There are indeed surprises after closing, but thorough due diligence reduces the risks. Additionally, there is a substantial difference between the AM stations and clusters that were part of the Citadel-ABC deal, and the AMs and clusters that are part of the Entercom-CBS transaction. The ABC AM stations were largely personality driven talk stations that weren't performing well. Citadel inherited problems from day one and couldn't fix those problems. Early quarterly conference calls confirmed the challenges facing the AMs, which weren't revenue leaders in their markets. KABC AM had (has) a comparatively weak signal in Los Angeles. ABC owned limited clusters in NY, LA and Chicago, and had no presence in Boston and Philadelphia. Conversely, the CBS AMs feature very successful all-news and information formats, and bring to the table robust clusters. The number of stations, the signals and the revenue, in the top three markets far exceed ABC's presence. More than likely, David Field and Entercom have thoroughly analyzed the Citadel-ABC debacle, and will avoid the pitfalls that drove the newly merged Citadel-ABC to the brink. Entercom is said to have considered, but declined the purchase the ABC radio stations that Citadel swallowed. As such, Entercom is better positioned to successfully pull off the CBS deal. And I concur, Entercom-CBS won't be paying a lot of attention to Buffalo and Rochester... they'll appear farther out on the radar screen, but they'll still be held accountable.
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No Translator for WGR?
- Thread starter SirRoxalot
- Start date
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Buddy Shula
Guest
How is having four am station in 2017 bad??? Do you know the revenue just 2 of them makes?? If you knew the numbers, you may rethink that.
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Buddy Shula
Guest
Owning any broadcast media is a license to print money. It's a business of relationships.
That's not true.
Sticking to radio...
A read of the FCC summaries of the Annual Financial Reports going back to the 50's showed that half of all US radio stations did not make money. They either lost money, or broke even, perhaps paying a salary to small owner-operators.
That same condition prevailed for the next three decades until the financial reporting was no longer required.
Then, prior to consolidation, the NAB did a study that showed that even more stations were at break-even point or below. Many were unable to allocate money to capital expenditures and stations in many cases were deteriorating. Much of the cause of the further deterioration was the ill-conceived Docket 80-90 rulemaking which added or significantly upgraded or moved several thousand stations.
Deregulation was justified by the fact that radio had become a fairly bad business for anything but the best technical facilities, leaving thousands to wither, take on paid religion or broker time.
Since then, the FCC has added many more station, and created a new class of translators and LPFM station to further overpopulate the bands.
It's not a good business and overall audience sizes are less than half of what they were in 2000.
"Any broadcast media" is a big target. How much money are you making with WWKB?
Look at the many hundreds of AMs in the last few years that have:
- Gone silent, never to return.
- Downgraded their signal in order to sell transmitter land, which is often worth more than the station.
- Become daytimers because they can not afford to keep their night directional operative.
- Is only on the air to justify operating a translator, which can be had with some ease as part of AM revitalization. We know nobody listens to the AM at that point.
- Become daytimers because they lost a transmitter lease and rebuilding a night facility is not worth it.
- Are temporarily silent because they ran out of money and are hoping to sell to someone before the license is in jeopardy.
- Are part of a big group cluster that is being held onto in case there is a path to migration to FM.
- Is part of a big group cluster that would cause a big loss if it were sold for what it is worth when it is on the books at the purchase cost. WWKB comes to mind.
Many broadcasters have taken impairment charges in recent years, writing down 50% or more the book value of AM assets.
AM is down to below 10% of the under-55 audience in most markets. In some large ones, like Houston, the under-55 audience is less than 5% of all listening.
In most larger markets, there are very few AM stations that cover their entire markets day and night. In fact, in the top 100 markets, there is an average of 1.5 AM stations that cover at least 80% of the market day and night with a usable AM signal...
I know the numbers and they are frightening. You offer me a profitable AM like KFI for 4 x cash flow and I would not buy it. You could give me an AM that was just breaking even and I would turn you down.
I suspect that they did not take a big enough impairment adjustment for that one, so a sale at it's real value would really ding the financials. Probably something they do not want to do while the merger is pending.
Buddy, strident though he may be here, makes a good living selling Entercom. A lot of guys would like his list and his drive. He's a better seller than he is a writer, especially here, where many of his arguments have been objectively countered. Now then, a few threads ago, I got into a dust up over a statement to the effect that the small town operators who own stand alone AMs with or without translators, would be left holding the bag. The facts noted in Dave Eduardo's earlier posts reinforce my contention, especially his observation regarding KFI, by no means a withering station. Imagine holding Dunkirk, Lockport and Batavia. Radio certainly isn't a license to print money, but given the proper circumstances, a good living can be made of it... Today, at least.
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Buddy Shula
Guest
You guys keep bashing radio.....it's ok. I prefer to look at things a different way. It's all about content. Relevant/ Local content. Eduardo thinks he is Mel Karmazin. I have 15 years left in radio, and I believe in it. Every industry on the planet has changed because of technology. Not just radio. TV, papers, Billboards, car dealerships, retail stores, healthcare....not one industry has not had to adapt to some kind of change. Radio has done a pretty damn good job of adapting. I believe in it. I believe in it's future. Let's just stop there. You guys just keep digging into the negative. Sorry you choose to feel that way, but I don't. I see happy listens and happy clients. I turned on my 18 year olds car radio the other day, and he listens to WGR. I asked him why. He said it is simple. IT gives him information. Let's talk in ten years.
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