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A main reason for AM stations signing off for good?

J

johnbasalla

What percentage of AM radio stations shut down for ever because of some catastrophic technical issue(s) occur that are too costly to repair?
Either the owner doesn't have the money, period or the ROI is insufficient to warrant the cost of the repair(s).

In Northeastern Ohio, I'm guessing that these may the reason(s) that the plug was pulled on day timers WKNT 1520 AM in Kent and WWGK (formerly) WABQ) 1540 in Cleveland.
 
I can't cite a count because I don't think there is one. Stations turning in their license just tell the FCC "no more".

The reasons may be a variety of things:
  • Owner died, station was a one-man show and nobody in family wants it and it can't be sold.
  • Land is worth more than the station and moving would be too costly / hard to do due to zoning.
  • Land owner terminates lease.
  • Station is not profitable and owner can't find a buyer.
  • Catastrophic failure of equipment / fire at studios and not fully covered. Cost to great vs. potential profit.
  • Battle of partners; station goes silent and nobody manages to file necessary papers.
  • FCC fine / short term renewal or other Commission issues make it to uncertain and owner just wants to get out.
 
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johnbasalla said:
What percentage of AM radio stations shut down for ever because of some catastrophic technical issue(s) occur that are too costly to repair?
Either the owner doesn't have the money, period or the ROI is insufficient to warrant the cost of the repair(s).
Click to expand...
I don't think any hard statistics you're looking for exist. Anything here would be considered anecdotal, but I suspect giving up and turning in a license comes down to a handful of reasons in any or all combinations:

1. The transmission site land lease is lost with no cost comparative property available in the area, with the capital cost of duplexing with other station, plus rent making keeping the station alive unsustainable.
2. The owned transmission site property value exceeds the business value of the AM station.
3. Local advertising revenue support has diminished to the point where maintaining the station is unsustainable.
4. Natural disaster from fire or flood wreck facilities to the point where insurance won't cover repair/replacement.
5. As was with one of my stations; the cost of a tower replacement was more than the station value.
6. For larger groups; trying to find a non-profit to donate the the AM station for a tax write-off came up empty.
 
Kelly A said:
6. For larger groups; trying to find a non-profit to donate the the AM station for a tax write-off came up empty.
Click to expand...
On this one most companies have written down "impaired assets" with extraordinary depreciation to the point that most bad AMs are valueless as a write-off.
 
johnbasalla said:
Either the owner doesn't have the money, period or the ROI is insufficient to warrant the cost of the repair(s).
Click to expand...
You CANNOT narrow that just to technical issues. Most of these stations are signing off because they simply are not profitable anymore and the land underneath them is where the value is.
 
DavidEduardo said:
On this one most companies have written down "impaired assets" with extraordinary depreciation to the point that most bad AMs are valueless as a write-off.
Click to expand...
Most groups would prefer the 'good will' aspects of donating the station to a minority, or non-profit. Problem is; once most of the aforementioned groups do their due diligence on what it takes from a cost perspective to run a radio station, along with exporation of upsides in doing so, they take a pass.
 
Radio advertising has an element of "faith" to it. If a businessperson buys $1000 worth of ads on a local AM station, will he get more than $1000 worth of new business? It's not easy to find out. You can't ask everyone, "How did you hear about us?" They may not even remember. Or maybe it's a combination of several advertising sources.

But the fact is, an AM-only station high up the dial isn't likely to have that many listeners, no matter how good the programming is. Luckily, in many places, AM stations can try to acquire an FM translator. Daytimers with a translator can stay on the air on FM at all hours, weak stations can be heard in FM stereo. And even some of the 50,000-watt Class A stations like KDKA, WLW, KOA, WLAC and WBAL now have translators.

Maybe it's a "glass half empty, glass half full" scenario. I'm surprised that only a handful of AM stations turn in their licenses each year, maybe about 20 - 25? Meanwhile there are more than 2,750 AM stations still on the air. So many weak stations high up the dial and daytimers are managing to hang on!
 
Gregg. said:
Radio advertising has an element of "faith" to it. If a businessperson buys $1000 worth of ads on a local AM station, will he get more than $1000 worth of new business? It's not easy to find out.
Click to expand...
The term is called 'conversion'. Converting every dollar spent on advertising to more than one dollar in sales. Most businesses are looking for 2:1 or 3:1 conversion.
Gregg. said:
But the fact is, an AM-only station high up the dial isn't likely to have that many listeners, no matter how good the programming is. Luckily, in many places, AM stations can try to acquire an FM translator.
Click to expand...
That window has already closed.
Gregg. said:
Maybe it's a "glass half empty, glass half full" scenario. I'm surprised that only a handful of AM stations turn in their licenses each year, maybe about 20 - 25? Meanwhile there are more than 2,750 AM stations still on the air. So many weak stations high up the dial and daytimers are managing to hang on!
Click to expand...
I suspect the numbers will be increasing year over year as the remaining 60+ AM listening audience literally dies off.
 
Gregg. said:
Maybe it's a "glass half empty, glass half full" scenario. I'm surprised that only a handful of AM stations turn in their licenses each year, maybe about 20 - 25? Meanwhile there are more than 2,750 AM stations still on the air. So many weak stations high up the dial and daytimers are managing to hang on!
Click to expand...

FCC's LMS shows 4,351 AM stations licensed and on the air plus another 92 licensed and silent.
 
In my case, the station I was managing, a 25kw daytimer in Houston, we went from $36,000 a month to $25,000 a month to lease. In the final 3 years new ownership rejected everyone I took to them and my paycheck went to half then to zero. When I left, they went dark. They eventually sold for $130,000 less than the upgrade and land cost them about 6 years prior. They're now owned by a Catholic ministry doing Spanish Language programming.
 
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