Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Urban One, Inc.
03 Sep 2020
New York, September 03, 2020 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Urban One, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Key rating considerations are summarized below.
Urban One, Inc.'s (Urban One) credit profile reflects high leverage which will increase substantially in the near term due to the impact of the coronavirus outbreak and economic recession on operations. The radio industry has been particularly hard hit by the pandemic and is also being negatively affected by the shift of advertising dollars to digital mobile and social media as well as heightened competition for listeners from a number of digital music providers. Secular pressures and the cyclical nature of radio advertising demand have the potential to exert substantial pressure on EBITDA performance over time in the radio division. Urban One benefits from diversified operations in radio, cable TV, syndicated programming, and digital media that primarily targets African-American and urban consumers as well as a minority ownership position in the MGM National Harbor gaming resort. Urban One has diversified its operations over the past several years through investments in Reach Media and TV One, completing the company's transition from a pure play radio operator to a diversified media company. The cable TV division is supported by carriage fees from cable and satellite companies and lower programming costs in the near term, but faces challenges from strong competition for its primary audience and the transition of media consumption to OTT services. While leverage is high, the diversified operations reduce the volatility in performance and the shifting business mix of Urban One to cable TV is expected to partly mitigate the impact of the secular pressures of the radio industry over time. Urban One has approaching debt maturities that will need to be refinanced in the near term.
This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.
The principal methodology used for this review was Media Industry published in June 2017. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
This announcement applies only to EU rated and EU endorsed ratings. Non EU rated and non EU endorsed ratings may be referenced above to the extent necessary, if they are part of the same analytical unit.
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
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