What was the actual valuation of each station in the K-LOVE purchase of WPLJ?

[Spareparts]

As an exercise, how would you break down the actual value of each of the five stations purchased with WPLJ for the aggregate price of $103,000,000 in February 2019?

WPLJ (95.5) New York
WYAY (106.7) Atlanta,
WRQX (107.3) Washington, DC,
KFFG (97.7) San Jose, CA
WZAT (102.1) Savannah, GA
WXTL (105.9) Syracuse, NY

 

[lanceventa]

As an exercise, how would you break down the actual value of each of the five stations purchased with WPLJ for the aggregate price of $103,000,000 in February 2019?

WPLJ (95.5) New York
WYAY (106.7) Atlanta,
WRQX (107.3) Washington, DC,
KFFG (97.7) San Jose, CA
WZAT (102.1) Savannah, GA
WXTL (105.9) Syracuse, NY

In talking with brokers and people at the groups involved, WPLJ likely represented 40-45% of the purchase. WRQX 20-25%, WYAY 15-20%, KFFG 10-15%, and WZAT and WXTL the remainder.

 

[Spareparts]

Thanks! Much easier than trying to figure it out from the cume numbers

 

[lanceventa]

Thanks! Much easier than trying to figure it out from the cume numbers

The cume would not have been anywhere near the correct formula. EMF purchases stations based on a formula centered on population counts of a signal. They also paid a premium for New York and likely Washington based on amount of stations that come available in those markets

 

[Tibbs4]

Fun question. I don't think they overpaid at all for these stations, especially if you consider 2019 "info." With the changes in radio since then, I would say in today's world it would still be worth a minimum of $85-8Mish, but well over that in reality. Would be fun to break down each stations value in 2019 vs. today. It would also be interesting to see what cash these stations generate each year and see what the multiples would be. Look at what Cumulus got out of the deal. $$$, no interest on the debt, no more debt on the debt and heavy overhead. Another fun thing to consider here are actual expenses (minimal since the sell compared to previously.) Did they get any property in the sale? I never paid attention to that part, but recall that they did. Seems like minimal rent, electricity, insurance and tower leases, engineer fees are about all that is in the budget today. No debt on these stations, right? I apologize. I just don't study EMFs master plan all that much. Solid concept, though.

 

[CTListener]

I assume the Atlanta signal was worth less than the Washington signal because EMF would be going up against a very successful, well-established CCM station in Atlanta while the DC area would be pretty much virgin territory. Correct? And is EMF content to be a perennial also-ran to The Fish or is its plan to pull listeners away from the competitor? Can that even be done with a piped-in, one-size-fits-all format and playlist?

 

[luperm]

I assume the Atlanta signal was worth less than the Washington signal because EMF would be going up against a very successful, well-established CCM station in Atlanta while the DC area would be pretty much virgin territory. Correct? And is EMF content to be a perennial also-ran to The Fish or is its plan to pull listeners away from the competitor? Can that even be done with a piped-in, one-size-fits-all format and playlist?

K-Love in Washington has a Christian AC competitor in WGTS, which performs well in the beauty numbers. I don’t think the presence of a competitor is a deterrent to EMF.

 

[PTBoardOp94]

I assume the Atlanta signal was worth less than the Washington signal because EMF would be going up against a very successful, well-established CCM station in Atlanta

No, it was because WYAY is not a full-market signal.

 

[101tm]

Not sure if you meant to leave it out or not, but there’s also WCKL 97.9 in Chicago which was included in that same transaction.

 

[Weiserguy]

No, it was because WYAY is not a full-market signal.

Neither is (was) KFFG. It's a class A, licensed to Los Altos CA, and can't even cover all of the South Bay Area without an array of translators. I wouldn't peg its relative value as more than 10% of the deal, and even that's only because of the market it covers (Silicon Valley). For a couple of decades before the acquisition, it was nothing more than a glorified repeater/translator for KFOG out of San Francisco.

 

[ksradiogeek]

Not sure if you meant to leave it out or not, but there’s also WCKL 97.9 in Chicago which was included in that same transaction.

Not with ‘PLJ and the 5 others - ‘LUP was sold the year prior.

 

[secondchoice]

No, it was because WYAY is not a full-market signal.

If you look at the demographics of 106.7’s coverage’s zip codes verses 100.5’s (the other mismanaged Cumulus station at the time) coverage you will find a lot more white and more importantly rich folks which would be K-Loves P1 if they were a commercial operation. I doubt there are many K-Love listeners who live south of Interstate 20 inside the 285 perimeter in Atlanta. Interest fact for the out of town folks that do follow Atlanta radio much, 106.7 and 104.7 use the same tower and antenna. K-Love has 77KW, the Fish has 24 KW.