Radio Equity Ahoy!

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Business has not been good for anybody during the Great Recession, and while radio has seen some improvements, it is still catching up from a protracted slump. That is why one thing I try to watch with regularity is the behavior of investors.

I think it speaks to the improving stability and profitability of our medium that the beginning of this year has seen a small flurry of deal activity in the sector. It’s generally a token of stability when people are willing to put money behind your efforts.

Now, as Daniel Housemann of the Wall Street Journal‘s Private Equity Beat reports, there seems to be even more show of positive financial activity in the radio world.

Crestview and Atlanta-based Cumulus are betting on a radio rebound. The industry has struggled in recent years, and Citadel Broadcasting Corp. was the most prominent of several bankruptcies. But the largest company in the sector has shown improvement. CC Media Holdings Inc., which controls Clear Channel Communications and is backed by Thomas H. Lee and Bain, saw a fourth quarter profit after losing about $5 billion in 2008’s fourth quarter.

“We feel radio will come out of this better positioned than when it went into the recession,” Dickey said.

“Through it all, people continue to listen to the radio,” Marcus added

You see Cumulus Media, Inc., and Crestview Partners partnering up to  purchase radio broadcasting companies, with a possibility of making up to $1 billion worth of such deals. In addition, Crestview and other unnamed investors are providing about $500 million inequity, with expectations of  raising about $500 million in debt financing for their new entity: Cumulus Radio Investors LP.

All indicators seem to be pointing to a rebound, and investment trends is usually a pretty good one as indicators go. Let us hope we continue to see positive financial trends on this level.

Image: AMagill on Flickr / CC 2.0

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