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5 years and 5 million dollars

N

NHRadio

According to the Fybush.com archives it was 5 years ago that Nassau paid 5 million (!!) dollars for WLNH and WEMJ Laconia NH and what is now WWHQ Meredith NH.
Even taking the go-go economy at the time into account that seems like a LOT of money. Based on admittedly 3rd and 4th hand info, I come up with about 1.5 million at 6 times cash flow.
Anyone have an idea of what that trio would be worth now? If they've overpaid that much for their other sticks they must be literally choking on the debt.
 
NHRadio,

What did your sources use for their definition of "cash flow"? EBITDA plus officers' excess? Or some other formula?

Five years ago, it was not uncommon for even small, unrated markets to command more than 10 times cash flow, using the above criteria.

Ray
 
Ray,
From what I've been told the numbers are EBITDA since Nassau took over.
Assuming a 10 times multiple it sounds hard to believe (at least to me) that those 3 stations had EBITDA of half a million 5 years ago.
From what little I know of these things, don't those numbers leave out Capex and some other spending?
How much would you need to bill to hit that target? A million and a half? More?
Why do so many radio stations use EBITDA and other metrics that aren't GAAP? Anyone?....Anyone?....Bueller?
 
NHRadio,

It's conceivable, using EBITDA and officers' excess as a yardstick, that those three stations collectively had $500k cash flow back then.

You're right. Those numbers do leave out capital expenditures, as they are generally deemed to be discretionary, rather than actual expenses needed to run the operation.

I'm not familiar enough with the Laconia market to know what they'd need to bill to hit that particular cash flow number. That's a hard one to call, especially in smaller markets. But your $1.5 million guess is a good one.

And to answer your last question, the reason that radio stations use EBITDA that aren't generally accepted accounting principles: simply because that's what the buyers use to buy with. And the customer is always right, right? (smile)

Ray
 
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