Townsquare Media, Inc. (TSQ) Well-Capitalized, Able to Tap Local Market Dynamics for Advertising, Live Events via High-Traction Radio & Web Footprint

Townsquare Media, the first media outfit in a decade with a large portfolio of radio assets under their belt to go public, has seen steady growth since their $11.00/share, $143.8 million IPO back in July of 2014 and the company is currently trading upwards of $13.00/share on solid growth within their core local advertising and entertainment market operations. Enabled as it is by a massive, high-traction footprint spanning 66 small to mid-sized markets across the country, including some 325 and growing companion websites linked to 311 local radio stations (in addition to the production of numerous live events each year), Townsquare Media is thriving in an age characterized by transition to digital content and distribution.

Engaged audiences who are passionate about their local radio station brands, like The Blaze, The Point, The Hawk, K99, WYRK, New Jersey 101.5, and hundreds of others, have been a vital source of continued bottom-line growth for TSQ, widely opening the door to adjacent marketing opportunities. Something the company classifies as their “Townsquare Everywhere” strategic plan, which philosophically takes up the form of a nodal network of localized efforts, where much of the impetus is assigned to local market employees who truly understand their regional market dynamics.

The company has shrewdly assembled a media architecture that connects with listeners and live event goers, directly channeled through a highly localized presence across several Northeast, Midwest, Southwest, and Mountain states. Since the acquisition back in November of 2013 of key AOL Music assets (blogs) like The Boot, The BoomBox and NoiseCreep, as well as one of the most established online voices in the growing comic book culture, ComicsAlliance, TSQ’s library of premium music and entertainment websites has flourished, with current web presence figures in excess of 50M unique visitors per month. Consider for instance that just one of the company’s brands, hard rock and metal news focused Loudwire, which is the media front for the company’s Loudwire Music Festival, has over 112k followers on twitter and over 102k subscribers on YouTube, and you can start to understand just how extensive the company’s true macroscopic reach is.

With hugely trafficked websites like Taste of Country, Diffuser.fm, Ultimate Classic Rock, Loudwire, and PopCrush under their umbrella, Townsquare Media has rapidly amassed an enormous following in the aggregate and represents a digital marketing and services powerhouse through their Townsquare Interactive division. The company has a well-oiled team of industry-leading experts that understand how to connect with target audiences and can deliver the right products and services for specific a client and regional market/demographic. Whether it is an easy-to-update website using the company’s proprietary technology, or social publishing, cutting-edge SEO, and reputation management, TSQ has all the tools required to obtain and maintain an audience. TSQ even has a personalized radio streaming App for iOS 5.0 and Android OS 2.1 called radioPup, which features over 300 local radio stations spanning the gamut of content, from Classic Hits, Classic Rock, Country, Hip-Hop / R&B and Lite Sounds, to News and Talk, as well as Pop, Rock and many other genres/formats.

As the third largest owner of radio stations in the country, TSQ is in an enviable position to promote the approximately 500 or so live events they produce each year, which garner over 600k local attendees, making the company a superb channel for both artists and advertisers. The company has made excellent use of their vast radio footprint, leveraging their traction with listeners to launch ancillary vectors like digital content and their live events, creating a truly multi-product, local market tailored media and entertainment empire that can really tap into those hard to reach demographics in ways other mediums cannot. This approach of utilizing the radio assets as a platform to execute a multi-product configuration harnesses the inherent value of the premium content library and influential publishers the company has access to, offering audiences not only highly engaging original content, but fascinating editorial experiences and social media driven conversations.

TSQ is thus an epicenter of influencers and activators, directly impacting an estimated 50 million plus, highly social audience activators on a daily basis, who amplify the company’s media presence and further extend marketing reach. This is evinced by the company’s preliminary pro forma Q4 2014 financials, which look quite strong and are well in line with previously issued guidance. The company intends to go over their financials this March 16, when a full breakdown of FY14 and Q4 data will be offered to markets, so interested investors will want to keep an eye out for that announcement. Some of the choice highlights from the company’s preliminary financials are Q4 net revenue that is up as much as 10% to $94 million compared to 2013, as well as year-over-year net revenue up roughly 8%, to some $385 million, with approximately 30% of that figure attributable to sources other than terrestrial radio station advertising. The company also has cash on hand of around $24.5 million, making them one of the most well-capitalized players in the game.

Townsquare Media owns and operates some of the hottest names in music festivals around the country today, as well as other live events. Whether it is multi-day music festivals like WE Fest, Country Jam and the Loudwire Music Festival, or popular events like the only nation-wide series focused on craft beers, America on Tap, or the biggest obstacle race using inflatables in the country, the Insane Inflatable 5K (which the company created and promotes), Townsquare Media is at the forefront of modern event organizing. The company also produces a variety of expo/trade shows for the home and garden, plant and flower, wedding, and outdoor recreation markets, focused on business to business and business to consumer vectors. Again, this entire live event chunk of the company’s business is well served by their media presence reach and should continue to afford the TSQ an expansion ramping strategy as they grow their radio and digital entertainment footprint.

Moving forward, the company’s Townsquare Everywhere growth strategy will continue to be squarely focused on the small to mid-sized market where TSQ has already attained considerable mastery over the economics and audience engagement metrics, with further accretive acquisitions like those in 2013, limited to truly compelling opportunities, like their September 2014 acquisition of iconic hip hop brand XXL, along with King and Antenna from Harris Publications. The company will continue to plow serous time and resources into expanding their lucrative live events portfolio, while maintaining a firm grip on the local advertising space, where their sizeable footprint in radio, cross-platform and multi-product capabilities gives the company a decisive advantage. To this end, renewed emphasis will also be paid to arming their local sales teams, so they can continue to drive revenues as advertisers start to flood back into the relatively cheap, audience-capturing radio market. The inaugural Loudwire Music Festival in Grand Junction, Colorado this June should be a huge boon to the company’s already stellar audience size and the turn out for all six of their multi-day music festivals this year is anticipated to be high, with huge draws being driven by hot artist line-ups tapped for each event.

According to IBIS World data published in July of last year, the $17 billion radio broadcasting market looks to have a solid 1.9% CAGR, further bolstered over the next few years by improved advertising budgets and a considerable return to traditional formats like radio for advertisers, especially for companies like TSQ, which has the web tie-ins required to give advertisers the bang for their buck. The robust position of a company like TSQ is further reinforced by FCC licensing requirements that keep the radio market centered in the hands of already established stations and the company’s embracing of digital media and streaming, as well as diversification into producing symbiotic live events, makes them one to watch.

Take a closer look at Townsquare Media by visiting www.TownsquareMedia.com

About MissionIR 

MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.

Sign up for “The Mission Report” at www.MissionIR.com

Please see disclaimer on the MissionIR website http://www.missionir.com/disclaimer.html