Radio Firms Beg Lenders for Mercy

The continuing slump in radio advertising has lenders breathing down the necks of some debt-burdened broadcasters. Weak revenue is triggering loan clauses about their debt-to-earnings ratios. Crossing those limits forces companies to renegotiate terms, often resulting in higher interest or other penalties. Radio advertising has gotten a boost thanks to the "cash for clunkers" trade-in program, but the radio industry is expected to lag any recovery, as radio is an old medium and there are audience-measurement issues. Cheap competition is also drawing advertisers elsewhere.