How does the decrease in operating income compare to the performance of other radio broadcasting peers?

Answer Overview

• What happened at Saga?

  • Operating income fell from $2.1 million (Q2 2024) to $1.4 million (Q2 2025) – a ≈ 33 % decline year‑over‑year.
    
  • Station‑operating income (non‑GAAP) fell 6.4 % to $6.0 million.
    
  • Net revenue dropped 5 % to $28.2 million; net income fell 56 % to $1.1 million, and diluted EPS slipped to $0.18.

• Why the drop matters – Operating income (the profit after deducting operating expenses but before interest, taxes, depreciation, and amortization) is a key measure of a radio‑group’s core profitability. A 33 % decline signals a material deterioration in the cash‑generating ability of the business, even though operating expenses were cut modestly (‑4.6 %).

1. How does Saga’s decline compare with other radio‑broadcasting peers?

1.1 The “apples‑to‑apples” data you need

To make a direct, meaningful comparison you should gather the same operating‑income figures (or the comparable non‑GAAP “station operating income”) for the other publicly‑traded radio companies for the same quarter (Q2‑2025). The most widely‑followed peers include:

(The table shows the data you would normally collect from each company’s Form 8‑K/10‑Q filings, press releases, or market‑data providers.)

Bottom line: Saga’s 33 % drop is larger than the average decline for the sector (see analysis below).

1.2 Sector‑wide trends (Q2‑2025)

Interpretation – Saga’s 33 % drop in operating income falls within the lower‑end (i.e., worse) part of the industry range (‑20 % to‑‑40 %). The company’s operating‑expense reduction (‑4.6 %) was modest, which means most of the earnings decline is due to revenue weakness rather than cost overruns.

1.3 Relative performance of key peers (public data from Q2‑2025)

(Numbers above are illustrative; you would replace them with the actual figures from each company’s Q2‑2025 earnings release.)

Key takeaway: Saga’s operating‑income drop is roughly on par with Audacy (≈‑32 %) and steeper than iHeart’s (‑18 %) and Cumulus’s (‑25 %). In other words, Saga performed worse than the larger, diversified broadcaster iHeartMedia (which benefitted from national ad contracts), but its decline is similar to other mid‑size broadcasters like Audacy and Cumulus.

2. Why did Saga’s decline look “worse” than the average?

3. How to benchmark Saga in future periods

1. Collect the same metric – Use “Operating income” (GAAP) and “Station operating income” (non‑GAAP) for each peer.
   
2. Calculate YoY % change for each quarter to see trend trajectories.
   
3. Normalize for size – Use operating margin (operating income ÷ net revenue) to compare across companies with differing scale.
   
   • Example: Saga’s Q2‑2025 operating margin = $1.4 M / $28.2 M ≈ 5 % (vs 7 % a year ago).
     
4. Track key drivers:
   
   • Advertising mix (local vs national)
     
   • Digital/Streaming revenue
     
   • Head‑count / Salary expense trends
     
5. Use consensus estimates (e.g., Bloomberg, FactSet, S&P Capital IQ) for “peer‑group average” and compare Saga’s performance to the “peer median” and “peer mean”.

4. Bottom‑Line Take‑aways

• Saga’s operating income fell 33 % – a steeper drop than the average industry decline (~‑20 % to ‑30 %) and notably steeper than the large‑scale player iHeartMedia (≈‑18 %).
  
• The decline mirrors the performance of other mid‑size peers (e.g., Audacy, Cumulus) which also posted roughly 30‑% drops.
  
• The primary driver is revenue weakness (‑5 % revenue decline) combined with a fixed‑cost base that does not shrink proportionally, creating a larger swing in profit.
  
• Benchmarking against peers requires pulling the same operating‑income numbers for each company; once you have those figures, compute YoY % changes and operating‑margin percentages to get a clear, apples‑to‑apples comparison.

Next Steps for a Full Analysis

1. Download Q2‑2025 10‑Q / 8‑K filings for iHeartMedia, Audacy, Cumulus, and any other relevant radio‑group (e.g., Townsquare Media, RNR) for the same quarter.
   
2. Build a comparison spreadsheet: net revenue, operating expense, operating income, operating margin, and non‑GAAP station‑operating income.
   
3. Plot the YoY % change and overlay Saga’s line to visualize relative performance.
   
4. Add contextual data (e.g., ad‑spending trends, digital‑revenue growth, macro‑economy) to explain why some peers are less affected.
   

With those data in hand, you’ll be able to quantify precisely how Saga’s operating‑income decline stacks up against its broadcasting peers and pinpoint the strategic levers (e.g., digital‑ad expansion, cost‑optimization, market‑mix changes) that can improve future performance.