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Saga Communications Inc. Message Board

  • staffordites staffordites Sep 20, 2000 11:10 AM Flag

    Saga getting clobbered by Clear Channel

    Saga stations are going to have serious trouble
    competing against the sheer size and resources of the Clear
    Channel/AM-FM mega-merger. Saga's ratings are way down in key
    markets like Milwaukee, Des Moines, Norfolk, Columbus and
    Champaign. Clear Channel owns stations in all of those
    cities, and they're stealing market share from Saga like
    crazy. Analysts are downgrading Saga stock, based on
    fears of a slowdown in ad spending for the coming year.
    Questionable aquistions like the ones in Ithaca, NY and
    Northampton, MA aren't going to help Saga's bottom line at
    all. I wouldn't be surprised to see SGA in single
    digits by this time next year. The only thing that will
    turn this company around is a buyout. If it were a
    Saga shareholder, I would be very concerned about my
    investment right now.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Dear Staffordites: My name is Ed Christian and I
      am President and CEO of Saga Communications. Shame
      on you for spreading misinformation on a quality
      stock like Saga.
      Let me respond to your falacious
      comments:

      First off Saga Communications has no trouble
      competiting with Clear Channel. We share the following
      markets: Manchester NH, Springfield Mass, Norfolk Va,
      Columbus Ohio, Milwauakee Wisc, and Des Moines Iowa. In
      only one market do we have a competitive situation
      with Clear Channel and that is in Des Moines Iowas
      with one FM out of our cluster of 4 FM's and 2AM's.
      Additionally they are not beating us in the ratings on our
      core demographics. In fact, contrary to what you
      state, the Spring Arbitron Reports for all Saga Markets
      show that we had an excellent report and continued our
      dominance with our properties. We have NOTHING to
      appologize about for our ratings.
      Nobody is stealing
      market share from us. Additionally you mention Champaign
      Illinois where we operate 3FM stations. Clear Channel does
      NOT operate in Champaign Illinois.

      One analyst
      recently reduced us to a "HOLD" and this was First Union
      who still has a one year target price of $24.00 per
      share. Based on the recent sector problems we expect
      that this HOLD rating will be revisited
      shortly.

      Now, on to acquisitions. In Ithaca New York we
      purchase 2 AM stations and 2 FM stations. These are
      wonderful properties with substantial cash flow and are
      well positioned and well regarded. We like this market
      as we feel it offers solid growth potential. Also
      Ithaca is home to Cornell University and Ithaca College.
      From our beginnings we have been partial to college
      towns and state capitals. Regarding Northampton, if you
      spent a moment to locate it you would notice that it is
      tangental to Springfield Mass where we operate classic rock
      station WAQY. In Northampton now we have active rock
      station WLZX 99.3FM. In essence we have gone from a stand
      alone FM station in Springfield to a demographically
      paired duopoly. Certainly this is an upgrade and a long
      term nice buy.

      Saga for the last fourteen years
      has continued to grow each year and this year will be
      no exception. There are fears of slowdown in every
      industry but radio has always been and always will be
      recession resistant. This has been true for the last sixty
      years in this industry and I see no reason for it
      changine now.

      I am the largest individual
      shareholder in the company and I have the same number of
      shares now that I did when the company went public. I am
      not a seller and will continue to build the value of
      this company as we have consistently done. We believe
      that an abberation has occured flamed on by people
      like yourself with consistently inaccurate
      information.

      I am not concerned about my Saga
      investment and if you are, please do sell your shares as
      there are plenty of buyers for our stock out
      there.

      Ed Christian

      • 2 Replies to edradiotv
      • Mr. Christian,

        Thank you for taking the
        time to respond to posters. I have just become
        interested in Saga Communications and appreciate seeing the
        President of the company taking the time to
        respond.

        Sincerely,

        Steve K.

      • Mr. Christian---First of all, let me state that I
        am not a Saga shareholder, and therefore, I have no
        axe to grind with you or your company. Obviously you
        take issue with my opinion that Saga stations will
        have trouble competing with Clear Channel, but I stand
        by my statements and can back them up with
        facts.

        Let me first address the issue of ratings. You say
        the Clear Channel stations are not beating Saga in
        "core demographics", which is a rather ambiguous
        statement. Since I don't have access to specific demographic
        ratings in all of Saga's markets, I am using the most
        recent Arbitron numbers for persons 12+ for my figures.
        Those numbers indicate that Saga's ratings are
        primarily down, as compared to a year ago. For example, in
        your largest market, Milwaukee, 3 out of the 4 Saga
        stations have lower ratings in the Summer 2000 book, as
        compared to the Summer 1999 book. Classic Rocker WKLH went
        from a 5.8 share to a 5.6. Your Oldies station in
        Milwaukee, WJMR went from a 3.4 last summer, to a 2.4 in the
        most recent summer book. And WFMR went from a 2.4 to a
        1.6 over a year. In Columbus, your top-rated station,
        WSNY dropped from a 7.3 to a 7.1 share in persons 12+.
        Saga's ratings in Des Moines are even more appalling,
        especially from your 2 AC stations there. KSTZ has gone from
        an 8.3 share to a dismal 5.6 share in one year's
        time. KLTI has slid from 5.2 to 4.6 in 12+. Manchester,
        NH is a market dominated by Boston stations, and
        Saga's WZID has dropped nearly 5 full share points in
        the past year...from 21.5 in the Summer '99 book to
        16.8 in 2000. You cannot dispute any of these figures,
        as they are widely available in radio trade papers
        and web sites such as rronline.com.

        With
        regard to your recent acquisitions, you purchased 4
        stations in Ithaca, NY, which is a tiny college town of
        less than 90,000 people (market size #263). I
        seriously doubt that owning stations in such a small,
        seasonal market will have any positive impact on Saga's
        balance sheet. The station in Northampton, MA is perhaps
        the most questionable acquisition, since you have
        decided to program WLZX with a mixture of alternative and
        classic rock. There are already 4 rock stations available
        in the Springfield area...3 from nearby Hartford, CT
        and your own classic rocker, WAQY-FM. You're merely
        canabolizing your own market share in Springfield by having
        WLZX play some of WAQY's core artists.

        Your
        company's stock repurchase announcement managed to prop up
        SGA's share price, at least temporarily. But the fact
        that Saga stock has gone from $25 to $15 in the last
        few months is no abberation....it's the start of a
        trend. Your attempt to lay the blame of your company's
        stock plunge on someone who simply posts their opinions
        in a public forum is a sad commentary on your
        ability to grow the business and enhance shareholder
        value of Saga Communications.

        --Staffordites

 
SGA
41.76-0.74(-1.74%)Dec 24 1:01 PMEST

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