With CBS officially ridding themselves of their radio operations, one has to ask why? Was the division a “drag” on earnings or cash flow? I believe they are profitable and generated cash. IMHO the radio division was perceived as a no growth business. Could it be because iHeart / CC and Cumulus are killing the industry by cannibalizing their inventory to pay their debts? Both need to be taken out of their zombie status by restructuring. Just moving the chairs around on the sinking debt ship will not solve the issue.
IMHO there should be a lowering of cap limits in ALL markets to 3 FM and 3 AM stations or if existing cap limits are lower in small markets, let them stay in place. The ratcheting of the ownership caps should be lowered 1 station per band every 16 months. Translators on AM stations would be allowed 20 miles radius 60 Db from tower no matter what class the station was. If the AM signal allows more coverage under current regulations then that is OK. Hopefully this will bring more competition and maybe some innovation into the business. The profit margins in radio are not bad 15 to 19 %*. If you can’t program and sell 3 FM signals plus the AM’s and their translators you should to go out of business. If you pay too much for any business you usually end up in bankruptcy court. Radio is no exception. Eight times EBITDA would be the most I would pay for a station unless I felt there was a big increase in billings possible. 106.7 in Atlanta is such a station: Big payroll (news talk) while 104.7 (CCM) with a smaller staff on the same tower but at a lower power is rumored to be billing twice what WYAY is.
The future may not be internet delivery. Just about anybody can set up an internet “radio station” but how get enough listeners to stream the station to sell adds can be an issue. Just ask the shareholders of Pandora:
http://data.cnbc.com/quotes/P/tab/5
I guess those antiquated towers and transmitters apparently are serving a purpose. Cumulus had an EBITA of 17%.
http://www.cumulus.com/investors/
Is it safe to assume on the air radio will remain a viable medium until the cell companies give away streaming data?
IMHO there should be a lowering of cap limits in ALL markets to 3 FM and 3 AM stations or if existing cap limits are lower in small markets, let them stay in place. The ratcheting of the ownership caps should be lowered 1 station per band every 16 months. Translators on AM stations would be allowed 20 miles radius 60 Db from tower no matter what class the station was. If the AM signal allows more coverage under current regulations then that is OK. Hopefully this will bring more competition and maybe some innovation into the business. The profit margins in radio are not bad 15 to 19 %*. If you can’t program and sell 3 FM signals plus the AM’s and their translators you should to go out of business. If you pay too much for any business you usually end up in bankruptcy court. Radio is no exception. Eight times EBITDA would be the most I would pay for a station unless I felt there was a big increase in billings possible. 106.7 in Atlanta is such a station: Big payroll (news talk) while 104.7 (CCM) with a smaller staff on the same tower but at a lower power is rumored to be billing twice what WYAY is.
The future may not be internet delivery. Just about anybody can set up an internet “radio station” but how get enough listeners to stream the station to sell adds can be an issue. Just ask the shareholders of Pandora:
http://data.cnbc.com/quotes/P/tab/5
I guess those antiquated towers and transmitters apparently are serving a purpose. Cumulus had an EBITA of 17%.
http://www.cumulus.com/investors/
Is it safe to assume on the air radio will remain a viable medium until the cell companies give away streaming data?