Summary of Saga Communications Conference Call (October 08, 2025) Company Overview - **Company**: Saga Communications (NasdaqGM: SGA) - **Industry**: Broadcasting and Media - **Rating**: Outperform with a price target of $18 Key Points and Arguments Digital Strategy Transformation - Saga's digital strategy is described as a transformational change rather than a traditional strategy, focusing on a cultural shift within the company [2][3] - The company operates in 27 markets, with 21 being below Market 100, presenting opportunities for local advertising disruption [2][3] - Local advertising is seen as overdue for disruption, with businesses increasingly investing in digital but struggling to navigate the complexities [3][4] Advertising Market Insights - In 2024, U.S. advertising spend was $421 billion, with 73% ($309 billion) allocated to digital; projections for 2025 estimate $456 billion total, with 80% ($365 billion) in digital [7] - Radio currently captures only 5% ($21 billion) of total ad spend, and a mere 0.6% of digital ad spend [8] - Local direct advertisers not pitched the blended product risk losing 29% of existing radio business, while those who adopt it see a 9% increase in radio spend [9] Blended Advertising Strategy - Saga's blended strategy combines radio with digital search and display, aiming to double annual gross revenue by capturing just 5% of available digital dollars in 16 of its markets [6][16] - The company aims for digital revenue to grow to 65-67% of total revenue in the future [18] Market Position and Community Engagement - Saga focuses on small to medium-sized markets with strong community ties, enhancing its influence and trust among local advertisers [12][13] - The company emphasizes direct business relationships, which are crucial for the success of its blended strategy [13][14] Growth Initiatives - E-commerce has shown significant growth, increasing from $400,000 to nearly $3 million in revenue over 18 months [27] - Streaming revenue is also growing, with some stations reporting 30% of terrestrial delivery coming from streaming [27] Financial Health and Acquisition Strategy - Saga maintains a pristine balance sheet, avoiding excessive debt and focusing on selective acquisitions [32] - The company plans to continue its dividend policy while also considering stock buybacks from asset sales [34][35] Future Outlook - The company believes local radio can continue to grow despite challenges in national and remnant advertising [31] - Saga aims to demonstrate the effectiveness of its blended strategy to attract investors and narrow the valuation gap with peers [39][40] Additional Important Insights - The company has invested significantly in training its media advisors to become digital experts, reducing reliance on third-party providers [22][23] - Saga's approach to community involvement and local advertising is seen as a competitive advantage in its markets [12][14] This summary encapsulates the key points discussed during the conference call, highlighting Saga Communications' strategic direction, market insights, and financial health.