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Just for fun: Is it possible to own your own radio station in 2023 and make a profit?

b-turner said:
Quit thinking laying out a million. See what is out there. You might find a situation for much less. You might find a great station that is more. Some small town stations are going for as little as 1 to 3x gross receipts. I spoke to a fellow asking $75,000 for his station that was billing $75,000 with owned studios with living quarters and tower site. His station was popular, the only one in town, and I am not sure he could have billed a whole lot more but he took $2,500 as a salary and lived in the station's apartment, did all the sales and mornings. The station was very turnkey with decent equipment. He had a heart attack and decided it was time to sell.
Click to expand...
That's a great point. There are so many scale layers to running a radio operation, depending on community/market size, outside competition, number or businesses willing and able to advertise, and community support. If you wanted to buy what amounts to a hobby-station, play all your favorites, live at the station to cut costs, go out and beat the streets hoping for enough money to keep the lights on, there are stations right now you can pick up for less than a new car.
 
Reading this thread does much to eliminate any desire I have to own and/or operate any radio station anywhere!

Wow is it expensive!

It might be interesting to work at one someday, however (preferably one that's got its act together and isn't cutting corners and lying about licensing. Being tight is one thing, but cheating like that is against the law).

c
 
If you're not tight and looking to keep costs as low as is reasonable you'll not only fail in radio but most businesses. That's not saying you hurt your product but you watch the costs like a hawk. I can't think of a business where competition and number of competitors allows anything less.
 
fordranger797 said:
This information is very helpful! Unfortunately, I've never set foot in Mendocino, but it sounds like a lovely place to visit. I'm working through a new attempt at designing a budget at this exact moment, and I'm quickly finding that it is going to be insanely difficult to keep this operation going unless I can bring in 60,000 per month. While that may not be possible in a location like Mendocino, how about in a slightly larger market? Using my closest market comparable, KZTM in Washington State, they hit some key areas of population without being a full-fledged Seattle radio station.
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A few points (since KZTM was mentioned)
Regarding station sales in the Seattle market
KZTM 102.9 - a rim shot from the South. $3MM

Earlier rim shots are on South Mountain west of Seattle:
99.3 went for $15MM+ a couple of decades ago;
93.7 sold for $6.7MM on terms, 10 years ago;
97.7 eventually $6MM+ after years under an LMA. Then sold along with a full-market FM and 2 AMs for about $5MM cash plus a ton of media trade.
98.5 at Capitol Peak $1MM CASH.
(Note that prices are coming down...)

I don't know if I've ever seen a sale for 5x Gross Revenues, maybe in the last century. The most common price is 4-6x cash flow. And boys and girls, that's the amount you have left after paying all your operating costs. And as others may have pointed out, there are a lot of expenses missing on that initial posting. A long time ago, there used to be a "rule of thumb" for expected revenues in a market, based on retail sales. Roughly, one could expect broadcast revenues to be in the area of 0.3% of retail sales, and radio's biggest competitor was the newspaper.

Today, especially in smaller markets, most of the local retailers are gone, and most retail sales go to the big box stores, and on-line businesses, and broadcasters don't get any money from them. You know the names... Walmart... Home Depot... Lowes... Marshall's... Ross... Staples... Amazon... and the list goes on. Plus don't forget the $$$ that now goes to internet-based advertising.

One can still make money in this business we all love... if one can find a small market without several stations competing for the revenues.

On the other hand, if someone wants to "invest" their million dollars, give me a call. I may even give you a discount!
 
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