Thoughts and observations on the radio/TV station and wireless tower trading markets. A look at the impact and integration of new media into station operations.
Station values, stations for sale, radio and TV station news, towers, and more from the Managing Director of Media Services Group.
Last week's announcement that heritage, big signal, Atlanta News-Talker WSB-AM (750 kHz) was adding an FM simulcast is yet another benchmark in the growing trend of talkers migrating to the FM band. It follows similar moves by KSL in Salt Lake City and KCBS in San Francisco. While these appear to be smart moves, I believe that they sound a large warning signal for AM station values in the future.
A strong case could be made that the big AM News-Talkers like WSB have kept the AM band alive. News-Talk listeners have been content to seek out their programming on the AM band. If all of the major AMs throw in the towel for the FM band, who will be listening to AM? My guess is that AM will be dominated by niche players in the future: foreign language, religious, and other specialty programming.
Station prices are based on supply and demand. It looks like AM supply will be increasing at the same time that demand is decreasing.
If you are working on a business plan (hopefully for station acquisitions!), Inc. magazine has a good resource: Business Plan Presentation. It is a basic PowerPoint template which may serve you well as a starting point for your presentation. At worst, it would serve as an antidote for writer's block.
The bad news is that is was a very slow first half of station trading. The good news is 1) it was a lot more active than a year ago, and 2) things are shaping up nicely for the second half. Here are the transactions announced by Media Services Group for the first six months (Note: we used BIA estimates of revenue):
Sale Announced: 01/10 Calls: WMNE-AM (now WHTY-AM) Buyer: Travis Media Seller: Radio Disney Market: West Palm Beach-Boca Raton Market Rank: 47 Price: $500,000 Gross Revenue (BIA): $150,000
Sale Announced: 3/10 Calls: FM CP Buyer: Chadrad Communications Inc. Seller: Big Cat Broadcasting, LLC Market Rank: Unrated Price: $85,000 Gross Revenue (BIA): N/A
Sale Announced: 3/10 Calls: KDJQ-AM Buyer: Iglesia Misionera Pentecotes, Inc. Seller: KDJQ, LLC Market: Boise, ID Market Rank: 100 Price: $325,000 Gross Revenue (BIA): N/A
Sale Announced: 4/10 Calls: WCKZ-FM, FMW204BF Buyer: Star Educational Media Network Seller: Northeast Indiana Public Radio Market: Orland, IN Market Rank: Unrated Price: $225,000 Gross Revenue (BIA) : N/A
Sale Announced: 5/10 Calls: AM CP Buyer: Acme Broadcasting III Seller: Pamplin Broadcasting Inc. Market: Reno, NV Market Rank: 121 Price: $20,000 Gross Revenue: N/A
Sale Announced: 7/10 Calls: WHPI-FM, WPIA-FM, WZPN-FM, WWCT-FM Buyer: Big Toe Communications, LLC Seller: Independence Media Holding, LLC Market: Peoria Market Rank: 150 Price: TBA Gross Revenue: $1,350,000
A number of broadcasters teamed up to file reply comments with the FCC seeking repeal of the AM/FM subcaps on July 26. The coalition represents some 668 stations in markets of all sizes. My two broadcasting companies (Monticello Media and MSG Radio) as well as our brokerage firm signed onto the comments.
If the subcaps are repealed, it will result in new capital coming into our capital starved industry. I predict that a number of broadcasting companies may be saved from bankruptcy if the subcaps are removed on a timely basis.
The subcaps are no longer (if ever) justified. You can read the details in the Reply Comments. Essentially, if you operate in a market where ownership of four FMs and two AMs is allowed (or four AMs and two FMs), the removal of the subcaps would allow you to own six stations, regardless of flavor. If they are repealed, unprofitable clusters can swap/trade/buy/sell and improve their strategic and financial positions.
Repealing the subcaps will awaken a stagnant industry, introduce fresh capital, and open doors for new minority ownership. Let's hope that the FCC sees the wisdom of eliminating an antiquated burden on broadcasters.
Our condolences go out to the family, friends, and colleagues of Syd Small, who passed away last weekend. Syd was President and CEO at Access.1, where he ran radio stations and networks. He may be best known for operating WWRL in New York, which he ran for almost 30 years.
The Radio Show comes to Washington, DC, September 29 through October 1. This year's show is a joint undertaking between the NAB and RAB. Media Services Group will be located at the headquarters hotel, the Grand Hyatt Washington.
If you would like to set up an appointment to meet, please drop me a line at: