- The Washington Times - Monday, August 21, 2006

Radio One Inc., the nation’s seventh largest radio broadcaster, celebrated its silver anniversary last week as its stock continued to tumble in the face of new competition for the industry.

The Lanham company’s stock has sputtered in the past year. Investors have lost confidence in Radio One’s ability to remain competitive as advertisers shift their radio dollars to the Internet, satellite radio gains influence and the company struggles in the Washington and Los Angeles markets.

Radio One’s stock fell 3 cents yesterday to close at $5.76 on the Nasdaq Global Market. It was trading at about $25 in mid-2000 and in the $14 range a year ago.

“Historically, when Radio One encountered a [bump], they were able to recover pretty swiftly and grow through it,” said Stuart Kagel, an equity research analyst at Janco Partners Inc. in Greenwood Village, Colo. “This time, investors are concerned about their ability to grow through it.”

Mr. Kagel does not own stock in Radio One, and Janco Partners has no investment banking relationship with the company.

Earlier this month, Radio One reported that net income for its second quarter ended June 30 fell 59 percent to $8.1 million.

Ratings were down in Washington, Los Angeles, Dallas, Cleveland and Cincinnati, outpacing growth in other markets. In Los Angeles, ratings fell by about half when Radio One replaced disc jockey Steve Harvey.

Chief Executive Officer Alfred C. Liggins III called the quarter “pretty disappointing.”

“We are clearly facing some challenges in certain markets, over and above the ongoing softness in the radio industry, and are taking active steps to address those challenges,” he said after the earnings announcement.

“We think that this quarter may represent the perfect storm of bad news and that better days are ahead,” he said.

Radio One announced yesterday that it would sell Boston Radio One station WILD-FM to Entercom Communications Corp. for $30 million in cash, helping it pay down debt.

Radio One was founded in 1980 but didn’t celebrate its 25th anniversary until last week.

The company did not provide earnings estimates for the third quarter, fueling doubt about an imminent rebound.

Chief Operating Officer Mary Catherine Sneed departed the company in June to “pursue other interests.”

“We are encouraged to hear that ROIAK is making significant changes to its programming and management structure, but we think a recovery will be slow in coming,” Wachovia Securities analyst Marci Ryvicker said after the earnings announcement.

Wachovia owns Radio One stock.

TV One LLC, a joint venture with Comcast Corp., has provided hope for boosting Radio One stock. Radio One is the largest investor in the Silver Spring-based cable network, which shows movies, music and lifestyle programming targeted at black adults. It is viewed in 31.5 million households across the country.

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