This is for all the folks in the micro markets, where I've always mostly hung my hat. From the Boonville, Ms's, Haleyville, Al's, and Louisville, Ga's, to the Perry, Fl's, Union, SC's, and Fairmount, NC's. All considered small markets.

If you're in one of these type markets, how do you calculate your rate card and package rates? Essentially, how much you gonna charge 'em for high school football?

This is definitely not original, but I've used it for a long time, and it at least gives you some place to start.

Begin by taking a look at your format clocks. If you use satellite, it's easy. On a typical Monday, how many minutes could you sell, if you sold-out for the entire 24 hour period? Then multiply that times 7 days, then by 52 weeks, then divide by 12 months. That gives you a number to start with.

If you sell mostly 30's, double the above number. Now, go back and figure how many hours you have special programming on...ball games, races, religion, live-assist, and so on. Go back to your daily, weekly or even monthly total, and deduct those hours of special programming times, and the recalculate toarrive a corrected monthly total of available "spot" inventory.

Now then, if you're like most of us, very few of your advertisers want to buy nights and overnights, so divide your total avails in half.

Now then, if you know what your hard operating costs are...phone bill, electricity, payroll, bank note...all that stuff, even if it's a rough, annual figure, take it, and work that into a monthly figure. Don't forget to calculate those one time expenses...tubes, rights fees, etc. Take that figure, and multiply by 150%. This is how much money you want to BILL (not collect) every month, on average.

Now, go back to your original monthly, 24/7 calculation of your avails (30 seconds), and divide your desired billing figure into the total avails. This gives you a MINIMUM of how much you should charge for a 30 second spot.

Okay, deducting all the night, overnight and non-satellite programming periods, recalculate your new 30 second rate.

Taking that figure, look at the avails in your special programming, such as sports. You should be charging a higher than average rate for this, so look at your hard costs for this. Rights fees, talent, board-ops, line charges and other expenses. Figure out what each event will cost you to broadcast. Triple that figure, then divide that into the number of 30 second avails in the typical broadcast. This should give a MINIMUM charge for each 30 in that particular program. If it is LESS than 150% of your new 30 second spot rate, increase the charge to that amount. If it is GREATER, keep that figure.

As your periods of live programming, decide what the maximum number of spots you'll allow in each hour, deducting for sponsored news, sports and features. Usually, this in prime time, so a premium price should be charged. Again, I'd use a 150% multiple, with sponsored news and such at a 200% multiple.

Finally, look at your periods of block religion or infomercials. If, in that particular hour, you would normally have sixteen 30 second avails, and your "selling every avail 24/7" figure is $3.00 per 30, then multiply 16 times the 3 bucks. That's $48.00, and should be your MINIMUM charge for an hour program. For 30 minutes, use a 65% multiple of your hour charge, 15 minutes a 50% multiple, and 5 minutes a 35% multiple.

Once you've figured all these things...the special programming, news, prime time and block time rates, and have totalled the billing IF you sold out ALL the avails (100%), work all out out into an averaged monthly figure, even with something like high school football...average your revenue over 12 months. Once you've got that totalled, multiply it times 50%, which assumes that you'll only sell half of your "special" avails.

Now then, take the above figure and deduct it from your "I wanna bill" figure. Take that difference and divide it into your average 30 second (non-special programming rate) "daytime" rate. Is the difference less, or is it more? If it's less, leave it alone...use your already calculated "daytime" rate. If it's more, increase your "daytime" rate to the new amount, AND then go back and refigure your rates and charges for the special type programming.

All in all, this may seem like a whole bunch of time wasted on math, but I think it's a required excercise.

In the end, you may not be able to charge exactly what the formula says...the market may not bear it. Keep in mind, however, that you have all that "free" time in nights and overnights, and even 50% of your special programming, that can be used to calculate "added value" (a pretty way to say bonus) spots, which can bring your actual per spot price down, yet let you maintain rate card integrity.

We did that in Jackson, Alabama in 2002, and in one year, more than doubled the billing (and collections)..and we've basically maintained it. Yes, we've sold new people, more new stuff to old people, but mainly, we've charged accordingly to what we needed our income to be, by knowing what our "cost" of each avail was.

<P ID="signature">______________

Jay Braswell - Moderator

Atlanta/North Florida/South Carolina/Georgia Boards</P>

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