How Radio Prices Have Fallen

[FredLeonard]

Ten years ago, Clear Channel paid $4-million for a Class D AM station in a medium market (Wilmington bounces around the 70s in population, although it's much lower in billings due to proximity to Philly). Many people were surprised Sally Hawkins got that much and that Clear Channel was stupid to pay it - given all the debt they had racked up in earlier buying binges.

Now Disney has sold a Class B station in Detroit (Market number 12) for $3-million.
http://www.radiodiscussions.com/showthread.php?681314-WADL-owner-buys-WFDF-for-3-million.

Audience numbers are down in Wilmington. Billings are way down. Soon AM prices will be lower than home prices.

 

[Ravens]

in Detroit

You can buy a house in Detroit for $100. Like a real house.

http://www.zillow.com/homes/for_sal....762413,42.178671,-83.435326_rect/10_zm/1_fr/

The market has corrected, but you can't compare Detroit to the Philly metro area. The land isn't worth squat in Detroit. Station prices were way too high, and Clear Channel bought way too many stations. That much is true. But the market will just go back to pre-boom prices.

 

[FredLeonard]

But the market will just go back to pre-boom prices.

I think you mean pre-bust prices. In any case, even before Clear Channel and others started binge borrowing and binge buying, inflation-adjusted prices were a lot higher than now - and higher than they will ever be again.

Radio stations in the Detroit market don't have signals that stop at Eight Mile. Check real estate prices in Grosse Pointe, Birmingham, Bloomfield Hills, Farmington...

A whole bunch of houses in Bal'mer going for a thou right now.
www.realtor.com/realestateandhomes-search/Baltimore_MD/sby-1

And you can also pay a lot more than a hundred for a house within the Dee-troit city limits. Nice spot going for $2.5-million within walking distance of the ballpark.
http://www.realtor.com/realestateandhomes-search/Detroit_MI/sby-2
Or you for that amount, you could buy a radio station in town.

 

[TheBigA]

Dolly Parton was once asked if she had any regrets about anything she said or did. She said, "No, because it all seemed like a good idea at the time." That applies to all kinds of things, including marriage, having kids, and buying radio stations at the top of the market.