It was no surprise to learn that Sirius XM radios advertising revenue dropped in the first quarter. The drop was anticipated by many and reflective of the cash strapped nature many companies are facing with their advertising budgets. A 20% drop in ad revenue is never a good thing, but news today can give investors some solace in knowing that Sirius XM is not alone.

Clear Channel revenue dropped 22% and Cox Radio saw a decline of 23%. What this means is that the problem of ad revenue is not only dropping across the board, but it is happening in a very balanced manner. The theme is common, and the actions by the respective companies is also common. Work hard to cut costs.

How long the advertising slump will last is anyone's guess. At least, for the time being, satellite radio can fall back on their subscription based revenue. From an investors standpoint, low ad revenue likely means that low multiples (8x) will still be the going trend in determining valuations.

[Clear Channel | Cox Radio via Radio and Records]

Position: Long Sirius XM Radio. No Position Clear Channel, Cox Radio.