KFMB AM & FM sell for a shockingly low price!!!

[MarkW]

As if further proof was needed that AM/FM radio is a slowly dying industry, here it is:
AM 760 & FM 100.7 just sold for the shockingly cheap price of $5 million *combined*!!!

True, the buyer (Local Media, the company who already operates 91X, Magic 92.5, and Z90.3) is required to pay about $100k a year in tower rent for a minimum of 10 years and will not be permitted to use the "KFMB" call sign (Tegna wants exclusivity over those call letters or perhaps is looking to sell licensing rights to someone else), but for BOTH of those stations to go for such a ridiculously cheap price is truly stunning.

Recall that 102.1 KPRI sold for $12 million just four years ago!

 

[TheBigA]

As if further proof was needed that AM/FM radio is a slowly dying industry, here it is:

The other side of that POV is that radio stations were overpriced for a long time, driven by investment companies and speculators. That's not the case here. Those who criticized the corporate buyout of radio as killing the industry can't use the same claim now that station prices have returned to reality. For years, critics hoped the bubble would burst so "real broadcasters" could return to the industry and buy radio stations at fire sale prices to bring radio back to what it once was. Perhaps that's the situation here.

 

[Groove1670]

When you factor in the tower rent and other terms we might not know about, this is a fair deal, and now value has come back down to Earth. The other thing to consider, no other large group probably offered to take it.

 

[MarkW]

A couple thoughts:
- TEGNA obviously wanted to unload these stations sooner rather than later. By selling to Local Media (as opposed to say, iHeart), FCC approval risk lessens. My guess is Local Media can move very quickly on the transaction (i.e. no financing contingencies).
- Did TEGNA effectively toss the AM station to Local Media for free? Certainly, the FM station by itself is easily worth $5 million on a fair market basis. Wouldn't shock me if Local Media initially expressed interest in only acquiring the FM station. From a cash flow standpoint, AM 760 must really stink!

Seems radio stations (on the FM band) are trading for prices reminiscent of late 1980's levels.

 

[david]

Nice to see these two stations, each with a legacy of excellence in prior incarnations, returning to local ownership, and one which is committed to broad market formats. KFMB-AM, the station this thread surmises may be a throw-in, possesses a strong signal, with coverage that could be ripe for a more compelling talk format, or a return to more sports programming (as was the case for the many years 760 KFMB was the flagship for the Padres). Will be sad to see these legacy calls vacated.

 

[TheBigA]

Seems radio stations (on the FM band) are trading for prices reminiscent of late 1980's levels.

Radio stations are like anything. The price is based on market value. Like buying fresh seafood or steak at an expensive restaurant. The price isn't posted. Now the value isn't in the signal, but rather the real estate. No real estate? The station goes cheap. In the old days, a radio station came with tower land. Now, that's been sold off, and the station is leasing it back. When Cumulus bought ABC, it picked up lots of valuable real estate that it sold for serious money.

 

[michael hagerty]

Radio stations are like anything. The price is based on market value. Like buying fresh seafood or steak at an expensive restaurant. The price isn't posted. Now the value isn't in the signal, but rather the real estate. No real estate? The station goes cheap. In the old days, a radio station came with tower land. Now, that's been sold off, and the station is leasing it back. When Cumulus bought ABC, it picked up lots of valuable real estate that it sold for serious money.

And this price may be purely for the licenses. As Big A points out, no real estate, no intellectual property---apart from transmitters, there may not even be equipment involved. Might be easier for Local just to build all-new studios or re-purpose existing ones in their current building.

 

[Kent]

While this still seems like a fire sale price to me, I'm guessing at least part of it is explained by mandate of an almost immediate change of the branding. When you have to ditch decades of heritage, the value of the properties goes way down.

 

[davideduardo]

While this still seems like a fire sale price to me, I'm guessing at least part of it is explained by mandate of an almost immediate change of the branding. When you have to ditch decades of heritage, the value of the properties goes way down.

The FM, the only thing of value, has never depended on the calls. So no loss there.

The AM can easily get "similar" call letters and keep on with what they are doing... just like, for example, KOB in Albuquerque which became KKOB.

 

[MarkW]

Does 100.7 FM even use the call letters in its branding? I thought they discontinued that shortly after Tegna acquired the station.

My guess is the statement that no intellectual property is involved is inaccurate. Right of use of the call letters is not being conveyed; there are numerous other types of intellectual property involved in commercial broadcasting. For example, I'm guessing any & all air talent and programming contracts are included in the sale.

I suspect 100.7 FM & AM 760 sold for no greater than a 5x cash flow multiple; that's pretty weak even in the current environment.

Heck, a back-of-the-envelope "stick value" calculation (i.e. license only + assignment of TX site lease) says 100.7 by itself should be able to command $5.6 million on a bad day.

(Oops; Mr. Eduardo and I posted at the same time. Mr. Eduardo, what are your thoughts regarding the sale price?)

 

[TheBigA]

I will also say a lot of times my asking price for something is based on what I think I can get from the customer. When I have some banker from New York who's never spent 5 minutes in San Diego coming to me with deep pockets, my price will be a bit different than a local guy who's just trying to serve his community. I can tell the difference, and that's how I run my business.

 

[michael hagerty]

Does 100.7 FM even use the call letters in its branding? I thought they discontinued that shortly after Tegna acquired the station.

My guess is the statement that no intellectual property is involved is inaccurate. Right of use of the call letters is not being conveyed; there are numerous other types of intellectual property involved in commercial broadcasting. For example, I'm guessing any & all air talent and programming contracts are included in the sale.

I suspect 100.7 FM & AM 760 sold for no greater than a 5x cash flow multiple; that's pretty weak even in the current environment.

Heck, a back-of-the-envelope "stick value" calculation (i.e. license only + assignment of TX site lease) says 100.7 by itself should be able to command $5.6 million on a bad day.

(Oops; Mr. Eduardo and I posted at the same time. Mr. Eduardo, what are your thoughts regarding the sale price?)

Yeah, in the last year or so, KFMB-FM has been using the 100.7 San Diego branding, after a couple of years of trying "KFM-BFM". Before that was "Jack", before that was "Star", and before that B-100. So, apart from a legal ID, the FM hasn't used "KFMB" since March of 1975.

The AM, on the other hand is "AM 760 KFMB". Similar calls? Heck, you could be cute and go for KAMB ("AM" replacing "FM"). Right now, they belong to a non-comm Contemporary Christian FM in Merced. They'd probably do a deal for joint use.

We'll see if any intellectual property (including talent) carries over. I haven't seen anything about that. And neither station's setting the world on fire at the moment. In the December book, the FM has a 2.3 and the AM a 2.1 (6+).

 

[e-dawg]

I wonder if they are also selling WBNS 1460 WBNS-FM 97.1 in Columbus OH since Tenga brought the station from Dispatch Broadcast Group early this year which they owned CBS affiliate WBNS-TV 10.

 

[semoochie]

Yeah, in the last year or so, KFMB-FM has been using the 100.7 San Diego branding, after a couple of years of trying "KFM-BFM". Before that was "Jack", before that was "Star", and before that B-100. So, apart from a legal ID, the FM hasn't used "KFMB" since March of 1975.

The AM, on the other hand is "AM 760 KFMB". Similar calls? Heck, you could be cute and go for KAMB ("AM" replacing "FM"). Right now, they belong to a non-comm Contemporary Christian FM in Merced. They'd probably do a deal for joint use.

We'll see if any intellectual property (including talent) carries over. I haven't seen anything about that. And neither station's setting the world on fire at the moment. In the December book, the FM has a 2.3 and the AM a 2.1 (6+).

If they're saying, "KFM-BFM", how is that different from "KFMB-FM"?

 

[davideduardo]

If they're saying, "KFM-BFM", how is that different from "KFMB-FM"?

They have not used that for several years. Remember, this is a rather low rated FM station, so it has no useful heritage.

 

[johndavis]

The AM, on the other hand is "AM 760 KFMB". Similar calls? Heck, you could be cute and go for KAMB ("AM" replacing "FM"). Right now, they belong to a non-comm Contemporary Christian FM in Merced. They'd probably do a deal for joint use.

We'll see if any intellectual property (including talent) carries over. I haven't seen anything about that. And neither station's setting the world on fire at the moment. In the December book, the FM has a 2.3 and the AM a 2.1 (6+).

It's slow here in the office, so I read the deal yesterday.

"Except as provided in this Section 6.5, the Seller is not conveying ownership
rights or granting the Buyer a license to use any of the Retained Names and Marks and, after the Closing,
the Buyer shall not and shall not permit any of its Affiliates to use in any manner the Retained Names and
Marks or any word that is similar in sound or appearance to such names or marks. "

Time to rebrand.

 

[michael hagerty]

If they're saying, "KFM-BFM", how is that different from "KFMB-FM"?

Semoochie:

It really isn't...except for the technicality of saying "KFMB" all at once.

There's some history here.

The legend goes that when Bobby Rich took over as PD of KFMB-FM, then an automated Beautiful Music station. to take it Top 40 in 1975, he wanted to change the call letters, but was told no.

He then had a conversation with Charlie Van Dyke, who was doing the imaging for KFMB-AM, about the challenge of making the legal ID sound different from just "KFMB-FM". Van Dyke suggested that the ID, which would be done live by the jocks, have the call letters read as "KFM......BFM", with the emphasis on the "K" and the "B"...so:

"KAY-eff-emm....BEE-eff-emm, San Diego! It's (time) with (jock) as B-100 boogies on!"

If you want to hear what the inspired madness of B-100 sounded like, here's a link to a composite of its first anniversary in 1976: https://youtu.be/KFVNHbI6FO0?t=27

Well, people still remembered and talked about that---and so, when "Jack" finished its 13-year run on 100.7 three years ago (after about 15 years as "Star 100.7), they decided to try branding the station as KFM-BFM. Here's a link to audio of the format change, which contains the logo artwork on the page:

https://formatchange.com/jack-becomes-100-7-kfm-bfm/

But too much time had gone by---it really didn't mean anything to the target demo. So now they're "100.7 San Diego".

It's all technicalities, but the last time that 100.7 used KFMB-FM as anything other than a legal ID without doing something cute to the call letters in terms of phrasing, was March of 1975. As David rightly points out, the call letters have no real value for the station.

I think the AM is trickier---since it has never had a station name--it has always been identified by call letters and dial position---for 78 years. And it benefits from the association with KFMB-TV. But we don't know what Local Media plans to do with the frequency, so it may not matter at all.

But, for history geeks, longtime Southern Californians and the like, it's a set of calls that began on radio that won't exist on radio anymore. It's worth noting, but maybe not mourning.

 

[DrAkbar]

KFM-BAM is a 5kw station with 50kw at night. Weird. Midwest TV put in a modification to drop to 10kw at night, but yanked the app as they decided to sell the station as-is. The xmttr site is more than interesting with a divided four lane highway running right through it. Bet TEGNA kept the land with eyes on selling it for big $$ in the future.

 

[semoochie]

Semoochie:

It really isn't...except for the technicality of saying "KFMB" all at once.

There's some history here.

The legend goes that when Bobby Rich took over as PD of KFMB-FM, then an automated Beautiful Music station. to take it Top 40 in 1975, he wanted to change the call letters, but was told no.

He then had a conversation with Charlie Van Dyke, who was doing the imaging for KFMB-AM, about the challenge of making the legal ID sound different from just "KFMB-FM". Van Dyke suggested that the ID, which would be done live by the jocks, have the call letters read as "KFM......BFM", with the emphasis on the "K" and the "B"...so:

"KAY-eff-emm....BEE-eff-emm, San Diego! It's (time) with (jock) as B-100 boogies on!"

If you want to hear what the inspired madness of B-100 sounded like, here's a link to a composite of its first anniversary in 1976: https://youtu.be/KFVNHbI6FO0?t=27

Well, people still remembered and talked about that---and so, when "Jack" finished its 13-year run on 100.7 three years ago (after about 15 years as "Star 100.7), they decided to try branding the station as KFM-BFM. Here's a link to audio of the format change, which contains the logo artwork on the page:

https://formatchange.com/jack-becomes-100-7-kfm-bfm/

But too much time had gone by---it really didn't mean anything to the target demo. So now they're "100.7 San Diego".

It's all technicalities, but the last time that 100.7 used KFMB-FM as anything other than a legal ID without doing something cute to the call letters in terms of phrasing, was March of 1975. As David rightly points out, the call letters have no real value for the station.

I think the AM is trickier---since it has never had a station name--it has always been identified by call letters and dial position---for 78 years. And it benefits from the association with KFMB-TV. But we don't know what Local Media plans to do with the frequency, so it may not matter at all.

But, for history geeks, longtime Southern Californians and the like, it's a set of calls that began on radio that won't exist on radio anymore. It's worth noting, but maybe not mourning.

Thank you, Michael. I was confused about saying the calls hadn't been used since 1975 and then turning around in the next breath and saying they had, just with a different emphasis. Is KFMB(AM) one of those stations that was part of the first breakdown of the clears, protecting WJR? I realize the station is much older than that but thought they might have moved to 760 at that time.

 

[michael hagerty]

Thank you, Michael. I was confused about saying the calls hadn't been used since 1975 and then turning around in the next breath and saying they had, just with a different emphasis. Is KFMB(AM) one of those stations that was part of the first breakdown of the clears, protecting WJR? I realize the station is much older than that but thought they might have moved to 760 at that time.

They moved from 540 to 760 in 1965, to comply with a treaty with Mexico that made 540 a clear in that country.