Saga's Digital Gambit: Can Radio's Old Guard Win a New Game?

GROSSE POINTE FARMS, MI – December 01, 2025 – When the leadership of Saga Communications takes the stage at the Noble Capital Markets Emerging Growth Equity Conference this week, they will face an audience looking for more than just a standard corporate presentation. For President and CEO Christopher S. Forgy and CFO Samuel D. Bush, the December 3rd event in Boca Raton is a critical opportunity to sell a turnaround story—one where a legacy radio broadcaster attempts to reinvent itself as a digital growth engine.

The backdrop is a narrative familiar to the media industry: the relentless erosion of traditional advertising revenue by digital competitors. Saga, a company operating across 28 local markets, is living this reality. Yet, beneath the headline challenges lies a more complex story of strategic transformation, capital discipline, and mounting investor expectations. The presentation isn't just an update; it's a high-stakes pitch on why Saga Communications belongs at a conference focused on growth.

A Tale of Two Ledgers

A look at Saga's recent financial performance reveals a company fighting a war on two fronts. The top-line numbers paint a challenging picture. For the third quarter ending September 30, 2025, net revenue dipped 1.8% to $28.2 million, missing consensus estimates. More alarmingly, the company reported a diluted loss per share of $0.08, a stark contrast to analyst expectations of a $0.21 profit. For the first nine months of 2025, the company slid into an operating loss of $1.5 million, a significant reversal from a $1.4 million operating income in the same period a year prior.

These figures reflect the persistent pressure on the company's core radio business, where station operating expenses are rising while revenues soften. The volatility of the sector was masked in 2024 by a surge in political advertising, which contributed approximately $3.3 million for the full year. Management noted that without this cyclical boost, gross revenue in the fourth quarter of 2024 would have been down about 6.5%, highlighting the underlying weakness in the traditional ad market.

However, digging deeper into the filings reveals a burgeoning second act. Saga's interactive revenue has been a consistent bright spot, climbing 20.9% to $11.6 million for the full year 2024. This momentum has accelerated, with the company reporting by mid-2025 that it had already surpassed its entire 2024 digital revenue total. This is the core of the growth narrative Forgy and Bush will be championing—a digital business that is not just growing, but accelerating.

Beyond the Airwaves: A Bet on Blended Advertising

The engine behind Saga's digital push is a strategy it calls "Blended Advertising." The approach moves beyond simply selling radio spots and instead leverages the company's trusted local sales teams to offer clients a bundled solution of radio, search, social media, and over-the-top (OTT) video advertising. In a digital marketplace that many local business owners find fragmented and confusing, Saga is positioning itself as a one-stop-shop marketing partner.

The early results of this strategy are the most compelling data points in Saga's investor pitch. The company has found that local advertisers who adopt this blended product don't just add digital spend—they deepen their commitment to radio as well. Data from January to October 2024 showed that these clients increased their radio spend by 9% year-over-year, while their total combined radio and digital spend with Saga surged by an impressive 27%.

This strategy seeks to turn a perceived weakness—a legacy in local radio—into a strength. While national digital ad spending is projected to reach $342 billion in 2025, accounting for 75% of the total market, radio's slice of that digital pie remains minuscule. Saga's bet is that its deep community roots and established client relationships provide a crucial competitive advantage in capturing a larger share of local digital ad budgets, an opportunity many purely digital players struggle to access cost-effectively.

Capital, Governance, and Investor Questions

Beyond the operational pivot, investors at the Noble conference will be scrutinizing Saga's capital management and corporate governance. The company maintains a solid balance sheet, ending Q3 2025 with $26.3 million in cash and short-term investments and no significant debt. It has also demonstrated a strong commitment to shareholder returns, having paid over $141 million in dividends since 2012 and maintaining its $0.25 quarterly payout despite recent earnings pressure.

A key development is the company's plan to evaluate the sale of non-core tower assets. Management has signaled that proceeds from any potential sale would likely be directed toward stock buybacks or special dividends, a move that would be welcomed by value-oriented investors. This capital allocation strategy will be a focal point, as it demonstrates a commitment to unlocking shareholder value from legacy assets to fuel future returns.

Adding another layer of intrigue is the issue of governance. Saga has announced its intention to refresh its board, potentially adding a director with deep digital expertise. This move comes as shareholder Gate City Capital Management has put forward its own slate of four nominees for the board, signaling a degree of investor activism and a desire for more aggressive change. This external pressure adds urgency for management to prove its current strategy is the right one.

As Forgy and Bush prepare their presentation, they know the one-on-one meetings with qualified investors will be just as important as their time on stage. The questions will be pointed: How will you reverse declining profitability? What is the realistic timeline for digital growth to fully offset the erosion in broadcast revenue? And with a recent earnings miss, how secure is the coveted quarterly dividend? The challenge is to convince a room full of growth-focused investors that Saga Communications is not just managing a decline, but is actively engineering a profitable and sustainable future.