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Buying radio stations

O

oaktree

This is an evolving financial climate for radio. CC is selling out. Other chains aren't making projections. Expenses are tightened so that formats go to satellite and spot sales and revenue are down in many markets both large and small.

So...what does it take to buy a station today? Not the mega big market corporate giant ... but the small or medium markets?

Are potential sellers just saying "What high bidder I can get?" or are the formulas of prior sales of multiple of gross or cashflow still matter?

I'm seeing dogs being sold at way over what they can ever expect to get even in break even situations.

How's that happen?

Ok...so you run a station with little, if any, ratings ... you satellite it all day, you have minimum sales that just pay expenses ... and you "must" sell it for three times more than you paid for it...?

How's that work?

SO if you want to be an owner...what do you do?
 
You said; How's that work?
SO if you want to be an owner...what do you do?
...Are potential sellers just saying "What high bidder I can get?"
OF COURSE THEY ARE. Please note that EVERYTHING is for sale for the "right price."

1. (MOST IMPORTANT HIGEST PRIORITY) Get a GREAT attorney. He could be a business partner for this company (or not). He's got contacts that can OPEN DOORS that you can't dream of.Don't complain about his fee - HE (or she)is always worth it! (I'm not a lawyer)

2. Don't be AFRAID; Go to the BANK. Figure out how much you have, and how much you can get and how it looks on paper. Maybe the BANK can be a partner. THAT'S a hot deal. Financially, You MUST LOOK GOOD. Having a BANK as an investor is a wise idea.

3. Go to a radio station broker or 2 or 6. The broker knows who is selling and who is not, and the best method of approach. He also knows (or can find out) the terms that those who are selling want/need.

ASK questions. Don't be bashful.

4. Even if you are rich, don't begin alone. Surround yourself with savvy partners. You might even approach the broker or local business in the town in which the station is located for help doing this.

Spreading the debt is a SMART idea. I've even seen "sweat equity" deals, where the station manager gets a share for being the manager and the others are money investors, or the engineer gets a share for "doing his job."

(searching for an example of the radio business), ahhh YESl Note that just as in the Soprano's, life happens and LOTS of things change over the course of business; death, sickness, lack of interest, need for money can later shuffle the ownership, anyway.

PROTECT YOURSELF!!! Get a buy/sell agreement from each investor, so if they wish to sell, they MUST offer their shares to another owner
FIRST. LIFE insurance (often a part of that agreement) on each partner is also a FABULOUS idea. I had a partner who died in a car wreck at the age of 25. HE earlier talked ME into a policy and I'll NEVER forget him for that.

This is one purpose of the LAWYER being involved, early. Our attorney has saved me hundreds of thousands of dollars over the years (and made him fatter and sassier), and we are CLOSER friends today than when we first got together in 1972.

Good luck.
 
Thanks, Hamm...

I'll be lawyer visiting tomorrow, in fact.

Hope you'll take a look at my email to you. - oaktree -
 
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