Beasley Closes on WDMK

[umfan]

https://news.****************/articles/b15987/Beasley-Broadcast-Group-Closes-on-WDMK-Detroit-for-$135M



$13.5M seems like a fairly handsome price for the station. I have to think that's 10x annual billings at least. The dynamic is also interesting since Beasley revived 105.1 by going to classic soul which, at least to some degree, likely pulled listeners from WDMK. Some significant format tweaks have to be in the works. Time will tell if this acquisition made sense, but I'm not sure it does at this price.

 

[davideduardo]

$13.5M seems like a fairly handsome price for the station. I have to think that's 10x annual billings at least.s

It's about 2.5 times gross annual billings.

On the other hand, it seems like it might be right within the fairly common 5 to 7 times broadcast cash flow range FMs are going for today.

The dynamic is also interesting since Beasley revived 105.1 by going to classic soul which, at least to some degree, likely pulled listeners from WDMK. Some significant format tweaks have to be in the works. Time will tell if this acquisition made sense, but I'm not sure it does at this price.

The station has been in the same share range for the last three years. It also comes with, IIRC, three translators to improve coverage in areas where the signal is more marginal.

 

[umfan]

I'm rather shocked that WDMK bills in the $4-$5M range. $13.5M can be recovered if that rate can be maintained.

It does have three translators, one of which carries the Praise Network, but I question the value they add. Now one did crack decent ratings for a time, but none of them cover very well, which should not be a surprise. Praise Network may have retained some long time local advertisers once the format was bumped from the main station but over time, even those loyal ad buyers will see they are getting less for their dollar.

 

[secondchoice]

It's about 2.5 times gross annual billings.

On the other hand, it seems like it might be right within the fairly common 5 to 7 times broadcast cash flow range FMs are going for today.

Is that "positive" cash flow after variable expenses? (payroll, commissions, utilities and rents etc.)

 

[davideduardo]

Is that "positive" cash flow after variable expenses? (payroll, commissions, utilities and rents etc.)

Broadcasters (and most businesses) generally consider "cash flow" to be the amount of earnings after operating expenses but before interest, tax, depreciation and amortization: EBITDA. That is pretty standard.

You can look up EBITDA online and get hundreds of similar definitions since the initials mean "Earnings before interest, tax, depreciation and amortization".

 

[secondchoice]

Broadcasters (and most businesses) generally consider "cash flow" to be the amount of earnings after operating expenses but before interest, tax, depreciation and amortization: EBITDA. That is pretty standard.

You can look up EBITDA online and get hundreds of similar definitions since the initials mean "Earnings before interest, tax, depreciation and amortization".

I am familiar EBITADA . Just not trying to get too technical for the average reader.

BTW Are AM's with FM translators priced like FM's?

 

[MarkW]

Re:

It does have three translators, one of which carries the Praise Network...

All three of the translators carry the Praise Network. I can pick up all three in the car (93.5, 98.3 and 99.9), and two of the three can be heard well indoors at my location.

105.1 plays throwback hip hop and R&B, which sounds nothing at all like Classic Soul and has a median song age about 30 years newer. In fact, there is no Classic Soul station in Detroit at the moment. Even the Urban AC stations in town play little in the way of Classic Soul these days. (Sure would be nice to see 107.5 flip to Classic Soul!)

As was widely reported last summer, Urban One's syndicated AM & PM drive shows are must-run shows that Beasley must continue to air on 105.9 for an unspecified length of time. Depending on the number of local avails during those two shows, the $13.5 million price tag may or may not be a good deal.

If Beasley can avoid losing money on the translator signals (93.5, 98.3, 99.9), they should be happy. So long as Beasley is burdened with clearing Praise Network programming on a 24/7 basis, they'll never earn any decent positive cash flow from those signals!! Cannot help but wonder how much Beasley is having to pay in tower rent - unless Urban One is reimbursing them for that expense. There is also a ridiculous amount of overlap between the 60 dBu (and 70 dBu) contours of 93.5 & 98.3.

As for 105.9 Kiss - they've been a middle of the pack biller among Detroit's FM outlets for many years. That was the only Urban One FM station in town with decent billing. Hot 107.5's billing is garbage.