what I can tell, the ad market did not deteriorate further in the first quarter of 2002, but the recovery will likely be gradual, not robust.
TWST: For the most part, how did the radio stations operators approach
the advertising conundrum in the days following the events of September
11?
Ms. Goldwasser: Different broadcasters seemed to handle it in different
ways, according to media buyers we've spoken with recently. Some
broadcasters and stations allowed their advertisers to cancel
advertising. They tried to work with their advertising clients,
understanding the sensitivity that was necessary in those days following
September 11. Other broadcasters were less gracious, and that might come
back to haunt some of those stations that didn't treat their advertisers
as partners in the last quarter of last year.
Tickers included in this excerpt: CXR, ETM, EVC, HSP, KM, MSO, SIRI, UVN, WON, XMSR
For more information call (212) 952 7433. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.