After the NASDAQ warned Radio One last month that they were in jeopardy of being delisted when their stock prices dropped below $1, the company's third quarter earnings report provided further evidence that the media company is suffering tremendously from the nation's current economic turmoil. Radio One posted $266.1 million in losses for the third quarter ending Sept. 30. This report included a write-down of assets worth $337.9 million, a loss attributed to a decline in radio ad revenue. "Those losses aren't real losses,†says Alfred Liggins, president and CEO at Radio One. "They are just write-downs of value on our assets.†The company's consolidated net revenues were down by 2% to $86 million despite the benefit of increased political advertising by $600,000 from the presidential election. Barry Mayo, president of the radio division at Radio One, mentioned in the third quarter earnings conference call last Thursday that they did not receive as much assistance from President-Elect Barack Obama as they had anticipated and that in that area they did not perform as well as general market stations. The new CFO, Peter D. Thompson, said that the auto, retail, healthcare, and telecom advertising categories declined year-to-year by 37%, 24%, 16%, and 17% respectively. "Local radio is especially impacted with the current economy because auto and retail are radio's two biggest ad categories and they are the two categories most affected by the recession,†says Andrew Hampp, Ad Age's cable, TV, out of home (taxis and billboards) and radio reporter. "In the middle of the greatest economic downturn since the great depression [increasing ad revenue] is a very difficult prospect,†Liggins says. "New ad mediums like online and cable network business are actually growing. While old-line, mainstream categories like newspaper, magazines, broadcast TV, and radio are not growing.†Nevertheless, the Lanham, Maryland-based radio broadcasting company operates 53 radio stations in 16 markets, and is loaded down with some $765 million of debt. Stanford Institutional Research predicts Radio One could violate its bank agreements if their debt load increases. Additionally, another research provider, Market Grader, scored Radio One's stock as particularly risky with a troubled and uncertain business model. Liggins says that the company's debt is under control. "We have been reducing our debt all year long, and we will continue to reduce our debt each and every quarter,†he says. "We make over $100 million per year. Our interest costs are substantially lower than that and we use our free cash flow to pay off our debt.†There was some good news. Markets that experienced year-to-year growth included Indianapolis (7%), Philadelphia (15%) and St. Louis (13%). In addition, financial and tourism advertising was up by 3% and 47%, respectively. Hampp says to increase investor confidence, management needs to create more efficiencies on an operational level, which could mean slashing market spending, lay-offs, or repositioning key assets. The company has already begun to reduce its operating income, which has decreased by 17% to $34.7 million since 2007 on a same station basis, and they sold off a Los Angeles radio station in April, which allowed them to expand their internet portfolio. Interactive One, a branch of the company that was launched a little over a year ago is growing positively. "They are learning that having a core radio business is not a sustainable strategy at this point. When you are a radio-based media company in a market like this, you need other revenue streams,†says Hampp, who is encouraged that Radio One's internet business is up 8% and that its growth is pacing up 20% for the fourth quarter. However, the company's discontinuation of the employee 401(k) program and reduced stock compensation expenses under their new employment agreement is another sign that Radio One is stretched thin.