Television and Radio |

In flush times, television stations are accustomed to 30 to 40 percent profit margins. But the recession is goring even these cash cows with a 14 percent drop in advertising revenue in the first quarter of this year compared to last at Bay Area TV stations, analysts say.

Ad revenue took an even bigger tumble at Bay Area radio stations, with a 27 percent decline during the same period.

The main culprit is the imploding auto industry, which provides from 20 percent to one-third of the advertising revenue for broadcasters. With General Motors and Chrysler announcing plans last week to close 1,900 dealerships during the next year, it will take years for advertising levels to recover at TV and radio outlets. “And when it does return, it will be different,” said Robin Flynn, senior analyst at SNL Kagan, who recently conducted a nationwide study of advertising on radio and TV stations and projected the 14 percent TV decline.

“All advertising-driven media have been hit hard by the recession, not just newspapers,” Flynn said. “So companies are really trying to get creative to make up for that revenue.”

Spot TV ads drop

Broadcasters in top-10 markets like San Francisco are generally still profitable, Flynn said. Outlets in large markets are more dependent on national advertisers, so they’ve taken a bigger hit than broadcasters in smaller markets. In the first quarter of 2009, spot TV advertising by the top 200 Bay Area retailers dropped to an estimated $58 million from $62 million the year before, according to regional TV estimates by TNS Media Intelligence. And Bay Area radio stations – which collectively reach 5.5 million listeners a week – saw advertising revenue decline 27 percent in the first part of the year, according to a regional study by Miller Kaplan Arase Co.

“Never seen it this bad. Never,” said Mickey Luckoff, president and general manager of KGO-AM, who has been at the station more than three decades, much of that time with the news-talk broadcaster on top of the ratings chart. “It’s as close to a depression that I’ve seen in my lifetime.”

The downturn is even hitting new-media sites, with advertising down at some political blogs nearly 50 percent in this post-election year, and 10 to 20 percent at entertainment blogs, analysts said.

Howard Stern revealed to Sirius listeners on Thursday that he’s been approached by terrestrial radio about a possible return.

Stern is in the final year of a five-year, $500 million contract with the satellite radio giant.

In an interview with “Bubba The Love Sponge” – a fellow shock jock who moved to Sirius and has since returned to terrestrial airwaves — Stern said he’s been contacted by several “regular” radio executives, but has not received a “bona fide” offer yet.

“I actually have an offer,” Stern said. “Well, not a bona fide offer, but people have been making them.”

It doesn’t sound like he’s ruling a return to terrestrial radio out, although it might also be pure shock jock posturing in a contract year. Late last year, Sirius chief executive Mel Karmazin said he expected as much from Stern in 2010.

Stern did not reveal which terrestrial radio stations had approached him, but said, “I can’t ever imagine the day where I’d work for Clear Channel.”

The nation’s largest radio conglomerate once dropped Stern’s terrestrial radio broadcast in six markets because of “indecency.”