1. Some Good Signs, Some Not Great

• The Los Angeles Area Chamber of Commerce just announced three new reports about job creation in Los Angeles with a major international business chosing L.A. City and County to be its North American headquarters, the entertainment industry posted growth and L.A. County and the University of Southern California appear to be close to establishing a biotech park around the USC Health Sciences campus in Boyle Heights.
  
• The Southern California housing home sales and median prices continued to inch up at a slow but steady pace in March.   Home sales in Southern California rose above prior year levels in March for the 21st consecutive month.
  
• In Los Angeles County, permits were up over a year ago (+38.7%).  Permits for single-family homes rose by +79.9%, while multi-family permits increased by +24.4% (year-over-year).
  
• In the Inland Empire, housing permits were up by +14.4% in March.
  
• In the Riverside-San Bernardino area, unit sales, however experienced another sharp drop – falling by -26.8% compared with March 2009, but jumped by +27.4% for the month over Feb 2010.  The area’s median price gained by +10.5% over the year.
  
• The total number of containers handled in March at the ports of Los Angeles and Long Beach rose by +8.0 percent on a year-to-year basis for the fourth consecutive month of year-to-year increases, an encouraging trend.
  
• While local unemployment rates still top 12%, some encouraging signs are appearing in the employment numbers just released by the California Employment Development Department.  Seasonally-adjusted, total employment in California has increased month-to-month each month in 2010, but the job loss level has dropped by 50%.
  
• Construction Industry Research Board reports In Los Angeles County through three months, industrial permit values jumped by +486.5% over the comparable 2009 period, but remained well below the 2008 pace.
  
• UCLA Anderson’s forecast on March 24, 2010 predicts the outlook for the balance of the year for California's economy is for little to no growth. The economy will begin to pick up slightly in the beginning of 2011 and begin to grow at more normal levels by mid-2012. 
  
• UCLA predicts job growth in California will begin later this year and will be led by health, professional and business services, export, construction and technology related manufacturing sectors.
  
• An encouraging sign of growth is that auto spending has exceeded YTD Q1 spending by 9%.
  
• With 27 of 47 radio revenue categories posting positive gains Mar 2010 YOY (18 of them double, 8  triple digit), the indicators of recovery are there,.  And, Radio is almost always the first place to reflect an upturn in the economy.
  
  Conclusion:  A new consumer confidence report April 26 says consumers and businesses think that the worst is over and it’s okay to come out from under the rock.  Q1 YTD 2010 radio revenue is up 4% and we believe that that trend will continue through 2010.  We do agree the So Cal economy will remain quite fragile for the next 12 months, but that Radio revenue will see an increase of 5% or more YOY in 2010.

2. Retailers and Businesses Perspectives

• Drug Stores, Amusement Parks, Movies, Sporting Goods, Department Stores, Computers/Office Equipment, Consumer Products, Auto, Grocery, Heating, Home Improvement, Appliances, Lawn & Garden, Oil & Gas, and Professional Services all posted gains in radio revenue Q1 2010.
  
• TV programs/stations was the #5 revenue category for RADIO Q1 2010 and posted the most year-over-year (YOY) growth at 20%.
  
• Financial Services spending on radio Q1 2010 was up a whopping 16%, pushing new bank services, new credit cards, new mortgages and refinancing (as well as debt and mortgage restructuring) -- one of the best indicators that the economy is improving.
  
• Political has gone wild, up 326% Q1 2010 YOY, and we weren’t even into the “political window” of protected candidate rates.  The two main Republican gubernatorial candidates, Meg Whitman and Steve Poizner, are all over radio, along with two independent groups doing anti-Meg radio spots supporting Jerry Brown (the main Democratic for Governor).  Yes on Prop 15, 16 and other issues were on radio in Q1 and are still there.
  
• Only three of the top ten radio revenue categories posted losses Q1 2010 YOY, Communications and Insurance (both down 20%) and Restaurants (down less than 3%). 
  
• Overall we anticipate that non-traditional and digital will continue to be a major stream of revenue growth this and next year, but that local and national will continue to grow, too.
  
  Conclusion:  Avails are filling up faster than anticipated, and more advertisers are returning radio faster than projected.  There have been 474 new spot radio accounts just in Q1 2010. Advertisers are taking note and increasing their radio spending to protect their barriers to entry, of moving in to prevent being shut out by a competitor. We expect to see modest but continued improvement in both national and local throughout the year, especially if local employment numbers rise.
  
  3. Changes in the Market
  
  (see attached Stations Changes for more details since Jan 1)

April 5, 2010  - 710 ESPN (KSPN) and AM 830 KLAA, Wednesday announced a new partnership that allows listeners of KLAA the opportunity to hear some of ESPN Radio’s national weekday programming, while 710 ESPN has agreed to simulcast at least 60 Angels games this season. 

Angels broadcasts will continue to be produced by AM 830. National ESPN programming will originate from ESPN Radio studios in Bristol, CT. "The Sports Lodge with Rodger Lodge" weekday morning program will continue to be broadcast from the studios at AM 830 KLAA and KTLA Channel 5.  710 ESPN programming originates from the L.A. LIVE studios across from the Staples Center in downtown Los Angeles.  

Kim Amidon, former morning drive co-host at KOST for over two decades, will partner with Pat Prescott as the hosts of the morning drive show on KTWV, “The WAVE.” The new partnership begins on Monday, May 17. Multi-platinum R&B recording artist Brian McKnight will leave the day-to-day grind of hosting a morning radio show.


May 11, 2010

Market Update
Station Changes