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.
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.
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.