Salem Communications Emerges as a Major Player in the Consolidation of Conservative MediaBy
The Twitchy acquisition adds to Salem’s growing Internet portfolio, which includes conservative opinion sites (such as Townhall.com and HotAir.com) and Christian faith sites (such as Christianity.com and Godtube.com).
The move may signal that the same forces currently driving consolidation in the digital news industry at large are starting to gain momentum among the ranks of conservative news publishers online. Since the advent of the Internet, a diverse constellation of conservative news outlets has sprung up across the country, creating a rich buffet for GOP-loving readers—and a major logistical challenge for the advertisers hoping to reach them.
In theory, bringing more of the sites under a smaller number of roofs will appeal to the ad buyers who oversee rising digital marketing budgets while simultaneously providing cost savings for the publishers. Thus, the increasing pressure to consolidate.
Salem is well-positioned for a buying spree, in large part due to the profit generated from its 102 radio stations throughout the U.S. In fiscal year 2012, Salem generated $108 million of gross profit on $229 million of revenue. Of the company’s operating income, significantly more came from its radio group ($47 million) than from its websites ($3.7 million).
Now Salem is essentially using the radio profit to help expand the Internet side of its media portfolio. It’s a strategy that makes sense given the broader trendlines in advertising. According to Nielsen, global ad spending in the second quarter of 2013 increased 26.6 percent on the Internet while declining 0.9 percent on radio.
Salem might not be done yet. On Tuesday, Politico reported that the company is also in talks to buy Eagle Publishing, the owner of several conservative news websites, such as RedState.com and HumanEvents.com.
In the meantime, in the wake of the Twitchy acquisition, Salem is already touting its slate of sites as the “largest social media-driven conservative platform on the Web.”