iHeartMedia 2009 Annual Report Download - page 8

R
adio Networks
In addition to radio stations, our Radio Broadcasting segment includes Premiere Radio Networks, a national radio network
that produces, distributes or represents more than 90 syndicated radio programs and services for more than 5,000 radio station
affiliates. Our broad distribution platform enables us to attract and retain top programming talent. Some of our more popular radio
personalities include Rush Limbaugh, Sean Hannity, Steve Harvey, Ryan Seacrest and Glenn Beck. We believe recruiting and
retaining top talent is an important component of the success of our radio networks.
We also own various sports, news and agriculture networks serving Alabama, California, Colorado, Florida, Georgia,
Iowa, Kentucky, Missouri, Ohio, Oklahoma, Pennsylvania, Tennessee and Virginia.
I
nternational Radio Investments
We own a 50% equity interest in the Australian Radio Network, which has broadcasting operations on Australia and New
Zealand and which we account for under the equity method of accounting. We owned an equity interest in Grupo ACIR
Comunicaciones (“Grupo ACIR”), the owner of radio stations in Mexico, which we sold in 2009.
Americas Outdoor Advertising
Our Americas Outdoor Advertising segment includes our operations in the United States, Canada and Latin America, with
approximately 91% of our 2009 revenue in this segment derived from the United States. We own or operate approximately 195,000
displays in our Americas segment and have operations in 49 of the 50 largest markets in the United States, including all of the 20
largest markets. For the year ended December 31, 2009, Americas Outdoor Advertising represented 22% of our consolidated net
revenue.
Our outdoor assets consist of billboards, street furniture and transit displays, airport displays, mall displays, and wallscapes
and other spectaculars, which we own or operate under lease management agreements. Our outdoor advertising business is focused on
urban markets with dense populations.
Strategy
We believe outdoor advertising has attractive industry fundamentals, including a broad audience reach and a highly cost
effective media for advertisers as measured by cost per thousand persons reached compared to other traditional media. Our Americas
strategy focuses on our competitive strengths to position the Company through the following strategies:
Promote Overall Outdoor Media Spending. Outdoor advertising represented 3% of total dollars spent on advertising in the
United States in 2008. Our strategy is to drive growth in outdoor advertising’s share of total media spending and leverage such growth
with our national scale and local reach. We are focusing on developing and implementing better and improved outdoor audience
delivery measurement systems to provide advertisers with tools to determine how effectively their message is reaching the desired
audience. As a result of the implementation of strategies above, we believe advertisers will shift their budgets towards the outdoor
advertising medium.
Significant Cost Reductions and Capital Discipline. To address the softness in advertising demand resulting from the
global economic downturn, we have taken steps to reduce our fixed costs. In the fourth quarter of 2008, CCMH commenced a
restructuring plan to reduce our cost base through renegotiations of lease agreements, workforce reductions, elimination of
overlapping functions and other cost savings initiatives. In order to achieve these cost savings, we incurred a total of $17.4 million in
costs in 2008 and 2009. We estimate the benefit of the restructuring program was an approximate $50.5 million aggregate reduction
to fixed operating expenses in 2009 and that the benefit of these initiatives will be fully realized in 2010.
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(2) Included in the total are stations that were placed in a trust in order to bring the merger into compliance with the FCC’s
media ownership rules. We have divested certain stations in the past and will continue to divest these stations as required.