So you're telling me you saw both of those things coming in 1996? One guy who didn't see either of those things coming was Mel Karmazin. He was the original Zen Master, according to Howard Stern. He masterminded the combination of Infinity Broadcasting, CBS, and Westinghouse, and managed to keep all three from bankruptcy. While everyone keeps bringing up the two bastard children, no one mentions Karmazin. Around 1996, he put out a memo around the company forbidding the creation of web sites or the placing of radio content online. He said it took the audience away from the radio stations. When he and the Redstones ran into each other, he picked himself up and went over to Sirius, where he continued his views against streaming content online. But before he left broadcasting, he found a way buy stations without going broke. He wasn't the only one.
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Bad decisions about buying good stations
- Thread starter Oldbloodandguts
- Start date
So you're telling me you saw both of those things coming in 1996? One guy who didn't see either of those things coming was Mel Karmazin. He was the original Zen Master, according to Howard Stern. He masterminded the combination of Infinity Broadcasting, CBS, and Westinghouse, and managed to keep all three from bankruptcy. While everyone keeps bringing up the two bastard children, no one mentions Karmazin. Around 1996, he put out a memo around the company forbidding the creation of web sites or the placing of radio content online. He said it took the audience away from the radio stations. When he and the Redstones ran into each other, he picked himself up and went over to Sirius, where he continued his views against streaming content online. But before he left broadcasting, he found a way buy stations without going broke. He wasn't the only one.
That's not bad management. It is a bad investment. Even Warren Buffet makes a few of those, but it all averages out.
Not exactly. I have had my share of great business purchases and a few rotten eggs. As a "buyer" I just would never fall for the multiples game or that "that's just what the station is worth." Mind you, I wasn't buying in the Top 100 market, so that would certainly be different. As a seller, well, obviously if someone was willing to pay a premium that included almost laughable multiples....SOLD. I think you have heard me speak of that a few times. I was very fortunate to be gifted some nice offers for something that I didn't value as worth what they were willing too pay. I never got even 10% of the businesses I considered buying. More like 3%, I am guessing. But, I still reflect and study all those attempts, even today. I am not sure I benefitted enough from my studies. I still screw up.
When I tried to buy stations back in the 80's and 90's, I looked at what the stations sold for in the years prior and gave it my best shot/offer. Some worked. Most did not. But, when the players in the market came on strong and had deep pockets. as deregulation and the urgency to buy every viable station heated up to the frenzy, few single owners could refuse the offer. Most, as you will recall, took the stock options and look where they ended up. Again, I just knew that IF I had paid those prices, I could not have been profitable and all the cuts in the world would not really have validated the purchase prices. There is always a downturn. Next year may be "that year." Many are predicting a 2008-ish eruption in 2020. I am not sure. But, I always have learned that you generally are best to remember that what you pay for something is the most important part of the equation. These guys were so eager that they became delusional with the belief that they could withstand practically anything. My sentence speaks for itself. Not many people were thinking beyond 1997 back in 1996. As for what Karmazin did was certainly perceptive.I have never heard that. Interesting point. He saw the internet as radio's competition. That meant that he saw it as something that would hurt radio. Or, and I am not sure, did he believe the internet was at that time not worth the time and effort? To be honest, my gut always told me that after AM went to FM, that eventually something would come along to challenge FM. Also, a bit off the subject, but for clarification, I also have brick and mortar businesses and while I have been able to grow business each year despite so many new buying options, it's not easy and the end will eventually come like old Main Streets. Something always takes something's place. Even if it's an empty shell of a building or a dark station. I would think anyone putting his or her own money on the line would at least have a few sleepless nights thinking about that before pulling the business trigger. Hopee the heck that made some sense. I am confused now.
When I tried to buy stations back in the 80's and 90's, I looked at what the stations sold for in the years prior and gave it my best shot/offer. Some worked. Most did not. But, when the players in the market came on strong and had deep pockets. as deregulation and the urgency to buy every viable station heated up to the frenzy, few single owners could refuse the offer. Most, as you will recall, took the stock options and look where they ended up. Again, I just knew that IF I had paid those prices, I could not have been profitable and all the cuts in the world would not really have validated the purchase prices. There is always a downturn. Next year may be "that year." Many are predicting a 2008-ish eruption in 2020. I am not sure. But, I always have learned that you generally are best to remember that what you pay for something is the most important part of the equation. These guys were so eager that they became delusional with the belief that they could withstand practically anything. My sentence speaks for itself. Not many people were thinking beyond 1997 back in 1996. As for what Karmazin did was certainly perceptive.I have never heard that. Interesting point. He saw the internet as radio's competition. That meant that he saw it as something that would hurt radio. Or, and I am not sure, did he believe the internet was at that time not worth the time and effort? To be honest, my gut always told me that after AM went to FM, that eventually something would come along to challenge FM. Also, a bit off the subject, but for clarification, I also have brick and mortar businesses and while I have been able to grow business each year despite so many new buying options, it's not easy and the end will eventually come like old Main Streets. Something always takes something's place. Even if it's an empty shell of a building or a dark station. I would think anyone putting his or her own money on the line would at least have a few sleepless nights thinking about that before pulling the business trigger. Hopee the heck that made some sense. I am confused now.
Both.
Perceptive. Obviously, he is and was extremely successful for a reason. I will readily admit that one of my many limitations is being able to see the future. I always tend to believe the best in people and that they will help everyone be successful. Sadly, as I get older, I can't believe I fell for my own thinking. As for Karmazin's thinking, it's interesting, BigA. Most people who contact me to either help their business, buy their business or find them a buyer, never step out of their own business to see what's really hurting them. Now, I spend a considerable amount of time watching my competition and trying to learn from their good moves and stay progressive.
A bit of advice came from a guy who owns a successful welding company which he bought about 25 years ago and made more successful than it was, largely through adapting and embracing advances in technology. Said he, "When I bought the business, one of the first things I considered was (1) how long would I hold it, (2) how much would I invest each year to make it successful, (3) how much would I gross and net, and (4) when it came time to sell, how much would I sell it for?" Some of these small operators are finding that nobody wants to buy their stations at the list price if at all.
Twenty five years and this guy still owns the business, employs 14 full time, pays his employees a salary that's substantially higher than the industry average + full benefits, and his employees, from the office manager to the job estimators to the torch grunts stay with him. People in his business know his work and he has a line of men and women (yeah women weld and they're damn good) who'd love to join his company. What's your exit strategy small town owner?
Twenty five years and this guy still owns the business, employs 14 full time, pays his employees a salary that's substantially higher than the industry average + full benefits, and his employees, from the office manager to the job estimators to the torch grunts stay with him. People in his business know his work and he has a line of men and women (yeah women weld and they're damn good) who'd love to join his company. What's your exit strategy small town owner?
Wasn't the original title of this thread "Layoffs at Entercom Buffalo?". Did the moderator change it because it veered off into the abyss?
Most AM stations are worthless. The real estate is worth more. Even many big FMs are available at fire sale prices.
It's interesting that CBS got out of Buffalo long before they exited Radio altogether. However, they still seem to hold the power in the merge with Entercom...
Most AM stations are worthless. The real estate is worth more. Even many big FMs are available at fire sale prices.
It's interesting that CBS got out of Buffalo long before they exited Radio altogether. However, they still seem to hold the power in the merge with Entercom...
Yes. It went far off into a different field but with interesting posts.
I should have keep the layoff posts as a separate thread, but it was 4 AM and I was busy doing some server maintenance for my own site...
So it's too late to change it now? Maybe the whole thread should be moved. Or maybe RD should do away with market-specific boards as threads always devolve into non market-specific topics.
Y'know, this IS their patio, they just let you sit in one of the chairs...
In the grand scheme of things, doe sit REALLY frackin' matter?
In the grand scheme of things, doe sit REALLY frackin' matter?
This situation is exactly why we ask that you not change the subject matter of a thread.
It happens way too often.
It happens way too often.
K
kw1025
Guest
Local revenue is not 70 percent. It is much less.
K
kw1025
Guest
Most AMs are worthless? Seriously? Ask “ not buddy” about WECK, WBEN and WGR
The fact that a few AMs are still successful does not change the fact that most are worthless.
Start with daytimers. Very few are truly viable. Most sit on land worth more than the station.
Then take the thousand or two that are in rather small markets where retail has dried up due to the Big Box and Internet eCommerce effects, not leaving enough local revenue to support a station.
Then take the half of all stations in larger markets that don't come close to covering the whole market, and which have not found an ethnic or religious niche.
I'd say that these situations describe about 4,000 of the nation's AM stations. Those stations are truly nearly worthless or worse. They are the stations that will never return to the air if the main transmitter fails catastrophically or if the tower falls or the studios are flooded. Some are kept on the air by long time owners, but when they pass or retire, they will not find buyers.
"Not Buddy", do you mean "local direct" as opposed to "agency" and "national" revenue?
K
kw1025
Guest
There is “ local direct” you local mom and pop place. Local agency. Agencies in the Buffalo market that reps may have relationships with, out of town agency that may have a huge client in Buffalo, but the agency is not here, and national with is handled by rep firms. In my view, local direct is the best. It is controllable and not dictated by ratings. It’s about relationships and results. Agencies, especially national could give a rats ass about relationships. It’s all about numbers and commodities. WECK is just now starting to see national business because the ratings have increased and we are now on the radar. Local direct business is hard grass root work. Most agency business is a product of ratings. There are plenty of unethical agencies that fee their clients to death. My agency has no fees. If you don’t like our results, you don’t pay us. Easy as that. We must be a good Shepard of the best way to get the most value for our clients dollar. Agency’s go beyond just radio. They act as a representative of whatever is best for the client. I have told many clients they are better off doing digital or television. Depends on the circumstance.
K
kw1025
Guest
Totally disagree. Bad , small, poorly run Am stations are going to tank. But some of the biggest radio stations in America are AM . It depends on the content. In any business, certain products fail if they are not wanted or needed. AM radio has failed where it is poorly run or irrelevant
Getting back to the original thread topic...
You can probably expect ETM to make more cuts after this thrashing Wall Street doled out:
https://www.inquirer.com/business/radio-entercom-podcast-philadelphia-kyw-20190807.html
I remember the days when ETM stock was at $50 a share...about two years after going public.
You can probably expect ETM to make more cuts after this thrashing Wall Street doled out:
https://www.inquirer.com/business/radio-entercom-podcast-philadelphia-kyw-20190807.html
I remember the days when ETM stock was at $50 a share...about two years after going public.
In the press release Field increased the synergies figure to $170 million.
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