KLOVE expanding Detroit signal

K Love just made a deal with Urban One to buy Praise 102.7fm and will soon flip it while giving 3 of its current translators up in the deal. Since 102.7 is a pretty good full market coverage no need for the low power signals for K Love. Praise will continue on the 99.9 translator plus 3 of the current KLOVE translators. I assume KLOVE will put sister station Air one on the Detroit area translators its keeping or they going to let Iheart program them as part of the trade EMF does with iheart nationwide. I wondered why Crawford never made a go with CHristian ac on 103.5 but maybe the financials did not work and Klove can made the money work.

https://radioink.com/2018/05/01/emf-enters-detroit-thanks-to-urban-one/

This is good news. Full power K-Love will be an improvement for 102.7 which, IMO, hasn't had good content since a brief flip to AC in 1999.

The frequency is the former home of WKSG, one of my favorite stations when I was in High School.

Crawford does very well with WMUZ which is why they've never flipped 103.5.

Rick Rose 2.0 said:

I assume KLOVE will put sister station Air one on the Detroit area translators its keeping or they going to let Iheart program them as part of the trade EMF does with iheart nationwide.

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I don't think that EMF will flip the two translators they're retaining to Air 1, nor iHeart would program them, as the translators will still be necessary to fill in certain coverage holes, given 102.7's challenged signal.

To all the people who think there are lots of potential radio owners out there, here's another case where an established company sells a powerful commercial signal at less than market value to a non-commercial religious broadcaster. Why didn't Urban One sell the station to another minority owner? Why not to a local Detroit owner? Because there are no such potential owners available. So keep this in mind as you look to the future of radio ownership beyond the existing radio companies. There are two options if a company sells a radio station: Existing radio companies or EMF. That's it.

TheBigA said:

To all the people who think there are lots of potential radio owners out there, here's another case where an established company sells a powerful commercial signal at less than market value to a non-commercial religious broadcaster. Why didn't Urban One sell the station to another minority owner? Why not to a local Detroit owner? Because there are no such potential owners available. So keep this in mind as you look to the future of radio ownership beyond the existing radio companies. There are two options if a company sells a radio station: Existing radio companies or EMF. That's it.

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Nobody on this thread mentioned anything about a minority owner acquiring the station. I’d think Entercom could be a potential buyer for some of Urban One’s stations, especially in markets where Entercom’s under the max of stations they could own.

miketheradioguy said:

Nobody on this thread mentioned anything about a minority owner acquiring the station.

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Never said anyone did. However, it has been a long-standing focus for the FCC, and was a goal several years ago when Inner City Broadcasting sold WBLS in NYC. This station was once owned by Inner City.

My point remains that there are very few potential buyers for companies looking to sell quality radio signals, and it won't help those who are seeking diversity of ownership in media. Radio Discussions is filled with comments from individuals who would like to see large radio companies broken up, and have their stations sold to local owners. Lots of other comments here about the way EMF runs their stations.

I'm not sure $12M is below market value for that station. I would submit EMF paid full value for it.

I wonder if SmileFM which was planning a Detroit signal, and is a Michigan based Contemporary Christian network, will still proceed with their plans. I'd guess they'll be waiting to see how well K-Love does with the full power signal first. EMF is already doing well in Chicago with the format. Hopefully EMF can do some marketing to let people know about the change.

miketheradioguy said:

I don't think that EMF will flip the two translators they're retaining to Air 1, nor iHeart would program them, as the translators will still be necessary to fill in certain coverage holes, given 102.7's challenged signal.

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I'm not sure I agree, Mike. 102.7 does have a pretty good coverage. At least a few of the translators, 106.3 in particular, would be completely overlapped by 102.7. I could see that, and one or two others going to Air1 which does not have a Detroit presence right now that I'm aware of.

DavidEduardo said:

I've been waiting for the third Urban One station in Houston to go bye-bye. It's an inferior signal, and has not made it in a variety of formats over the years Radio/Urban One has owned it.

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I’m in Houston and have been waiting for the same thing. Add in the fact that Entercom, Cox, IHeart, and Univision are all under the FM market cap, as well as EMF (and possibly other national religious broadcasters) seeking to expand—then Urban One’s KROI would seem to be in play.

I agree with umfan 100% that the transaction terms are in no way "below market value." I would be curious to know how TheBigA arrived at that conclusion.

The terms were $12.2 million cash, plus three translators (still as of yet unidentified) representing $500,000 in value.

Urban One's CEO, Mr. Liggins, disclosed that WPZR's annual broadcast cash flow was only about $1 million per year. So, getting more than $12 million for that signal is a very impressive haul! No commercial broadcaster in this day & age would pay a 12x multiple.

No commercial format in the past 20 years has ever done better than mid/upper 2's in terms of AQH share on that frequency on a consistent basis. The only formats to do even that well were all targeted at African American listeners. The best ratings performer was Hot 102.7, which as the present-day Hot 107.5 has the worst or second worst billing power ratio of any FM station in the market. (There are several stations in GRAND RAPIDS that rake in more annual revenue than Hot 107.5.) Interestingly enough, Hot's ratings on 107.5 are somewhat lower than what they earned back in the day on 102.7.

EMF paid only about $9 million more - in terms of cash consideration - for the mighty WLUP than it did for WPZR! WLUP reaches many more potential listeners, is located in a wealthier market, and is a preset on a much greater percentage of radios in the Chicagoland area than is the case for WPZR in Metro Detroit. I would contend the typical FM station in Detroit only has 40% to 50% the value of the typical FM station in Chicago. Granted, the conditions under which WLUP was sold (i.e. orderly liquidation) were different than the market conditions under which WPZR is being sold. And as far as Detroit FM stations go, this one is the worst of the lot in terms of 70 dBu contour placement.

Coverage wise - WPZR does deliver a very good signal to all of Macomb, much of Oakland, and the NE part of Wayne County. It does struggle a bit around parts of midtown, downtown and southwest Detroit indoors due to distance and RF from other nearby stations, such as 101.9 WDET.

In western Wayne County as well as downriver, reception can be an issue on radios with weak selectivity (102.9 WWWW-FM and 102.7 WPZR have similar field strengths on paper in western Wayne; my personal experience is WPZR is generally the easier to receive of the two). It also does not deliver a reliable signal at all to two Detroit MSA counties - Monroe and Livingston.

As may have been mentioned earlier, the station does have a CP to move to the same tower along Greenfield Rd. in Oak Park that is currently utilized by WDMK and WDRQ, albeit with a deep null toward Ann Arbor. If that CP ever gets built, 102.7's signal in southern Oakland County, Detroit's west side, and places such as Dearborn, Taylor, and Livonia will improve dramatically.

Good thing 99.5 WYCD's tower is nearby; it otherwise would be susceptible major to gigantic RF intermod issues near the I-696 corridor if & when the new 102.7 facilities ever get built. (102.7 x 2 - 105.9 = 99.5. Also, 101.1 x 2 - 102.7 = 99.5. WRIF's field strength is very strong along Coolidge Hwy, Greenfield Rd and Southfield Rd even though its TX site is at Broadcast House.)

in terms of the Houston situation - totally agree KROI needs to be sold! K-Love is currently found on 103.7 in the Houston region, which has horrible coverage of western and southern areas of the market and not so good coverage of downtown, either. KROI would be a definite upgrade for them.

MarkW said:

I agree with umfan 100% that the transaction terms are in no way "below market value." I would be curious to know how TheBigA arrived at that conclusion.

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EMF paid the same $12 million for KPRI in San Diego, a weaker station in a smaller market. But that wasn't my main point. Rather the lack of potential owners.

I think MarkW, not BigA provided those figures, but, as usual, your analysis is spot on.

A commercial entity would not have paid that much for the signal. Urban One made a good deal. It's a good deal from EMF's perspective as well.

WPZR's broadcast cash flow was only about $1 million per year. I realize EMF doesn't buy stations based on cash flow, but I mention that point only because I doubt there is any other commercial FM format out there that would be capable of generating, say, more than $1.5 million in annual broadcast cash flow on that signal.

So, the announced sale price is certainly not below market. If anything, it is several million dollars above market.

Urban One will be receiving the 93.5 Detroit (main lobe is centered over Detroit proper), 98.3 Detroit (main lobe is centered over Dearborn), and 93.5 Riverview (main lobe is centered over Lincoln Park, Ecorse, Wyandotte and Allen Park) translators from EMF as part of the transaction.

I'm a little surprised 105.5 Rochester Hills wasn't included in the mix. Air-1 already broadcasts in that same area at 90.3 MHz, and 102.7 comes in loudly & clearly in all areas served by 105.5.

I agree with David Eduardo; Urban One needs to sell its station @ 92.1 MHz in Houston. I was expecting an announcement of a sale to EMF (K-Love) for that station, too, but no such announcement has occurred. 103.7 KHJK has flimsy coverage of Houston proper and lousy coverage of the western and southwestern portions of the Metro. 92.1 would pair quite nicely with 103.7 if EMF were to acquire it.

It appears Urban One may be using the proceeds from its Detroit sale to fund its recently announced impending purchase of 980 WTEM in Washington. Will that be Urban One's first foray into an all sports format?

Interesting to see that Urban One took some of the Detroit money and used it to buy WTEM-AM in their home town of Washington DC. They bought the station from Dan Snyder, owner of the Washington Redskins, and they got to keep the station's relationship with the team:

https://www.washingtonpost.com/spor...931404-5d18-11e8-9ee3-49d6d4814c4c_story.html

To Mr. Eduardo:
When Mr. Liggins made his "20x cash flow" reference during an earnings call, that was a completely cockamamie calculation on his part. He basically applied an 8x multiple to the pro forma cash flow of the new (not yet on the air) Praise translator network and added it to the 12x multiple he received for WPZR. There's one big problem with that calculation: the ratios have uncommon denominators! LOL

He indicated Praise should be able to generate $500k in annual broadcast cash flow on the trio of translators + the 99.9 MHz translator the company already owns (Urban One recently 86'd the "Soul 99.9" format previously found on W260CB). When looking at the new translator network's overall ability to reach African Americans with a 65 dBu signal or better, my guess is 1/3 of that reach will come from W260CB and 2/3 will come from the newly acquired translators.

In terms of a for-profit commercial use, my valuation range wouldn't be quite as conservative at that of Mr. Eduardo's, but it wouldn't be terribly far from his. I would assign a valuation range of $5 million to $8 million.

The cash portion of the transaction was valued at $12.3 million, if I remember correctly. EMF placed a value of about $470,000 on the three translators it is conveying to Urban One.

As an aside, I would've LOVED to have seen Michigan Radio/WUOM acquire WPZR. That signal would've book-ended beautifully with WUOM and WFUM. I live in eastern Oakland County, and WUOM's signal struggles here indoors. It also struggles across much of Macomb County, the Grosse Pointes and much of Detroit proper. Several major FM radio towers located within a few miles of my house - combined with low lying terrain and a few high rise buildings in the line-of-sight path - does not bode well for me. That said, I clearly understand the fact WUOM would've been able to offer nothing remotely close to what EMF was able to offer.