COX is going to concentrate on major markets, so they are dumping their Honolulu stations.
Thoughts?
Thoughts?
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COX Honolulu getting sold
- Thread starter RBRadioWaves
- Start date
Ivan Badget said:
I concur. I wonder if a format change for KCCN is in the offing, as they'd been billing their annual Birthday Bash as "the last ever.
Lopaka said:
Honolulu is not a great radio market. There are only about $32 million dollars to split between 37 commercial stations in the market. To put that in perspective, Cox' WSB AM in Atlanta billed just slightly less than that amount last year.
KSSK AM and FM, the old KGMB, takes nearly a third of the revenue.
Cox' Krater does just over $2 million, and the two Cox Hawaiian based formats bill about $1.7 mil each, give or take a hundred k. These three are all in the top 5 billers in the market, and it's a pretty safe bet that whoever buys the properties will not mess with them.
KPHW is a much weaker performer, and the two AMs, like AMs anywhere, are of limited value.
"Honolulu is not a great radio market"
Yeah, well, it is the only one out here, and there are about a million souls on Oahu, so it is what it is. Your opinion is just that, and matters little to those who live and work here.
Considering the various cultural factors of the Honolulu market, it is doing pretty well, not to mention having so many signals for such a small population base.
Yeah, well, it is the only one out here, and there are about a million souls on Oahu, so it is what it is. Your opinion is just that, and matters little to those who live and work here.
Considering the various cultural factors of the Honolulu market, it is doing pretty well, not to mention having so many signals for such a small population base.
Don Mussell said:
I don't think he was trying to insult Honolulu. I think his point was that there's relatively little cash flow in the radio market, and that doesn't make it very attractive to potential station owners. I suppose, though, that they could go on really nice business trips and expense them on their taxes!
Don Mussell said:
That Honolulu is not a great radio market should matter a lot to everyone.
Generally, when speaking of station sales and revenue, the in-context usage of "great" or "not great" refers to market billing. While I could have added that, and in retrospect should have for you, it's a given in such situations.
Honolulu is way over-radioed and less than half the facilities licensed to the market are considered viable. The number of distress sales shows that many operations are marginal or unprofitable and running on very limited budgets... such operations have little money to spend on salaries, research, technology... or even rent.
Other "not so great" markets include Albuquerque, Reno, Las Vegas, Grand Junction, Boise, Palm Springs, the Florida Keys, USVI, and Puerto Rico.
"I suppose, though, that they could go on really nice business trips and expense them on their taxes! "
Yeah, we have watched those folks come and go over the years. They won't make it here. Those who are here for the long term know that anyone expecting to make quick big money or try to compare the radio "market" here to places in other parts of the planet are bound to not understand this place at all. As is said often, "this ain't the mainland."
For a good example of a fool who thought he could just come in and bluster his way into this small town called Hawaii, read "Vodoo Tower" sometime. A great example of a guy who, while a half-decent writer, was at least as clueless as the folks who got off the cruise ship for 3 hours looking for the real Hawaii.
Yeah, we have watched those folks come and go over the years. They won't make it here. Those who are here for the long term know that anyone expecting to make quick big money or try to compare the radio "market" here to places in other parts of the planet are bound to not understand this place at all. As is said often, "this ain't the mainland."
For a good example of a fool who thought he could just come in and bluster his way into this small town called Hawaii, read "Vodoo Tower" sometime. A great example of a guy who, while a half-decent writer, was at least as clueless as the folks who got off the cruise ship for 3 hours looking for the real Hawaii.
Don Mussell said:
As one who lived and worked in radio in another part of the US that is also an island and also far from the "mainland" I'd agree with your point on trying to make a killing in any location where the principal reason for buying a station was the locale, not the business.
Folks in Traverse City and Palm Springs tell the same kind of stories, too.
But I've made a career out of taking advantage of those who think their market is unique. There are far more commonalities among listeners than there are dissimilarities.
And, still, what makes a market bad is the combination of too many stations and not enough revenue. That always results in lots of stations that can't afford to do a good job in any aspect of broadcasting.
DavidEduardo said:
If these numbers are correct then it would be safe to assume that Cox/Hawaii has a broadcast cash flow of around 4 million per year. That would put a sale price on the cluster of about 30-40 million dollars depending on the multiple.
It will not be easy to find a buyer willing to pay that amount in a 32 million dollar market. The opportunity for return on investment is not great. You'd expect a new owner to make some changes hoping to increase their cash flow and get a better ROI. That means changes are on way. Anyone that buys them will expect to make money.
way out west said:
The numbers are from the most respected source of revenue data. They are going to be as accurate as the reporting each station does and the ability of the compiler to extrapolate the truth.
Places like Hawaii, Puerto Rico and Alaska have higher operating costs for a variety of reasons. So I'd guess that the margins were more like 35% on the Honolulu operations. That would mean more like $2 million to $2.2 million in BCF, and, at a 6 x to 8 x multiple, a value of around $13 million would be appropriate. The "Tourist Destination" surcharge has been applied.
They paid, at the peak of the consolidation frenzy, about $33 million for the cluster, and if they get half that today they are indeed fortunate.
It will not be easy to find a buyer willing to pay that amount in a 32 million dollar market. The opportunity for return on investment is not great. You'd expect a new owner to make some changes hoping to increase their cash flow and get a better ROI. That means changes are on way. Anyone that buys them will expect to make money.
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