Saga Communications, Inc.
Q4 2020 Earnings Call Transcript

Published: 12 Mar 2021

[Operator:]

Good morning, ladies and gentlemen, and welcome to the Saga Communications Fourth Quarter and Year-End Earnings Release. At this time, all participants are placed on listen-only mode. It is now my pleasure to turn the floor over to your host, Ed Christian. Sir, the floor is yours.

[Ed Christian:]

Good morning, everybody. And let me again, have the pleasure of introducing you to after many years you should all know him. The amazing Sam Bush will dazzle you with numbers as it begins. So let’s begin. Okay, go ahead.

[Sam Bush:]

Let’s go. Thank you, Ed. This call will contain forward-looking statements about our future performance and results of operations that involve risks and uncertainties that are described in the Risk Factors section of our most recent Form 10-K. This call will also contain a discussion of certain non-GAAP financial measures. Reconciliation for all the non-GAAP financial measures to the most directly comparable GAAP measure are attached in the selected financial data table.

[Ed Christian:]

As always, thank you, Sam. And let today be the last day that we discussed 2020, it is baked and over and truth. I actually thought we would be done with 2020 and then like November. I didn’t use the word pandemic there, but I thought we would be done with that in November, but it was not to be. We were right back in pandemic turn in late November and through December and even January of 2021. And it still kind of is lingering out there. When this was all over the second wave or the third wave, and it was all over the media and it drove our advertisers right back to where they were before. It looks like the economy was improving.

[Sam Bush:]

Yes, we did have one question that came in and it basically was asking about what our policy was or what our future was when we were talking about the internet/podcasting and our activity in web broadcasting, which are mainstreaming and so forth and how we were doing that to defend our enviable dominant position in local markets.

[Ed Christian:]

Well, let’s talk about streaming first off. We are doing very well in monetizing it, and I think we’ll be up about 3 times the revenue that we had last year. The issue of course, is it SoundExchange’s rates, their rates, which means that we have to work harder just to meet the delta of servicing the money to SoundExchange for the right to play music on the internet. And that’s a problem there. As far as podcasting goes and you might have some numbers on this, I’m not sure. The way we can look at it and view it is we have – I understand that and I understand it’s great for social media communication, and it certainly has a function and a purpose, but it’s got to the point that it’s almost and it’s getting bigger every day. It’s getting too big to make it economically feasible to make any profit in podcasting. Sam, do you have any numbers at all?

[Sam Bush:]

Yes, we’ve done some research on this Ed, and an article that we’d gotten here not long ago from Edison Research had indicated that there are currently, and this changes every day, apparently. But currently over 1,750,000 podcasts that are available as of January of this year. And that includes over 43 million episodes of those podcasts. And I think that what you were pointing out is that the industry – the podcasting issue is just so fragmented that it’s very difficult to monetize the podcast. And I think that’s what some of the others that have gone into podcasting in a significant fashion have found is that you can have a lot of podcasts and a lot of listeners, which there are a lot of folks that listen to podcasts. But it’s just tough to monetize.

[Ed Christian:]

I think part of the problem really is to survive, they’re taking remnant inventory and remnant inventory is that which is left up in his soul, very cheaply. It’s like – this is the word remnant reflects on the garment industry. And I think the problem is they can do some really interesting stuff in podcasting, but can they make it – is it anything more than a boutique. Now, there are some that are quite profitable, coupled again, we are ones and a few of the other ones, but for the most part they’re still in the range of boutiques and struggling to find money to do that. And when money is available it’s at a very cheap price point. So I think that’s all that I have. Anything else that we missed today?

[Sam Bush:]

Yes. The only thing I would do is add to your streaming comment. That in just recent conversations, I mean, we’re doing a lot of different things on the streaming side to enhance the revenue. As you were saying, Ed we’ve separated our streams from our over the air broadcasts. We’re selling sponsorships on the streams and in our website. We’re selling ad inventory with some streaming injections, but also selling a lot of local inventory to our clients on our streams versus on the air. We’re working with our clients on targeted display, targeting audio advertising, targeted display advertising, targeted video advertising, banner ads, pre-rolls, we’ve got a very active interactive – very active interactive department. So I think we’re seeing a lot of growth in that this year, as you said.

[Ed Christian:]

No. And that’s – that was something we purposely designed to revamp probably a year and a half ago. Yes. What we were doing and how we were doing to make that an actual profit center of the company. And it’s turned out that it is becoming that very nicely. So I’m really pleased about what we’ve done on that. So again, if you have questions call Sam, call me. We thank you for your time. We thank you for being interested in Saga. If you’re a Saga’s shareholder, you see that fast 10 times, sums up to you and we promise our commitment to continue to do what we’ve been doing for all these years now. So thank you very much, and that should be it for this time. And we’ll see you all in about 90 days, right? Sam?

[Sam Bush:]

Well, a little less than that since we are in March now, and next month in May, the first quarter always sneaks up on us.

[Ed Christian:]

Okay. Thanks everybody. We appreciate it very much.

[Sam Bush:]

Thank you, Catherine. We’ll turn it back over to you.

[Operator:]

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[Operator:]

Thank you, ladies and gentlemen, this does conclude today’s conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.

[Sam Bush:]

Thank you, Catherine.