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WLUP Sold To EMF

I’m guessing that this will be the way of the future for owners looking for a quick sale. While ever there is religion, there will always be money. Stuff the audience, just give me money.
 
Then again, this demonstrates that there really are no other potential owners out there. No new generation of "mom & pop" types who want to take over heritage FM radio stations and run them basically as charities for music lovers.
 
Well, there goes another station off my presets. First 104.3 and soon 97.9. Really running out of reasons to continue listening to broadcast radio at all anymore.
 
I thought most likely that Hubbard would pick up both 97.9 and 101.1. Now, my prediction is that either Hubbard, Weigel or Sinclair will pick up 101.1. WKQX would make a logical stablemate for WDRV.

I nailed the price.

A post I made weeks ago in the other thread:

If one uses an Income Approach method of valuation based on Cumulus' mediocre cash flow from these two stations, the conclusion of value would likely be far under $50 million. However, I contend a better operator (read: Hubbard) would be able to extract more cash flow.

Precedent transactions should be considered when trying to arrive at an estimate of fair value. One that quickly comes to mind - at least for me - is the recently closed sale of the former KSWD-FM in Los Angeles to Educational Media Foundation. EMF buys stations based on "stick value," not cash flow generation ability of an existing format. In that case, I believe EMF paid about $50 million. Granted, Chicagoland's economy isn't as wealthy and the region isn't as highly populated as the greater Los Angeles area, but if a station such as KSWD can fetch a stick value of around $50 million, I think a Class B stick in Chicago is worth maybe 40% to 50% that figure. (Bear in mind 100.3 MHz in L.A. is a grandfathered Class B with a power/HAAT combination closer to a Class C1 or Class C0 station.)

I think the "right" number probably isn't terribly far from the $50 million amount Merlin had been seeking. I would say a range of $42 million to $45 million. A good operator should be able to grow these stations to $8 million a year in annual EBITDA (combined) within a couple years of acquisition.
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I estimated a value range of $42 million to $45 million for BOTH stations. Merlin just sold ONE of those two stations for $21.5 million.

No one should be terribly surprised that EMF made a deal with Merlin here. After all, EMF is the company who purchased 106.9 in Philly from Merlin.
 
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Saul the Iguana Killer said:
I initially thought it was a joke as well. What a lousy turn of events for such a heritage station.
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Joining WCCC Hartford in that club. As long as weak-minded suckers keep listening and writing the checks, though, EMF will be happy, not to mention that by buying a rock station, they will have banished "Satan" from yet another frequency.
 
CTListener said:
Joining WCCC Hartford in that club. As long as weak-minded suckers keep listening and writing the checks, though, EMF will be happy, not to mention that by buying a rock station, they will have banished "Satan" from yet another frequency.
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There's only one problem with your stereotypes...

The people in charge of EMF aren't your typical Southern preachers who think that rock music is evil.

They're radio guys, who came up through rock and top 40 radio. It's one of the reasons why they're so good at what they do: they know how to program radio stations.

Think of it this way: they've come up with programming that their audience is willing to pay to listen to, and because of that, they have moved up from buying a bunch of rimshot stations and translators to buying some major market signals without being in debt to their eyeballs.

K-Love and Air 1 spend almost nothing on marketing their stations, relying on word of mouth and some small street teams in the various markets. Yet they build a deep enough bond with the audience that when they ask for money, they get it.

I'm not advocating that rock stations start asking for donations, but if other stations focused on building an audience and serving it like EMF does, maybe they wouldn't be needing to sell.

There was a time when The Loop could ask their audience to run through a wall for them and they would. But it's been a long time since Disco Demolition...
 
Once again, in the free marketplace, that license was available for anyone who had the money to buy it. You'd think someone in Chicago would have the money for such a thing. But those who do aren't necessarily interested in owning radio stations any more. So when people complain about the choices on OTA radio, and why isn't there more rock radio or things like that, the answer is because no one is willing to spend the money to keep it on the radio. Whereas there are lots of religious folks who can and will find the money to keep what they want on the radio. I constantly read people say if the Pacifica folks would sell WBAI, that license would be put to better use. That pre-supposes that the new owner is interested in commercial musical formats, and you can't make that assumption any more.
 
EMF is good at what they do from a programming and technical standpoint. But being a non profit organization certainly doesn't hurt their financial position. A lot of benefits accrue from that status that has helped them and were not available to commercial broadcasters.
 
Andy Travis said:
EMF is good at what they do from a programming and technical standpoint. But being a non profit organization certainly doesn't hurt their financial position. A lot of benefits accrue from that status that has helped them and were not available to commercial broadcasters.
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Good point, and there are rock stations like KEXP in Seattle that benefit from their nonprofit status as well. Perhaps looking towards the future, given the experience of companies like iHeart and Cumulus, it might be worthwhile to view radio as a non-profit operation, rather than as something from which to make money. Otherwise, it's possible we might see a lot more venerable frequencies becoming outlets for religion.
 
Feder reports that K-Love launches Saturday, and that Loop "programming will end today" with Cumulus no longer programming the station by the end of the week.

I've been listening for about half an hour and haven't heard any jocks.

Feder reports that Cumulus is still trying to buy WKQX from Merlin.
 
TheBigA said:
Otherwise, it's possible we might see a lot more venerable frequencies becoming outlets for religion.
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What boggles my mind is just how bottomless the coffers seem to be as far as listener-supported religious programming goes. Maybe in a place like Chicago there are limits imposed by demographics and the high cost of entry on the FM dial, but elsewhere, it seems the entire spectrum can be eaten up with religious programming that is being well funded. Down here in the Bible Belt, I can pick up no less than 19 different religious signals, NOT including translators. Of those, 6 are full power FMs IIRC. If I was to factor in the regular reception of rimshots and translators, it'd be a much higher number. Some are commercial signals on AM, but most are NCE.

I guess when secular listeners have 10,000 choices to stream on their phones, AM/FM radio's slide into niche ethnic programming and religious barking is irrelevant.
 
TheBigA said:
I had to check my calendar to make sure it wasn't April 1st. But apparently it's true:

https://radioinsight.com/headlines/166554/educational-media-foundation-acquires-97-9-wlup-chicago/

That's certainly one way to stick it to Mancow.
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Good one, BigA! Deeper in this thread you mention "mom and pops" and that there is no one else to buy this station. Sadly. True. What was it billing as of late? Wonder if there were "lease to own" ops or other deals to be made and EMF at least asked. I am not sure this is good for the dial. As a city gets fewer music or talk options, people look for other options outside of radio. There is that price to pay. One less competitor on the dial is logical thinking, but to me not big picture thinking. Interesting day for Chicago radio. And beyond.
 
tomservo said:
I guess when secular listeners have 10,000 choices to stream on their phones, AM/FM radio's slide into niche ethnic programming and religious barking is irrelevant.
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In the case of the EMF formats, the difference is the business model. Both formats are simply part of the kinds of formats that people want to hear, and they are well done.

Look at The Fish in Atlanta, generally in the top 4 to 5 stations in the market, particularly in the key demos. Contemporary Christian is a format a large group of listeners want, so the spectrum is not wasted.

EMF does their formats well, and they have, perhaps smartly, chosen a listener support model rather than selling advertising. While that lets them use non-commercial frequencies, it is also a strategy that makes the listening experience very positive for listeners.
 
Tibbs4 said:
As a city gets fewer music or talk options, people look for other options outside of radio.
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So Contemporary Christian is not a music option? It's a very successful format, both for EMF and other broadcasters.
 
People are willing to write checks to K-Love. They aren't always willing to write checks for rock (as witness the former WNKU, Cincinnati.)
 
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