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Entercom Communications Corp (NYSE:ETM)

Q4 2007 Earnings Call

February 21, 2008 4:30 pm ET

Executives

Steve Fisher - EVP and CFO

David Field - President and CEO

Analysts

Marci Ryvicker - Wachovia Securities

Lee Westerfield - BMO Capital

John Blackledge - JP Morgan

David Miller - SMH Capital

Mark Wienkes - Goldman Sachs

Bishop Cheen - Wachovia

Barry Schwartz - Chatham Asset Management

Jim Goss - Barrington Research

Operator

Good afternoon and welcome to Entercom's fourth quarter earnings release conference call. All participants will be able to listen-only until the question-and-answer session of the call. This conference is being recorded.

I would like to introduce your first speaker for today's call, Mr. Steve Fisher, Executive Vice President and Chief Financial Officer. Sir, you may begin.

Steve Fisher

Thank you, operator. And thank you everybody for joining us this afternoon. Before I give the obligatory disclaimer I would like to make a note that there is a new phone number for the replay of the conference call that's noted in today's earnings release, which we just sent out. And now before we begin the meet of today's call I would like to remind you today's call will contain certain forward-looking statements that are based on certain expectations and involve risks and uncertainties.

The company's actual results could differ materially from those projected. Additional information concerning factors that could cause actual results to differ is described in the company's SEC filings on Forms 10-Q, 10-K and 8-K. The company assumes no obligation to update any forward-looking statements.

During this call, we may reference certain non-GAAP financial measures. We would refer you to our website at entercom.com for a reconciliation of such measures and other pro forma financial information we might mention.

And now, we turn the call over to David Field, President and Chief Executive Officer.

David Field

Thanks, Steve. And good afternoon and thanks everyone for joining us on today's call. As usual, I'll provide some additional color on the results we released today and then share some thoughts on recent developments and business conditions.

First, I'm very pleased to report a strong quarter of operating and financial results. Starting with operation same station revenues grew fractionally during the fourth quarter. We held same station operating expense growth to less than 1% enabling us to achieve margin growth and an increase in same station operating income. We achieved this performance despite challenging industry conditions and a deteriorating overall macroeconomic environment.

In fact, our increase in same station revenues compares quite favorably with our markets, which declined 4% during the quarter. Strong revenue development efforts, excellent cost controls and solid execution across our station platform enabled us to achieve these results.

Here are a few other significant headlines in the fourth quarter. It is worth noting that we are able to grow revenues despite a $2 million decline in political revenues during the quarter. In fairness I should point out that we did experienced significant increase in revenues related to the Boston Red Sox World Series victory. But this additional baseball revenue was equal to only about 1.5 of the political decline.

Our results were enhanced by significant growth in our core initiatives of business development, digital and brands and content. In fact, digital revenues nearly doubled. Fourth quarter performance was led by excellent execution and strong results in a number of our markets led by Seattle, Boston, Greensboro, Norfolk, and Indianapolis.

Finally, national and local results were essentially equivalent. I'm also very pleased to report strong earnings and free cash flow growth for the company during the quarter. Entercom's free cash flow per share grew by significant double digits to $0.80 per share. In addition adjusted income per share increased from $0.37 to $0.40. The ability to generate outstanding free cash flow has always been one of radio's strongest characteristics. Unfortunately, investors appear to have largely discounted or ignored radio's outstanding free cash flow generation. It is well worth noting that even in a difficult economic environment; we are not only able to produce enormous free cash flow, but to grow it further.

As I mentioned earlier on this call and throughout our calls and presentations over the past couple of years, we remain vigilantly focused on accelerating our revenue growth through a number of core initiatives, including business development, digital and brands and content. We are making significant investments in each of these core areas. And our efforts are bearing fruit and we are becoming increasingly adept and effective by developing innovative multiplatform marketing programs for our local and national customers.

Rather than just to make these sweeping overviews, I thought it would be constructive to provide a couple of snapshots of how our new initiatives are changing the way we do business. My first example is KNRK, our Alternative Rock station in Portland. KNRK plays a highly organic mix of Alternative music, including a healthy dose of local and regional artists, and is very active in the local music scene. They have made a number of evolutionary innovative changes to enhance the brand's engagement with local listeners, across multiple platforms.

For example, when major Alternative bands play concerts in Portland, one of our listeners is given backstage access and a video camera to create a bootleg video of the concert experience through their very own eyes. The footages are then placed on our website, where other listeners can access it.

We have also created a new HD2 based radio station that plays nothing but local Pacific Northwest Indie bands, and is also screened on KNRK's website. These are just two of a number of innovations that exploit the uniquely compelling opportunities to further engage our listeners with our brands, and the results are pretty compelling. In 2007, KNRK achieved double digit growth in ratings and double digit growth in broadcast cash flow.

One other example on the sales side comes from our recent work with Scion. Scion was attempting to develop creative unconventional grassroots ways to connect their brand with their target audience of hip, text savvy young adults. We developed an innovative marketing program that ran in several of our markets that incorporated a number of our branded digital applications, and added additional customized elements. The marketing plan included customized ringtones for listeners, sponsorship of the bootleg video program I mentioned a moment ago, which also ran on YouTube, plus a full schedule of integrated radio and website advertising.

A highlight was a listener cover art contest, where the band Snow Patrol agreed to use one of our listener's original designs as the cover art for special edition Snow Patrol CD. And the winning design was also featured on a special edition Scion car. Most importantly, the campaign was highly successful with Scion achieving strong sales results in great buzz. For those critics who question radio's future as an ad medium, there is a very-very powerful and dynamic story here.

Truth is that radio and its related integrated marketing capabilities offer far more horsepower today as a marketing vehicle than ever, particularly at a time when so many other marketing competitors faced great challenges. Radio has always had a ubiquitous reach, now we also have a powerful arsenal of diverse marketing tools and increasingly creative marketing ideas for our customers. At Entercom, we are changing our sales culture and working to enhance perception of advertisers on radio as a marketing vehicle. There is great potential upside for radio in general and for Entercom in particular, as this work continues.

Now turning to the ratings area. We had a solid set of four Arbitron results; in particular we achieved excellent performance in Denver, Portland, Milwaukee and Greensboro. And of course there will always be some winners and losers but overall we are very pleased with their performance.

During the first quarter of 2008 unfortunately business conditions are soft. Based on current market conditions we expect to finish the quarter down at mid single digit. Comments from other media leaders lead us to believe that this is not a radio issue. It is a broad based economic challenge affecting a wide variety of media companies.

There is of course no way to determine how the general economy will perform over the rest of the year. However there is a silver lining to the story. First we have someone encouraged by considerably stronger second quarter facings that are currently up low single. Although I do want to point out that it is far too early to draw any meaningful conclusions from Q2 data.

In addition, we continue to see excellent revenue growth opportunities from our core initiatives digital, brand and content and business developments and we have also been very effective in managing our expenses to ensure virtually flat operating expenses.

Most significantly we expect to be able to increase our free cash flow per share in the first quarter of 2008 and for the year, as a whole. This is worth repeating. Despite a projected mid single digit reduction in revenues in the first quarter we will be able to deliver significant free cash flow growth. As I noted earlier this is an enormously powerful and overlooked part of the radio story and in particular the Entercom story.

With that I'll turn it over to Steve.

Steve Fisher

Thank you, David. First let me give you a couple of notes on our guidance and then I'll talk about the quarter and the year. The guidance we provide to you today is based on same station comparison as pro forma now for all the transactions, which we have materially completed. I would note that we have three stations in Rochester, New York, where we have pending dispositions. We have a trustee operating in these stations and revenue expense results will be reflected in the line item, discontinued operations. Therefore any results from these three small stations are not reported in our operating revenue or expense, and therefore not included in our guidance.

As David indicated and for the first quarter of the year we expect same station revenues to dip down in the mid single digit range as compared to the prior year. But we also expect station cash expenses to be down by about 1% for the quarter. And looking ahead to the rest of the year on our operating expense line, we don't see any significant peaks or valleys in our operating expenses like we experienced last year for the onetime step up in the sports contract.

For comparison purposes our prior year first quarter same station information is $99.1 million in net revenues and $65.9 million in station operating expenses and note that this expense base excludes non-cash compensation expense. A reconciliation of this information and other non-GAAP measures is on our website.

A few other notes on 2008 line items to assist in your modeling. For our corporate G&A in the first quarter, we expect approximately $5.2 million. Our non-cash compensation expense for the first quarter should be about $2.4 million and then we would expect to see a step up for the three subsequent quarters of the year to approximately $2.6 million per quarter.

On our balance sheet, we'll have higher D&A in the first quarter, as we amortize some short lived assets from our closing in the fourth quarter of our various transactions. With that note, we would expect D&A in the first quarter to be approximately $5 million and we would expect D&A in the subsequent quarters to be about $4.5 million.

Sometime during 2008, we'll most likely have additional short lived amortization, when we do close our stations swap at Bonneville. Now this is an exchange of assets, it's the non-cash transaction but it will cause a short-term spike in D&A when we close that at some point during the year.

Also for 2008, we anticipate no TBA fees. David said earlier on our nice pickup in free cash flow was a great story. And in fact, we expect to significantly lower our financing costs from last year. And let's look at financing cost as being the combination of our interest expense and our TBA fees. Now that we have closed we are not paying TBA fees but we are paying interest expense on our acquisitions. This year we will benefit from our favorable new bank deal, which we put in place last summer from lower LIBOR rates that you have seen trending overall.

In addition, our interest costs are lower than our corresponding TBA fees. So, with that background, our net interest for the first quarter should be approximately $12.8 million in the first quarter. Now last year, our first quarter financing costs were approximately $16 million. So, you can see the nice pickup in free cash flow just in the first quarter and that trend will continue through the year on our financing cost.

Our tax rates for the year should be about 43%. This will exclude any onetime adjustments and a reminder there will be quarterly fluctuations to that target rate. And on Streets estimates for the year what you have currently put on the company we would again expect to pay no cash taxes given the tremendous tax shields we have from our intangible amortizations. And assuming no share buybacks in the quarter, we would forecast our diluted share count in the first quarter of 2008 to be approximately $37.9 million.

CapEx for 2008 we targeted about $10 million. It's kind of lumpy when we realized that in fact you will note that in the fourth quarter we did not have the amount of CapEx that we have previously forecasted due to a delay of a few projects in 2008. It's kind of neat through if you step back to see the multiyear trend is we are reducing CapEx as we have wrapped up several building facility projects and move towards the conclusion of our HD deployment efforts.

And now a few notes on the fourth quarter and we will turn it over to you for your questions. As David mentioned earlier, we achieved a slight increase in our same station revenues for the quarter and this was versus the prior year, where we had a 3% same station growth also where we realized about $2.7 million in political revenues. Obviously our revenue growth rate significantly outpaced that of our markets, which continue to see share gains and the continued growth in digital.

Our recent acquisitions performed very nicely reflecting on the earlier work done to restructure the brands and the staff. We had no significant cost issues in the quarter frankly or really for the year with the exception of the second and third quarter onetime step up in our Red Sox contract which we mentioned earlier. If you look back on the first quarter our station OpEx was up less than 1% as it was the fourth quarter and regarding down for the first quarter of 2008 so a nice trend. It was a nice tidbit for fourth quarter.

With the lower financing costs, fewer shares outstanding, as a result of our buyback the downward trend in CapEx and continued strong cost management for the fourth quarter we achieved record free cash flow per share. So it's kind of a neat highlight of our business model.

An update on leverage we ended the year 2007 with bank leverage of 5.6 times now. Note that's pro forma for our early January sale, two weeks in the January of an Austin FM station for $20 million. And also in the fourth quarter since we don't amortize our intangibles on an ongoing basis, we and other companies value these assets periodically. We value the implied value of our FCC license and the value of any goodwill that we carry on our books. This quarter and the fourth quarter we took a non-cash write-down on the carrying value of the FCC licenses in three markets based on an outside appraisal.

This write-down does not necessarily reflect Entercom stations operating performance of those markets, but is kind of the generic value of the license based on a variety of factors. So, before we go to questions let's look at the year 2007 in perspective. During the year we purchased $2.2 million in shares. We closed on some great acquisitions and we have been returning cash directly to shareholders. Since we began our dividend program in 2006 we have paid out now $3.04 per share directly to our shareholders. And then last week, our board of directors announced the first quarter dividend of $0.38 per share payable on March 28 to shareholders record of March 14.

So, with that preamble we'll turn it to you for questions. Operator, if you'll open the lines.

Question-and-Answer Session

Operator

Thank you, sir. At this time we'd like to begin the question-and-answer session of the conference.

(Operator Instructions) The first question comes from Marci Ryvicker with Wachovia Securities. You may ask your question.

Marci Ryvicker - Wachovia Securities

Thanks. On your last conference call, Q4 guidance was for revenue to be flat to down 2%, but you ended up slightly positive. So, where was the upside was it at your stations or at your other initiatives such as digital? And then, secondly, for Q1, how did you do in January versus the negative 6% reported by the RAB, and has there been a lot of fluctuation from month to month?

Steve Fisher

There is no magic answer, Marci, to the first question. It really is a little bit of a lot of things. And I think I summarized it earlier by saying I think we just executed pretty well across most of our markets. We had some good digital growth. We had some good business development growth and sort of a of little things that added to a strong relative performance versus our initial guidance.

As far as first quarter is concerned, as you know, we guide it down mid-single digits, and we're essentially pacing in line with that. I wish we had a better story. But that is what it is when I say that its general advertising economy right now particularly in the first quarter is somewhat choppy, and we've heard that from lots of immediate it's not radio story.

David Field

Okay. To add a little color to that Marci of the three months in the first quarter for what we've on the books, January does reflect to be weaker, February, March looks stronger at the moment. We've baked all that in our guidance that we gave you.

Marci Ryvicker - Wachovia Securities

Great, thank you.

Operator

The next question comes from Victor Miller with Bear Stearns. You may ask your question. Mr. Miller, please check your mute button.

David Field

Operator, why don't we move ahead and we'll circle back to Victor a little later.

Operator

Thank you. The next question comes from Lee Westerfield with BMO Capital. You may ask your question.

Lee Westerfield - BMO Capital

Thank you, gentlemen, and good evening. Two questions, if I may, Steve and David. First, you mentioned that national and local I think in the fourth quarter performed comparably and is a remarkable statistic for national, so I wonder if you could elaborate on your national fared? What seems to be stronger than most of the radio groups in the fourth quarter?

And secondly, Steve, this might be a particular question, but the taxes for the outlook for 2008 zero taxes, or is there a room for a tax benefit along the way on the current tax line, how should we'll be thinking about that?

Steve Fisher

Well, I'll do that first, and then I'll turn it over to David, Lee. Yes, we'll pay no taxes on 2008 based on streets guidance. And I again, caution that was based on streets guidance. But we're pretty close on the business model, again, great tax yields on amortization of intangibles. We paid no taxes in 2007 as well.

Lee Westerfield - BMO Capital

Great, thanks.

David Field

As far as the national is concerned, I mean, I think it's what it is. We've a good working partnership with actually Interrep as well as to a smaller extent with tax. And we did a nice job of executing both across the board and being able to drive reasonably strong relative results both locally and nationally.

Lee Westerfield - BMO Capital

So, there wasn't regional in some way.

David Field

I'm sorry.

Lee Westerfield - BMO Capital

I'm sorry that wasn't regional for example, national doing stronger in the Northwest or in the Northeast or some other regional factors?

David Field

I don't think so. I mean, yeah, I mean there are always small pockets of relative strength and weakness. But I think just overall you heard the story that our markets were down four, and we are up fractionally, obviously we had a strong quarter.

Lee Westerfield - BMO Capital

Okay, fair enough gentlemen. Thank you.

David Field

Thanks, Lee.

Operator

The next question comes from John Blackledge with JPMC. You may ask your question.

John Blackledge - JP Morgan

Thanks. Couple of questions. What's the focus in fiscal '08 in terms of use of free cash flow? I think we're estimating about 65%, 70% of free cash flow going to the dividend -- wondering if you're comfortable with that? And then I just wonder about national pacing in the first quarter if it's kind of inline pacing downwards local or if it's weaker? And then also if you can just touch on pricing environment -- is it kind of what it was in the fourth quarter, and then what it is and what's the pacing in the first quarter? Thanks.

David Field

Let's see those reverse orders as far as pricing is concerned, it's tough out there right now, and again it's a choppy market place plus the normal issues of first quarter, particularly the beginning of first quarter, and so it's not the best environment. But then again it's we're executing, I think, regionally well under the circumstances. As far as national versus local, which I think was your second question. Local is considerably stronger than national for first quarter. And as far as free cash flow is concerned, I think that a couple of things – one, I noted that our free cash flow should be a little bit higher in 2008 and in first quarter as well I noted that.

We're going to be using excess free cash flow to de-lever as much as possible. And in the mean time, we'll continue to look to return cash to our shareholders, as we've done over the last few years. Steve mentioned the Board I guess a week ago, declared first-quarter dividend, then we do think that as a percentage of free cash-flow that dividend will actually consume a smaller percentage again a free cash flow this year than last year.

John Blackledge - JP Morgan

Okay, thanks. I just have some one follow- up would you be opportunistic in terms of station acquisitions, or as like you said, are you going to use the excess free cash flow for that pay down? Thank you.

Steve Fisher

I think at this point and time we would not be particularly interested in looking at any acquisitions that would drive our leverage higher for the foreseeable future.

John Blackledge - JP Morgan

Thank you.

Operator

Your next question comes from David Miller with SMH Capital. Sir, you may ask you question.

David Miller - SMH Capital

Hi, good afternoon. Steve, just wondering if you can drilldown on middle of the outstanding expense management in the fourth quarter was this mostly because you jettisoned the Cincinnati market, and that if I recall, that was sort of a non synergistic market for you in terms of cost. And so did that help contribute to the expense management number in the quarter, or was there something else going on across the whole platform broadly, technologically that just contributed to, what's a very good expense number in the fourth quarter? Thanks.

Steve Fisher

First, let me thank you David, for that. I'll take that as a compliment. Let me put things in context. Expenses in 2005 were up 2%, 2006 1% and then basically flat in '07. So there is nothing new.

David Miller - SMH Capital

Okay (inaudible)?

Steve Fisher

I should have thank you David. Yes, the Red Sox. So there is nothing new. Cincinnati had nothing to do with it. That's not in our numbers at all. That was traded out last February.

David Field

You remember it's the same station, David.

Steve Fisher

Right. So, the bottom is, as we've said, I think for several years, our job and the management team and the great people we've out in the field, but we're driving revenues and that's what this company is about, the brands and the revenue and the people. But we do that while trying to smartly deploy the expenses, where we can get a return on investment.

I'd like to note as long as you brought this up as David talked about the growth in digital we've been investing in that both in people and infrastructure. We've been able to do that, well the expense management that you're seeing. So, I wish I could give you one silver bullet there isn't one.

David Miller - SMH Capital

Okay, thank you.

Operator

The next question comes from Mark Wienkes with Goldman Sachs. You may ask your question.

Mark Wienkes - Goldman Sachs

Thank you. Just wondering, Steve, real quick if you could breakdown the interest rate on the new bank deal for the different tiers of bank debt.

Steve Fisher

Yeah, it's published that we would have filed that this last summer on the -- off the top of my head. I think where we're currently at leverage we are at L plus 112, so it's obviously very attractive rate.

Mark Wienkes - Goldman Sachs

On the entire 800.

Steve Fisher

Yeah. We would be on the entire 800, and you will see pretty soon that we've taken some steps to put some caps callers and to swap some of that to fix some of that.

Mark Wienkes - Goldman Sachs

Okay. And then secondly there is a group of broadcasters I think you're a part of.

Steve Fisher

That would be on the bank debt, anyway have our yield note out there.

Mark Wienkes - Goldman Sachs

Yeah the 150 at 75 days.

Steve Fisher

Correct.

Mark Wienkes - Goldman Sachs

Yeah. And there is a group of broadcasters, I think Entercom was part of it, that filed early with the SEC with respect to spectrum allocation and the limitations that apply to trust of broadcasters first the potential consolidation of 25 MHz for XM and Sirius if they were to combine. I guess with the chatter increasing that the DOJ is going to approve the merger. I'm just wondering if you hear anything on that front with respect to the spectrum and how you think that plays out?

David Field

The only thing I'd say about the merger, obviously, is that we all hear chatter, and obviously we all wait to see what the decision is. But I'd make one point it would be extraordinary if the Justice Department could come out as they did in the Clear Channel ruling and determine that it would be that is problematic for one operator to have some degree of control over the Spanish radio broadcasting to market in an individual city.

And to then come out and to fund the marketplace such that they could approve a monopoly in the national subscription radio marketplace that would a stunning outcome. And frankly in light of that decision we're obviously very interested to see what the Justice Department will conclude.

Mark Wienkes - Goldman Sachs

Interested and engaged.

David Field

I'm sorry?

Mark Wienkes - Goldman Sachs

Interested and engaged.

David Field

I was just interested.

Mark Wienkes - Goldman Sachs

Okay, thank you.

David Field

Thanks, Mark.

Operator

(Operator Instructions) The next question comes from Bishop Cheen with Wachovia. You may ask your question.

Bishop Cheen - Wachovia

Hi, David. Hi, Steve. Thanks for taking the call. David, a question for you, and then one for Steve. David, you talked before about changing the sales culture, and if can give us a little more color on that and maybe quantify if you can what it's doing for you? And Steve on the Rochester divestiture those three stations those are not under contract you just -- they are in the marketing process, is that correct?

Steve Fisher

That's correct.

Bishop Cheen - Wachovia

Okay.

Steve Fisher

And we'd expect to move those fairly soon.

Bishop Cheen - Wachovia

You do fairly okay. It's just my perception is that the M&A environment is just so tough, granted these are not super large acquisitions, but still I was surprised to hear that fairly soon. May the wind be at your back? David the way you've changed the sales culture, and the positive impact it's having on Entercom can you give us more on that?

David Field

Sure. I think we did actually give more color than usual on that in the Scion example. But we're very much evolving our company into a marketing solution organization that is able to harness the extraordinary and unprecedented within the industry at least unprecedented power of the integrated marketing platform that we've at our disposal. And our core currency is ideas and we're bringing in as many smart marketers that have good ideation powers and setting them to work and it's making an impact.

I wish it was making a faster impact, but it's making real impact -- fuel money, and candidly you could be a fly on the wall listening to the conversations we're having with advertisers. I think you would conclude that there is a very hopeful future for radio, as we begin to harness that opportunity in a broader way going forward, and that's not unique to Entercom, of course -- that's really an industry wide opportunity.

Bishop Cheen - Wachovia

Do you sense the industry itself is changing its culture, or do you think you're out there in The End Zone all alone?

David Field

I think it absolutely is changing. Obviously each company is doing what they think is best. But I think both on a collective basis as we look at what the national reps are doing, and there was an interesting announcement out of Atlanta the RAB in terms of what the rep firms are going to be having an unprecedented degree of collective efforts to make radio more -- to drive radio development efforts at major corporations across United States, So, I think it's happening on a collective basis and I think it's happening to vary degrees within individual companies.

Bishop Cheen - Wachovia

Thanks. Thank you, David.

David Field

Next question?

Operator

The next question comes from Barry Schwartz with Chatham Asset Management. You may ask your question.

Barry Schwartz - Chatham Asset Management

Thank you. I just want to try and clarify some terms of the balance sheet here. The total debt balance, if I remember correctly, is that $974 million, is that correct?

Steve Fisher

That's upon the statement. I don't have it in front of me okay.

Barry Schwartz - Chatham Asset Management

Right. I mean it's the total bank debt about $823 right between the revolver?

Steve Fisher

And then that -- and then, as I said, we did have an asset sale for $20 million that we closed on in early January.

Barry Schwartz - Chatham Asset Management

Okay. Which would put you somewhere around $950 million of total debt? If I remember reading the bank agreement correctly there is a maintenance test in there at six times leverage?

Steve Fisher

That's correct.

Barry Schwartz - Chatham Asset Management

And what pro-forma of the assets sale and pro-forma plus everything else based on LTM EBITDA, where do you guys stand on the leverage maintenance?

Steve Fisher

Well that was in my prepared remarks, 5.6 times would be our bank leverage at the 12.31 including the asset sale in early January. Now, we'll have some other cash things like the realization of the sale of the three stations in Rochester. We've some other cash items coming in. 5.6 would be our bank leverage.

Operator

The last question comes from Jim Goss with Barrington Research. Sir, you may ask your question.

Jim Goss - Barrington Research

Thank you. I was curious about your take on report Arbitron -- just came out with updating their persons using radio report, which seem to highlight in particular the softer trends among the younger demographics, in particularly younger male demographics. I'm wondering if you see it that way how it is playing out in your markets, and if you're taking any action to try to build loyalty so that you build the business at the younger levels for the future.

Steve Fisher

Look, there is no question that we definitely need to continue to do things to engage listeners, younger listeners more. But I think there is a completely myopic perspective, and Jim, I'm not saying you are being quite myopic, but the people using radio statistic. The fact is that we live in a society in which there is an extraordinary degree of new technologies that are impacting all media across the board. And when you compare a radio the resilience of radio versus other media we're in extraordinarily good shape. Then people using radio remained about 95% of Americans tuning in every single week. There are some people listening to free local radio today than ever in history of this country, and we still have them for as more time than any other medium with the exception of television that is an extraordinarily powerful marketing platform.

It is inevitable that with the proliferation of new -- of all sorts of other media, and I don't mean just audio media, gaming and so forth that the compression of time is such that we're going to see radio's time very gradually a road going forward as we've seen in all sorts of other media as well. So, I don't look at it as a problem per se. Having said that, absolutely we need to continue to reinvent ourselves to make ourselves as appealing, as we can possibly be to the younger generation of Americans.

Jim Goss - Barrington Research

And I agree that your industry is capturing some of those demographics as well as any. But I wonder if you think you'll get some of them back later on, and it's a stage-of-life issue, or you think if you loose them now you won't have that opportunity?

Steve Fisher

Well, Jim, I think we still have them. We just don't have as much of their time as we did in the prior generation because there are so many other alternatives for them. And I think that -- that is reality as to what happens when this generation evolves 20 or 30 years from now -- I don't know.

Jim Goss - Barrington Research

One other thing -- and I hope this has been asked before. I came on a little bit late. But with political spending, I know, if radio's tended to get a little bit more as time as gone on especially in some of the large driven markets such as the once you deal in. And I have noticed on the television side, the game has gotten very sophisticated lately where if an outcome is an question in a particular state or a market a lot of money will go after it and if it's -- is not seemed to be in question the money vanishes. Are you seeing those sorts of issues play out in your political areas as well?

Steve Fisher

No. The answer is I'm not aware of that playing on the radio right now. I will tell you that we're as an industry doing more than ever to market ourselves to the political consultants. And we also see as this year continues to what extent radio participates in this election cycle.

Jim Goss - Barrington Research

All right. Thanks very much.

David Field

Okay. Well, thank you all. Appreciate your time this afternoon and we look forward to reporting back again in next quarter. Bye now.

Operator

This concludes today's conference. Thank you for your participation. You may disconnect at this time.

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Source: Entercom Communications Corp. Q4 2007 Earnings Call Transcript
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