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Salem Media Left Out of Political Ad Spending

Revenue from political advertising will be less of a factor this year than in previous presidential cycles for Salem Media Group Inc., according to executives with the Camarillo Christian and politically conservative broadcaster, publisher and online content provider. On a March 12 call with analysts to discuss fourth quarter earnings, Salem Chief Executive Edward Atsinger III said that political revenue was only $400,000 during the quarter, compared with $1.7 million in the same period a year earlier. Asked by Michael Kupinski, director of research of Noble Capital Markets Inc., in Boca Raton, Fla., what the anticipated political revenue would be in the first quarter, Atsinger responded it would not be a significant. “If you think about where a majority of the political spending has been thus far, certainly on the presidential side, it has been on the Democratic side and we have not seen much,” Atsinger added. “But I would expect probably for the quarter it will be a couple of hundred thousand dollars.” Political spending is difficult to predict, Atsinger said in response to Kupinski asking how much political revenue Salem would see for the year. But in the last two political cycles, the company had averaged about $4 million in political advertising, he added. “I don’t know where the key races are going to be relative to where our stations are, but to get something in that range seems to make sense,” Atsinger said. For the fourth quarter ending Dec. 31, the company reported a net loss of $4.5 million (-17 cents a share) compared with a net loss of $3.1 million (-12 cents) in the same period a year earlier. Revenue decreased by 3.8 percent to $64.6 million. Revenue from Salem’s three business units – broadcasting, digital media and publishing – were all down during the fourth quarter. Revenue decreased by about 6.5 percent for the Christian teaching and talk format and dropped by 4.1 percent at Salem’s 12 contemporary Christian music stations, he added. The publishing side includes the Regnery Publishing imprint and Xulon Press, a self-publishing digital publisher of books targeting a Christian audience that Salem acquired in 2006. The self-publishing revenue was down by 15.3 percent. David Evans, the president of new media, said during the conference call that the decrease was partially due to a difficulty in retaining a full sales staff during 2019. “We lost some key members, and it took some time to replace them. We are fully staffed again, and we think 2020 will be better than 2019,” Evans said. Book publishing Regnery’s revenue, on the other hand, was up by 4.6 percent based on a stronger book release schedule in the fourth quarter of 2019 compared to 2018, Atsinger said. During the quarter, the publisher released “Guilty By Reason of Insanity: Why the Democrats Must Not Win,” by David Limbaugh, the brother of radio host Rush Limbaugh, and “Marlon Bundo’s Best Christmas Ever,” based on the rabbit of the family of Vice President Mike Pence and written by his eldest daughter Charlotte Pence and illustrated by his wife Karen Pence. “As we transitioned into the 2020 presidential election here, we expect to have a solid year publishing books,” Atsinger said. “A number of good titles will be released as we get closer to the latter part of the election cycle.” Salem released its fourth quarter earnings before the coronavirus pandemic began. On March 27, it withdrew its first quarter 2020 guidance due to expectations of lower revenue from the impact of coronavirus on advertising, programming events and book sales. In a research note put out that same day, Kupinski said the guidance fit with his estimates and that there were elements of Salem that would be a ballast to advertising-losses, such as its block programming, increased traffic to its faith-based and news oriented mobile apps and websites and cost reductions. Still, Kupinski was of the opinion that Salem had a favorable outlook going forward. “While it is difficult to predict when the advertising picture will improve given the unprecedented event and impact on its businesses, we believe that the company will have the capacity to weather the storm,” Kupinski wrote.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.
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