Financial issues with Davis/La Raza?

[jabba17]

http://www.allaccess.com/net-news/a...r-transfer-of-atlanta-area-trio?ref=mail_news

I don't know if this is due to financial issues at Davis or just creativity in financing and sale of a station. But how has La Raza been doing in the sales department lately? I had heard that the Latino market was down since the Great Recession, and what was left was being hoovered up mainly by iHeartChannel/Patron.

Curious as to what will happen to La Raza going forward.

 

[secondchoice]

I do not know the financials of either party but a $9 million investment would yield $225,000 a year in long term CD's @ 2.5%. Rates today are lower*. Assuming a risk "premium" of at least 3 times the soon to be 2.5% CD rate, that would be about $675,000 or $56,250 a month. So if this operation has a positive cash flow higher than $60K I would not expect any major changes if it is to be resold.

I had my doubts about taking 100.1 to a Latino format years ago because the station's location. I realize there are Hispanics in Canton but 100.1's signal is not the greatest in parts of Canton. I am not sure how many PPM units are north of Canton, but both Gilmer's (transmitter site) and Pickens County's population is less than 60K combined. I guess 100.1 was a western "relay" for the Buford station, but IMHO a lot of 100.1's signal is not in areas with a lot of Hispanics.

BTW: I have have noticed fewer Hispanics in Gilmer and Pickens Counties.


http://www.bankrate.com/partners/se...rates&ef_id=VTjkmAAABbC6FbkX:20150423122456:s

 

[RoddyFreeman]

That news blurb is a little over my head. But 102.3 has always billed really well for a station its size. I don't know if that has changed or the large loan got Davis into trouble, or as Jabba said, it could be creative financing.

 

[davideduardo]

I do not know the financials of either party but a $9 million investment would yield $225,000 a year in long term CD's @ 2.5%. Rates today are lower*. Assuming a risk "premium" of at least 3 times the soon to be 2.5% CD rate, that would be about $675,000 or $56,250 a month. So if this operation has a positive cash flow higher than $60K I would not expect any major changes if it is to be resold.

A $9 million business loan for a risky small business can pay somewhere between 8% and 10% and in some cases even more. You will notice that some of the companies like iheart and Cumulus have been trying to refinance or pay down loans that pay above 10% of recent.

So the annual cost of that money is around $900,000 at the least.

The Spanish operations are down a bit over 35% in gross revenues since the onset of the recession, and have not recovered. I do not know whether the Columbus properties are interlinked, but Columbus is not a large market; they bill about $2.3 million in that market off of 6 stations.

 

[secondchoice]

As an outsider looking in, I wonder what really happened at Davis/La Raza. Both stations were purchased around 10 years ago: 2003 for 102.3 @ $5,250,000
https://licensing.fcc.gov/cdbs/CDBS...?appn=100660319&qnum=5040&copynum=1&exhcnum=1

and 2006 for 1290 / 100.1 @ $3,800,000

https://licensing.fcc.gov/cdbs/CDBS...?appn=101158671&qnum=5120&copynum=1&exhcnum=1

for a total of $9,050,000.

Did Davis “bleed” cash out of this operation or did it not make enough money to make any meaningful reduction in the loan?

 

[AMRocks]

I always thought that Radio One, owner of 102.5, should buy 102.3 and simulcast. I'm sure they could work out any signal issues and, if they own both, they could file for power and transmitter changes to make both stations have the best coverage area.

 

[Unregistered]

How about K-Love 102.3/100.1?

 

[jabba17]

I always thought that Radio One, owner of 102.5, should buy 102.3 and simulcast. I'm sure they could work out any signal issues and, if they own both, they could file for power and transmitter changes to make both stations have the best coverage area.

Except black gospel probably doesn't have the biggest audience in Gwinnett and points north.

 

[RoddyFreeman]

I always thought that Radio One, owner of 102.5, should buy 102.3 and simulcast. I'm sure they could work out any signal issues and, if they own both, they could file for power and transmitter changes to make both stations have the best coverage area.

Radio One and Davis Broadcasting were trying to work out a deal a few years ago. Radio One wanted Davis to move 102.3 farther north so 102.5 could increase power. In return, Davis would get Radio One's Charlotte stations. But the 2 companies never came to terms.

 

[jabba17]

While we're on the subject of Latino radio, what's currently up with WAZX-FM 101.9? That might preclude any move of 102.3 north.

 

[AMRocks]

Except black gospel probably doesn't have the biggest audience in Gwinnett and points north.

I didn't say they should keep the current format. I just think the two signals make a nice pair.