Salem Communications has been losing money for several quarters now. A huge eight percent drop the last quarter. So one must wonder, will they ditch some stations? I saw a real estate sign on their property in Altamonte Springs. The R/E company has the property listed for 750k. Could this be and is this a precursor to a sale of these under performing stations? Just wondering!
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Are Salem stations on the block?
- Thread starter DOGDOG
- Start date
Salem is not "losing money". They have had a decline in revenue vs. the 2016 results, but are expected to have BCF (EBITDA) of around $37 million for the year on revenues of $267 million.
Stations operated in clusters, even AMs, often look at diplexing from fewer transmitter sites as a way of saving money and realizing gains on real estate. The sale of a property is not significant.
I have to disagree with the gentleman in regards to profit or loss. Their third quarter 10Q does show a loss for the quarter for the company as a whole. Of course, individual station results will vary. As for the other questions, the company does own the real estate but the building is pretty old, having been built in 1956. They are asking for more than double the appraised value as per the Seninole County Property Appraiser's website. Don't know what it looks like inside but the age may be why they are wanting to get rid of it. They still have a septic tank according to the Appraiser. I remember one place I worked at, they were ordered to tie into the city sewer system by a certain date. They found out it would cost a huge amount of money because it too was an older building. They decided to sell their building rather than pay out the money and bought another instead. However, I go back to my original thoughts. If the company sees the fourth quarter is also going to be very bad, one of the things to do would be to unload under performing stations. Let's face it, their conservative talk station is unknown in the market as is their 1520 signal. I don't know if the Spanish station has made any headway since they bought it and the religious station may be the only one making a profit but perhaps not enough to carry the other three.
It has positive EBITDA and the full year will report a profit. Year to date has EBITDA of $27, 000 (Q1 to Q3) and Q3 has EBITDA of $9 million; the 4th quarter is projected to come in at just a touch over $10 million.
The county shows it as owner occupied.
I again must disagree with the previous gentleman, up to a point. It is true the Q3 stated an EBITDA as you reported. I know using EBITDA as a gauge is trendy, however, the "bottom line" is profitability. As per the same Q3 results statement the previous gentleman quoted, the "net profit" category does indeed show a loss and correspondingly, the "earning per share" category does not show a positive figure. However, it needs to be stated the loss is not significant as if in the millions of dollars. What is interesting is this is the first quarterly loss in a long time and after those results were announced, stock price dropped dramatically. Historically, Salem has been a decent performer in the market although the volume is pretty thin. I suspect they will pull this out of the dive and all will be well. I find it interesting they are selling their property at the same time of a net profit loss. If there is a trend of their other properties being sold (real estate), that would not be a good sign. Since their two other English stations here are virtually unknown in the market here, that leaves them with the long standing religious station and the Spanish religious station. If you look at the Deland religious station, virtually all their preaching programs are gone as compared to a few years ago. One must legitimately wonder if this is a trend in this market.
Regardless, you asked if their stations are on the block, and the answer, as of this point, is no.
EBITDA, by derfinition, is not "trendy". In broadcasting. it's been the way stations have been evaluated as far back as I remember, which i when I assisted in some of the first purchases made by what became EZ Communications in 1970. It removes taxes, depreciation & amortization and interest expense so that the enterprise itself can be evaluated.
For example, if a company makes adjustments in depreciation schedules, increased or decreased depreciation may appear on a traditional P&L statement. Whether they increase or decrease charges, depreciation may really reflect expenditures made years ago but which accounting and IRS rules require to be charged over their useful life. Similarly, renegotiating debt with more favorable long-range terms may cause a single quarter to have extra charges for certain fees, etc.
Looking at Salem for the full year, and hearing their forward-looking statements for Q4, they are definitely not in any "sell the cash producing assets" situation.
Ever since the 60's, I have believed in "own the transmitter site, lease the studio space" as a guiding principle. Sometimes it's not practical to own the site (such as the Empire State Building and common towers) but as guidance that has always worked for me. I'd suspect that Salem is just making a prudent deployment of capital or, even more simply, just wants to move to a different building.
From www.haddenonline.com
FLORIDA
Orlando and serving the northern part of the market, low dial position AM, big powerhouse, cash flow positive, real estate optional to lease or purchase, staff in place. News, talk, sports. Asking $1.0M
FLORIDA
Orlando and serving the northern part of the market, low dial position AM, big powerhouse, cash flow positive, real estate optional to lease or purchase, staff in place. News, talk, sports. Asking $1.0M
The OP said the Salem building was for sale for $750K. So it's probably not Salem. Although it does sound like TheAnswer.
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