Bad signs for Pulse in the Mega Media Quarterly Report

[nd2023]

Revenues of Pulse 87 are down, compared to the brokered Russian format. This really doesn't look good. For comparison, my house costs more than Mega Media's 3-month revenues! And they are blaming the format change for the loss in revenue, and they do not know if they will remain in business much longer once they burn through their capital. I really hope Pulse makes it as long as they can. If you like the Pulse, make airchecks now.
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Revenue

We derive revenue from sales of advertisements and program sponsorships to local advertisers, independent promotion agreements, ticket and other revenue related to special events we sponsor throughout the year and management fees from our subsidiaries. Advertising revenue is affected primarily by the advertising rates our radio stations and magazine are able to charge as well as the overall demand for radio advertising time in a market. For the three months ended October 31, 2008 our revenue decreased by $904,831 to $412,096 as compared to $1,316,927 for the three months ended October 31, 2007. The decrease results primarily from programming format change.

Net Loss

We have a net loss of $1,218,712 for three months ended October 31, 2008 as compared to a net loss of $100,597 for the three months ended October 31, 2007. The increase in net loss is primarily attributable to the decrease in our revenues and increase in interest expense.

Going Concern

As reflected in the Company's Financial Statements which accompany this report, our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liabilities and commitments in the normal course of business. In the near term, we expect operating costs to continue to exceed funds generated from operations. As a result, we expect to continue to incur operating losses and we may not have sufficient funds to grow our business in the future. We can give no assurance that we will achieve profitability or be capable of sustaining profitable operations. As a result, operations in the near future are expected to continue to use working capital.

 

[TonySantiago]

There's a big difference when you are talking about a format that is specifically laid out to a smaller segment (Russian) in comparison to a larger audience with dance music. Add to that, ANY format change at first will start slow. The fact that they are at 87.7 and not a strong signal doesn't help; I do realize that.

However, ads have been picking up GREATLY over the past couple of weeks. Whether that will be enough for some sort of turnaround remains to be seen but compared to the fear we've had during October, when Star (Troi Torain) left as well as Jewelz for a brief time, the ads are a positive. And still a good buy in comparison to anything above 92.

 

[neo11]

I would give Pulse a little more time as well...as has been mentioned often lately, the ad load has significantly increased on 87.7 very recently, and if that trend continues, the station's revenues surely will increase along with it. Also, not having what was likely a high-priced morning show in Star & Buc Wild anymore will save the station money going forward.

 

[w9wi]

I would give Pulse a little more time as well...as has been mentioned often lately, the ad load has significantly increased on 87.7 very recently, and if that trend continues, the station's revenues surely will increase along with it. Also, not having what was likely a high-priced morning show in Star & Buc Wild anymore will save the station money going forward.

What would scare me if I were an investor... is that Pulse may not have that time.

My gut feeling is the deadline for LPTVs to convert to digital will be about three years from now. When that deadline hits, Pulse will be forced off the air.*

Now, I suppose if the economy recovers reasonably quickly, they may be able to become profitable enough to pay back investment and a modest profit before their business model disappears. I think that's a fairly big "if".

* not literally, but they will be forced to a transmission format that is not compatible with FM radios. As far as 99.9+% of their audience is concerned, they'll be off the air.

 

[MarcR]

I would give Pulse a little more time as well...as has been mentioned often lately, the ad load has significantly increased on 87.7 very recently, and if that trend continues, the station's revenues surely will increase along with it. Also, not having what was likely a high-priced morning show in Star & Buc Wild anymore will save the station money going forward.

So General Motors and Chrysler will sit on the precipice of bankruptcy while Pulse and Mega Media will, with the help of some more ads, soldier on in this economic crisis just fine??! : Maybe Mega should apply for a government loan too! Mega should do the smart thing in this Darwinian enviornment and flip back to Russian-language programming, if that's what brought in the greater revenue.

 

[neo11]

Wow, a sarcastic post belittling Pulse by MarcR. Who would have thought? :

Apples and oranges. No one is trying to spin Mega Media's report as a positive.

However, it has been CONFIRMED by multiple reliable posters on this board that Pulse's spot load has greatly increased in recent weeks (which, of course, are not part of Q4).

It is also a fact that they no longer have a high-priced morning show that surely was eating into revenue.

Thus, everyone is taking a prudent, wait-and-see approach as to Pulse's fortunes. For what it's worth, even though the Russian format was making more money, the station still wasn't profitable. And that was with the format on the air for two or three years. Obviously it had reached its ceiling. Pulse is likely still growing, and I think Mega Media is looking at more than three months worth of financial data in its decision-making processes.

 

[disney fanatic]

Will this be the end of "Pulse 87"? Tune in next time same bat time, same bat channel!

 

[oaktree]

I sure hope that you eclectic danz stashun hopefuls have ever read a proxy statement or a profit and loss statement.

You've completely missed the point, I'm afraid.

Mega Media is clearly saying, "Look, we can't keep spending in EXPENSES more than Pulse brings in revenue wise ... and here are the numbers to prove it."

A two-week increase in less-than-market rate direct ads is not going to make a hill of beans with a 50 percent loss of revenue and an expense (out the door and not recoverable) that is already 10 times what the numbers were a year ago.

Gentlemen, there IS NO MORE MONEY for the company to take a "wait and see" attitude. It is bleeding, no, hemoraging red. If the entire staff worked for free (which may cause some legal difficulty, as the station is not a non-commercial volunteer endeavor,) you would still rack up expenses that are probably month-to-month insurmountable ... like RENT.

You will know on Friday. The day AFTER Christmas is always a good, reliable gauge. Are any spots running? I'm betting only people who bought spots to run through the end of the week. OK ... clubs want the business for next week, too, for New Year's Eve. So, maybe, it will hang for another week.

A week from Monday ... Pulse will be soaked in red ink and on it's deathbed with these numbers.

Sad.

Maybe it will be Russian danz next ... like the Bolshoi Ballet.

The company is dead in the water with these losses. Either that or, maybe, Tony has the funding to "keep it alive". How about it, Tony?


As a long time broadcaster who reads profit and loss statements and is a stockholder, as well, in this crappy economy, I can tell you ... three months is more than enough to spot a "trend" ... and coupled with what the first three quarters were like, this stashun is dead in the water.

And I bet they aren't getting $400 a spot. That's what they need to survive 7a to 7p in New York, minimum. It's not the lsos of the talent's salary ... somebody has to make up that lost revenue and fast! Who has an extra million just to "lose" on an effort like this? WOW!

Not trying to be sarcastic ... business is REALITY, gentlemen. And the offer goes ... Tony, as spokesman, I'd open your wallet. Mega's bankers don't give squat about music, rotations, talent, power, nothing ... they want to see $$$$$. It's called "Return on Investment" for $tockholders and they are a demanding lot .... even if you don't have banks lending to you.

It's about ADs, guys. It's about BUSINESS. Nothing else. It's no there ... and won't be in the first quarter Jan-March .... guaranteed. Not in this economy. And LOTS of business is needed at that.

 

[lalumia]

I'm STILL trying to pick them up on my micro wave oven....have they been playing any Jimi LaLumia classics? ..these days, "Loud Enough" might be a good choice..
"If I play the music,LOUD ENOUGH,you won't hear the sound of the world FALLING APART!!!"
http://www.amathusmusic.com/artist.php?id=76

 

[TonySantiago]

The company is dead in the water with these losses. Either that or, maybe, Tony has the funding to "keep it alive". How about it, Tony?

First things first, Pulse is a "dance station". If it was dans' stashun, then Dan should be the one tuning in more often and continue to keep away in the process! Wish I had the bucks because if I did, the station would be OUT of that 87.7 location and placed somewhere with a strong reach. ANOTHER thing.....and it was placed somewhere, Mega Media was having problems as far back as 2004! Pulse wasn't even a thought back then. People still thought of 'KTU as a dance station, though to me they didn't do enough.

As a long time broadcaster who reads profit and loss statements and is a stockholder, as well, in this crappy economy, I can tell you ... three months is more than enough to spot a "trend" ... and coupled with what the first three quarters were like, this stashun is dead in the water.

Put them above 92. All of the "haters" out there would shut up and say nothing as the station would be in the TOP 5.

Not trying to be sarcastic ... business is REALITY, gentlemen. And the offer goes ... Tony, as spokesman, I'd open your wallet.

Oaktree, if you feel I could do something, then bring over the bucks to me! I don't have it. I don't own Pulse or any radio station for that matter. Perhaps this may be a challenge and if radio as a whole was still a strong industry, I'd probably would have taken it. And if I DID want to take that chance to prove something, I would NOT do it in New York; reason being that the dance music mentality is very "imbedded" here. I would like to tap into a market where the radio history regarding dance is either minimal, or nothing at all...bring about a sound that not only would take the marketplace, but make radio pros such as yourselves drop your jaw in shock that it took an outsider who gave a damn, do something different and out of the box and yes...MAKE MONEY. But there's no way I'm jumping onto the Titanic here.....and that's just radio in general.

Business, yes radio is a business. A business that is FALLING apart with the "old school" thinking. Love or hate Pulse, you cannot deny that they are doing something different. And if they do indeed fold in the near future, you can learn from the good AND bad of things, yet realize when the day is out that yeah.....something different CAN happen on the radio if only corporate got their heads stuck out of their rear and started to listen up.

Sorry for the harshness.....but if anyone is going to "put me to the wall", sarcastically or in all seriousness. I'm gonna come out fighting.

 

[XCountry285]

There signal's not that bad it reaches well into Sussex, West Milford, Rockaway Area.

 

[DanceDiva3]

When it was Russian it was NOT 24 hours with jocks, board ops... It was more community based and very few employees were EVEN on the books !!!!! Come on PEOPLE !!! How about now there is more overhead as PULSE 87 ! Paying for ratings I heard is very expensive and how about SALARIES ???? Competing with the big dogs = putting more money into it. They never had a Promotions Department and a van driving around from Long Island down to the Jersey Shore. I'm sure Star, Jewelz and Programming is a pretty penny as compared to volunteers. Think about the overhead.

 

[DanceDiva3]

Now that is what I call, TONY THE TIGER !!!!!!!! I really do think Top 5 if they had the signal strength too. Everyone I talk to just loves the station. Every station is suffering revenue wise. I just think the Mom and Pops are getting hit harder. Just like any other business. I went to the big malls to go shopping for presents like many of us 20+ women. We are hit with convenience, promotions, branding. The big stations just like the big stores can afford it. The mom and pops are feeling it, not to say that the product is any lesser in quality. ;D

 

[TonySantiago]

When it was Russian it was NOT 24 hours with jocks, board ops... It was more community based and very few employees were EVEN on the books !!!!! Come on PEOPLE !!! How about now there is more overhead as PULSE 87 ! Paying for ratings I heard is very expensive and how about SALARIES ???? Competing with the big dogs = putting more money into it. They never had a Promotions Department and a van driving around from Long Island down to the Jersey Shore. I'm sure Star, Jewelz and Programming is a pretty penny as compared to volunteers. Think about the overhead.

THANK YOU DANCE DIVA! SPOT ON!!!

I didn't know how they were when the station was Russian, but yes...they spent LESS money because there were fewer employees as well as being more community based as opposed to hitting up a broad audience. Outside of perhaps Brighton Beach, no one really knew about it. They probably didn't have a stream of the Russian station either! But based on targeting a certain segment that could tune in, no one really complained about the signal.

Pulse "blew up" that 87.75 mHz position. Mega probably anticipated that going dance was going to be big, but perhaps not as huge as they could possibly realize, in consideration of the financial issues they were having. Not trying to be Mr. Alec Shvarts here, but he basically felt that he had to take a huge shot to get things in order and Pulse was it, but the overhead was greater than anticipated upon reaching out to a larger audience. Maybe they are NOT getting $400 a spot, but it's certainly better than getting $0 with the lack of advertising before.

New York area dance music fans were STARVING for this stuff and 'KTU really wasn't "doing it". Maybe a little bit from Vic Latino's show on, but not enough. For those fortunate to live in Party 105 territory, it was something....but the signal couldn't carry far outside of Suffolk until the 101.5 simulcast.

If Pulse (I say "if" because this is the "little station that could" and everyone was predicting their death here many times and yet they are still here) should disappear in the near future, then radio corporations considering changing formats for poor performers would be STUPID NOT to consider current dance in the equation. Emmis had dance music before (out of Hot 103/97) so they know first hand how well the format works. It was just the oversaturation of a specific genre (freestyle) as well as bad financial moves outside of radio (i.e. ownership of baseball's Seattle Mariners) that killed things. For CBS, what to do with 92.3? Hmmmmmm . Clear Channel won't change a thing so I won't even harp on 'KTU, especially in light of a recent format change in Miami which is basically the same thing.

Either or, the coalition will be here! My death is when I'm done fighting. Yeah, I believe in dance music that much.

Thank you!

 

[oaktree]

Tony ... get an iPod and fill it to the brim. Thank goodness you're not a businessperson. You'd be looking for a government handout, too. I'm sorry, but you haven't a clue how it works.

Banks don't care what people want. They care what people spend to make a business loan pay off as soon as possible. With interest. Nothing else. That's why banks are NOT lending to radio stations ... especially "mom and pops" and Mega Media, in particular. It's not "sound" business.

Tony, you mention a lot of "ifs & buts". Well, "If ifs & buts were fruits and nuts, we'd all have a Merry Christmas."

You have not addressed one fact of reality here. Maybe this will help... First, terminate everyone except a sales staff and GM and a production/PD. Automate with the cheapest computer that will do the job. A laptop will do, or, a WalMart desktop. Buy some imaging. Sell volume ads, but don't be excessive. Cut the rent. Run the station from home.

If the station can't make it now by losing $1.2 million a quarter ... then billing $100,000 with the expenses they have won't make it any easier. Ever lose a million dollars in three months, Tony? I didn't think so.

If automating the station can bring in clear $50,000 a month, you now have a profitable station. If you can't do that ... in New York City ... it's time to get out of it.

If "everybody" wanted the Pulse ... the exhorbitant PPM ratings costs (which also needs to be dumped as soon as possible ... though it is contracted and will be tough to do,) then the station wouldn't be rated where it is ... and agencies would clamor to buy it. They aren't. Sad story, but fact. And the station doesn't serve a business area big enough to do that kind of local direct business.

And sales people work on commission ... not on salary.
Sorry, Tony.

 

[neo11]

Tony ... get an iPod and fill it to the brim. Thank goodness you're not a businessperson. You'd be looking for a government handout, too. I'm sorry, but you haven't a clue how it works.

I'm not Tony, but you know something? Business needs fewer people like you. Mega Media notwithstanding, what has driven the radio industry as a WHOLE into the ground is exactly the type of thinking you are describing.

Banks don't care what people want. They care what people spend to make a business loan pay off as soon as possible. With interest. Nothing else. That's why banks are NOT lending to radio stations ... especially "mom and pops" and Mega Media, in particular. It's not "sound" business.

Thanks to the corporate "geniuses" that have killed radio. Radio killed the radio star. Also, for what it's worth, Mega Media is not just a radio business.

Tony, you mention a lot of "ifs & buts". Well, "If ifs & buts were fruits and nuts, we'd all have a Merry Christmas."

Tired, self-righteous cliches. Yawn.

If the station can't make it now by losing $1.2 million a quarter ... then billing $100,000 with the expenses they have won't make it any easier. Ever lose a million dollars in three months, Tony? I didn't think so.

And yet you're ignoring the cost-cutting that has already happened at Pulse. That and the fact that the station's audience and ad load is still growing. I don't expect it to ever be a runaway financial success, but I think it's still early for the doom and gloom scenarios. How about GM, which was losing $180,000 a MINUTE during the second quarter?

If "everybody" wanted the Pulse ... the exhorbitant PPM ratings costs (which also needs to be dumped as soon as possible ... though it is contracted and will be tough to do,) then the station wouldn't be rated where it is ... and agencies would clamor to buy it. They aren't. Sad story, but fact. And the station doesn't serve a business area big enough to do that kind of local direct business.

Dumping the PPM would hasten the station's demise. They'd have no numbers to sell. And for what it's worth, Pulse's numbers are quite good, considering the *many" limitations the station has, from the signal, to the dial position, to the complete lack of advertising.

 

[TonySantiago]

Neo,

Oaktree comes from the Philly boards. They still can't get that "dans stayshun" mentality out of their minds down there (really, they should learn to spell it right!) ;D. This is what I had dealt with when I brought up this topic earlier this year just after Pulse launched. And actually, Oaktree was NICE compared to others in there. The reality is, there are a LOT of "haters" out there that I deal within in the industry in one form or another...some perhaps closer than I think. It's just "part of the territory" that I deal with concering this fight. And in his case, it is easier for him to blame me since I've stuck my neck out versus just getting to the direct problem at hand. He can say whatever he wants because as much as he wants to put me down, he can't.

Remember this Neo, from someone who told me this....for the one person that likes me, I will have nine haters. So, there you go. Besides, if a station similar to this above 92 launches, with a budget and makes the top 5, you won't hear him or others say a thing.

But we continue to bring up the point about finances....an issue that has been with Mega Media since 2004. THAT will be Mega Media's "demise". Doesn't matter WHAT format they came up with after Russian. It could be Polka and Oaktree would stink on Polka as the problem. To that he wants to blame it on "dance" just because it's there. And dance is NOT the problem....finances are. Lately there have been ads on the station but it may be "little too late". And that is on a sales staff that is working on commission.

But I am NOT at Pulse, and perhaps it would be wise if someone there would come out to this argument and bring something to the table that perhaps I'm missing. That's beginning to tire me. That I defend this station and not even WORK there and yet no one at the station wants to add in their thoughts. And, for the record, I'm not expecting the on-air personalitites to do that.

Happy holidays all! I'm still smiling! ;D

 

[SyntaxError]

Oaktree, I can read a medical book cover to cover, and upon finishing it, I would probably end up understanding 30% of what is in that book, only because I am not a doctor. You claim to have read the profit loss statement from Mega Media, and their 10Q, but I think you have the same problem understanding that report as I would have a medical book.

1. The report that was just put out by the company is from the 3Q. MMDA does not use a calendar year for their fiscal year end, so that report is only reflecting their status until end of October. So you are quoting and regurgitating information that is 2 months old, as if it was yesterdays news. If you want to talk about current news, why not mention the recent 8-K filed by MMDA regarding a Convertible Note from a Mr. Robert Catell. If you do your research, or a simple Google search on that name, you will know what impact that may have/has on MMDA's survival and ultimate success.

2. For NYC, PPM became currency in October. Therefore, that quarterly report does not reflect any real activity since the PPM numbers were released. Second, almost all the major add agencies already had budgets allocated throughout the end of the year, therefore, not much room for MMDA to pick up these dollars from the ratings they received. However, I believe that 2009 is a whole new ballgame.

3. The "Going Concern" statement from their 10Q is redundant and has been included in their quarterly's since the format change to Pulse 87. This was also mentioned in their 10K from last year. Therefore, thanks again for sharing news that is, this time, almost over a year old.

Oak, you claim to be an expert, and on this board, you may be the one eyed man in the valley of the blind. However, to someone who actually reads financial statements for a living, you do not appear to be an investor or financial analyst in any way.

PS. Tony, keep on doing what you're doing, as it's the haters job is to hate. I very much enjoy reading your posts.

 

[oaktree]

Syntax,

You don't understand. I have no interest in "researching" what is so apparent a failure that you so want to plead a success in any way you can.

It's not my job, nor my interest, to divulge financial information on a company that, obviously, is have monumental problems from quarter to quart, and a huge loss from what they had last year in the same quarter. If you think that the next quarter, be it calendar or fiscal year will be any better, no matter how you slice and dice it ... at least, as I mentioned, from an advertising and financial situation ... especially in this economy, I want a drag on what you're smoking.

As for currency of the PPM numbers, of which Pulse is paying a separate price as you know, it's funny that their advertising leverage has continued to slide from quarter to quarter ... PPM or not. With that signal and this economy, being where they are all around, including on being broke, is no sign that advertisers ... and major ones at that ... are doing anything but taking a wait and see.

The question is ... how long can Mega hold out? If Russian made it more money at less expense ... it doesn't take an Einstein, even you, to understand that the situation is not good for Pulse 87.

And incidentally, I don't need to be an apologist for someone who, like you, doesn't understand the reality of a situation, nor has too much time on his hands "investigating" the non-relevant. You don't need to be a doctor to read this medical book. The patient is dying, it's lifeblood is being sucked out of it because it is weak and without immediate infusion of revenue, the baby is DOA.

I didn't say anything about Tony's enthusiasm or passion for that which he loves. The fact is, there are other forces at work here, and you, as an apologist, have merely choose sides, without facing the reality of "fact."

So, this question ... would you invest a million bucks in Mega Media to make up for the million plus it lost in the ... pick a quarter?

If so, before you do, I know of a bridge that you need to buy, first.

And Neo, I'm well aware of what "killed" radio. Cost cutting to the bone, not looking at the fact that young people as a mass don't listen to rado anymore because programming is so bad, talent is not the rule and the "business model" to make station's survive so they can pay people just doesn't work much or well anymore.

Of course, you probably have trouble understanding that radio is not for your convenience ... it's a business ... and like so many others (and Pulse is not a General Motors, or even close,) you have a lot to learn about the "business" of radio. Without it, you can't survive. It's a business. It's about $$$$. And you can take PPM numbers to your banker and he'll toss you out because it's not "ratings" that pay the bills. It's people spending money on your radio station ... and in New York ... lots of it. Or, you die. Period.

And Tony, I enjoy your posts, too. I also appreciate your kindness. I'm not a "hater" ... really. And I agree that there are some bad owners in "corporate" out there. And I'm sad over how some, but not all, have destroyed the industry.

 

[oaktree]

P.S. -

Neo --- instead of hurling invictives, why not show your brightness by coming up with something original like YOUR ideas on how you would make Pulse financially better off to afford to do this format.

That's the problem.

I, for one, would be real curious to see how you'd save it.

"Format" doesn't count. Banks don't lend on "format." The problem isn't "format." The problem is $$$$. So, how would you solve the problem.

And, incidentally, I'm well aware of the magazine and other interests of Mega. It's irrelevant. The radio station must "stand on it's own" ... a basic tenet of "business." But, you knew that. Didn't you?