Audacy-Owned "Radio.com" up for auction

[Bill Yuhnke]

Web domain registrar GoDaddy is running an auction for the domain name Radio.com, which is currently owned by Audacy.

The auction, first spotted on Thursday by Radio Ink‘s sister publication Radio & Television Business Report, is asking for a minimum bid of $2.5 million for the domain name, though it will almost certainly command a higher sale price.

 

[SirRoxalot]

That's not surprising. They could use the influx of cash and they've rebranded everything under the Audacy umbrella anyway. The $2.5-million starting point might be what they paid for it when the original radio.com owners sold it.

 

[davideduardo]

That's not surprising. They could use the influx of cash and they've rebranded everything under the Audacy umbrella anyway. The $2.5-million starting point might be what they paid for it when the original radio.com owners sold it.

What possible value does a domain that is called "radio" have today when traditional radio is in decline and stations are trying to transition to new media?

Anyway, $2.5 million is petty cash for Audacy. It will not help their debt issues at all.

 

[SirRoxalot]

What possible value does a domain that is called "radio" have today when traditional radio is in decline and stations are trying to transition to new media?

Anyway, $2.5 million is petty cash for Audacy. It will not help their debt issues at all.

It's better for stockholders to see than a $2.5-million write-off. At least it shows they're trying. Whether there are buyers out there who value the domain name that highly is another question. It could have that much value in areas where radio is still a primary source of news and entertainment. It might actually be a good fit for Townsquare and their strategy of becoming the primary local media is a lot of small markets. There are other smaller groups out there who might be willing to pay for the name.

 

[Roch989]

It’s just David Field, who is panicking to keep his job.

You own a radio company, and that’s where the revenue comes from. So what do you do? Ban the term “radio.”

Did the stock come roaring back from 23 cents a share with that announcement? The 6-month trend has the stock dropping by 78%.

 

[Roch989]

It's better for stockholders to see than a $2.5-million write-off. At least it shows they're trying. Whether there are buyers out there who value the domain name that highly is another question. It could have that much value in areas where radio is still a primary source of news and entertainment. It might actually be a good fit for Townsquare and their strategy of becoming the primary local media is a lot of small markets. There are other smaller groups out there who might be willing to pay for the name.

They’d do a more convincing job trying by selling poorly performing clusters and focus on market sizes they know how to run. They overpaid for and destroyed the former CBS stations, which performed better than their own.

That trying won’t even show up on statement as a rounding error!

 

[davideduardo]

They’d do a more convincing job trying by selling poorly performing clusters and focus on market sizes they know how to run.

The company is profitable on operations. It's problem is, exclusively, debt service.

They overpaid for and destroyed the former CBS stations, which performed better than their own.

Yes, they overpaid. But the sea anchor in that deal was the CBS AMs which were all old-leaning in formats and expensive to operate.

 

[Roch989]

The company is profitable on operations. It's problem is, exclusively, debt service.

Yes, they overpaid. But the sea anchor in that deal was the CBS AMs which were all old-leaning in formats and expensive to operate.

Agree with all, but should look at each market and each station. Fact is those “old-leaning” CBS stations in many of the markets were top billers, if not in the top five. In many cases also delivered more BCF cashflow than their music jukebox clustermates, just not margins.

Audacy fired nearly every experienced CBS manager with a solid track record and simply made the DOS position a dual role.

Audacy overpaid, had no experience running major market stations, went in and fired most anyone who was making more than the Entercom people in the same roles.

The former CBS stations were treated with contempt, and they rapidly declined. The CBS stations were performing better than their own stations.

The problem is debt service, but it most certainly isn’t the only problem.

Take a look at station power ratios, trended, and you will see even more to this unfortunate story.

 

[davideduardo]

Agree with all, but should look at each market and each station. Fact is those “old-leaning” CBS stations in many of the markets were top billers, if not in the top five. In many cases also delivered more BCF cashflow than their music jukebox clustermates, just not margins.

Rule: never buy a station or any business at its peak. They had nowhere to go but down, and there were plenty of indications of that which due diligence would have revealed. Er, make that "should" instead of "would".

Audacy fired nearly every experienced CBS manager with a solid track record and simply made the DOS position a dual role.

And that is a successful practice today in many groups. The industry was changing and the type of single station or AM/FM combo manager of the past was an anachronism.

Audacy overpaid, had no experience running major market stations, went in and fired most anyone who was making more than the Entercom people in the same roles.

They had other major market stations... unless you think San Francisco was a small market. I interviewed with Mr. Field Senior back in the early 80's for the manager position of their station there.

The former CBS stations were treated with contempt, and they rapidly declined. The CBS stations were performing better than their own stations.

But they had expenses that, with the decline in radio revenues (65% inflation adjusted decline between 2000 and 2020) could not be sustained. The 2008 recession, the smartphone and the PPM were a perfect storm for all companies.

The problem is debt service, but it most certainly isn’t the only problem.

The others are, actually, common to nearly every larger operator.

Take a look at station power ratios, trended, and you will see even more to this unfortunate story.

When the whole industry is off by 2/3 in 20 years, you can't single out one group.

 

[SirRoxalot]

We've seen this story before with Citadel/Cumulus and iHeart. They'll shed a good chunk of their debt in bankruptcy. The Field family will likely see the same fate as the Dickey family. One of those old CBS honchos will make big money to come in as the "fixer." The stockholders have already taken it in the shorts. Next come the smaller investors and the vendors.

 

[kevtronics]

Maybe they'll use the proceeds to buy odyssey.com, to catch all the people who don't realize that some Millennial "corporate synergy consultant" thought it would be a great idea for a company which owns radio stations to make up a name that sounds exactly like an unrelated existing word.

 

[Kelly A]

It's better for stockholders to see than a $2.5-million write-off.

The only way "write-off's" are useful to a business, is if they're already profitable.

 

[Kelly A]

Agree with all, but should look at each market and each station. Fact is those “old-leaning” CBS stations in many of the markets were top billers, if not in the top five.

And what year(s) was that? Where were they when Entercom picked them up?

In many cases also delivered more BCF cashflow than their music jukebox clustermates, just not margins.

BCF is derived within a regional or corporate-wide, not individual stations or formats.

Audacy fired nearly every experienced CBS manager with a solid track record and simply made the DOS position a dual role.

Probably with a lot of tenure and equally high salaries. It's not unusual for management to be replaced by the acquiring/merger management team.

Audacy overpaid, had no experience running major market stations,

Not sure where you came to that conclusion. Entercom was founded in Bala Cynwyd PA, with their original stations serving Philadelphia. Last I checked, Philly is a large market. Also, they owned stations in Seattle, Portland, Kansas City, New Orleans, Memphis, and New York.

went in and fired most anyone who was making more than the Entercom people in the same roles.

See my second response.

The former CBS stations were treated with contempt, and they rapidly declined. The CBS stations were performing better than their own stations.

I think it's safe to say; in the past had performed well. As David mentioned; nobody buys stations or groups at the top of their game.

The problem is debt service, but it most certainly isn’t the only problem.

No, the problem is the advertising environment and competition has changed, and during the 2008 recession, all station values plummeted, I would argue that Audacy was too late to the pure-play-radio-biz, to streaming game. Other groups equally heavy with debt were way ahead of the streaming game as compared with Audacy.

Take a look at station power ratios, trended, and you will see even more to this unfortunate story.

Again from when? This isn't 1996 anymore. The world changed dramatically fifteen years ago.

 

[Larry]

Entercom was founded in Bala Cynwyd PA, with their original stations serving Philadelphia. Last I checked, Philly is a large market.

At the time of the CBS purchase Entercom wasn’t operating any stations in Philadelphia.

 

[Kelly A]

At the time of the CBS purchase Entercom wasn’t operating any stations in Philadelphia.

The point was; to say Entercom/Audacy wasn't in larger markets prior to the purchase of CBS Radio, is inaccurate.

 

[TheBigA]

Audacy overpaid, had no experience running major market stations, went in and fired most anyone who was making more than the Entercom people in the same roles.

Wait a minute! You don't think San Francisco, Seattle, Atlanta, or Boston are major market stations? Entercom owned major market stations before buying CBS Radio. They also ran those stations very profitably with little or no national syndication, and mostly live & local staffs. The deal with CBS was seen as a very positive thing, and the way it was done was not viewed as "overpaying." It was mainly a stock deal, with CBS gaining shares in Entercom, which was trading at a very high level at the time.

This particular situation with the Audacy stock has nothing to do with the CBS purchase. Part of it has to do with the debt that's coming due, and some post-covid issues that hurt some of its business. In my opinion, they haven't managed their streaming and podcasting businesses very well. I think if you look at other radio companies, they're all having a tough time with stock price.

 

[SirRoxalot]

The only way "write-off's" are useful to a business, is if they're already profitable.

OK, call it a "write-down." A loss is a loss.

 

[Kelly A]

OK, call it a "write-down." A loss is a loss.

From Investopedia.com:

"Write-Downs​

A write-down is recorded as an adjustment to the existing inventory. A credit is applied to the equipment or whatever the inventory item is, and the total value is reduced accordingly.

A write-down can instead be reported as a cost of goods sold (COGS) if it's small. Otherwise, it must be listed as a line item on the income statement, affording lenders and investors an opportunity to consider the impact of devalued assets. Large write-downs actually reduce owners' or stockholders' equity."


"Write-Offs

Writing an asset off in business is the same as claiming that it no longer serves a purpose and has no future value. You're effectively telling the IRS that the value of the asset is now zero.

Old equipment can be written off even if it still has some potential functionality. For example, a company might upgrade its machines or purchase brand-new computers. The equipment being replaced can be written off in this case. Its economic value would be listed at $0."

 

[TheBigA]

I've put domain names up for auction on GoDaddy, and there is no guarantee you'll get your asking price. That's what an auction is. I don't know how they came up with that price, because most domains with marketable names are typically priced in the thousands, not millions. So my sense is they're just looking to see what kind of interest there is. In the meantime, Radio.com forwards to Audacy.