Cash Flowing

[Radknowski]

Regent provides a peek inside the CBS Buffalo cluster.That's the cluster it bought last Fall - and it reveals it generated $15,258,000 in revenues through the first nine months of last year and over $7.3 million after expenses (while CBS was still the owner). Regent paid $125 million for WJYE and its four sisters.

Projected cash flow would be around $9.73 million over a 12 month period, which (if projections are accurate) means the cluster was sold for about 13x cash flow. Wonder how guys like Mike McQueen and other Rand Building casualties feel when they read these numbers. Well, it appears Jeff Silver is comfortable.

 

[SirRoxalot]

Pumped Up

CBS pumped up cash flow by cutting expenses to the bone and dropping their pants on spot rates in the run-up to the sale. They drove down rates for everybody in the market, and helped cause the "spot clutter" that drove listeners nuts - especially during last fall's campaign season.

That was a short-term strategy, and Regent will have to re-evaluate rates, spot loads, and personnel for the long haul. I'll bet that a 5-year average would show that the CBS cluster went for about 16x cash flow or higher - the number CBS said that they were looking for when they put the stations on the block.

 

[Element9]

Re: Pumped Up, Driven Down

CBS pumped up cash flow by cutting expenses to the bone and dropping their pants on spot rates in the run-up to the sale. They drove down rates for everybody in the market, and helped cause the "spot clutter" that drove listeners nuts - especially during last fall's campaign season.

That was a short-term strategy, and Regent will have to re-evaluate rates, spot loads, and personnel for the long haul. I'll bet that a 5-year average would show that the CBS cluster went for about 16x cash flow or higher - the number CBS said that they were looking for when they put the stations on the block.

This is quite an astute appraisal.

Yet, Buffalo isn't the only market where drastic undercutting occurs. Rochester has been known to go through periods of rate wars where agencies and buyers drive down the rate by virtue of one station or cluster's willingness to severely discount rates and bonus a weak sister station in its cluster. Within the last year, we've even heard a station's format change co-sponsored by a car dealer.

Everything is available for a price and sometimes, that price isn't much more than a bag of trinkets. All too willing to hang out on street corners rather than work the penthouses... this is what it's come to.

-9-

 

[Yeziknoradio]

Re: Pumped Up, Driven Down

All too willing to hang out on street corners rather than work the penthouses... this is what it's come to.
-9-

Yeah...in this weather too... ;D

 

[quadraphonic]

But not even the customers are having a good time with this current street corner climate. :'(