CBS Shopping Its Atlanta Cluster

[Kabrich]

LincFin does want to get out, but..if they can strengthen their clusters in San Diego and Denver, they could get much larger purchase offers in the long run.

WSTR is a stand alone FM in the market. CBS could actually run that station and do well with it, under Dan Mason.

Wrong again, for reasons already noted. Not the least of which is Dan Mason intends to be out of Radio in about 20 months.

LF wants an exit strategy. They want markets easiest to sell - which is not easy in this enviroment.

If CBS is selling Denver, lots of luck finding 2 buyers who can take an entire cluster in Denver - especially in today's enviroment.

As for San Diego, same thing - if CBS wanted out - that's a clear sign to potential buyers saying "why would you want to buy SD from LF".

Again, take it from the top:

Clear Channel - huge debt - cannot buy anything
CBS - well, nuff said
Citadel - enough trouble digesting ABC - wants exit strategy as well
Cox - buying back its own stock at 8x cash flow instead of buying new stations at 11x cash flow
Cumulus - never count out John Dickey, but Susquehenna stations are still digesting - and as seen - money is very tight - but you can be sure they want at least Atlanta, Tampa and Orlando if there is anyway to get it done.
Emmis - would love to get into Atlanta - if it were 1998. In 2008 they are on the verge of loosing the Company to loan covenants already,imo and those of broadcast analysts - no gun powder.
Entercom - Already own Denver - probably would not mind San Diego and Atlanta - can they do financing? They clearly can do a few fill ins, but I doubt they can get a big gulp.
Radio One - No
Salem - Same issues as everyone else
Spanish Broadcasting - No

Guess what....you just ran out of players.

Left field player Bonneville could possibly step up - They'd just get the church goers to give more on the sabbath.....I'd think we'd see that for CBS Station in SD and Denver, not Atlanta though.

There has been another left field player that 9 months ago was trying to buy a number of large market stations to go Spanish with financing from GE, but given NBC's issues right now, I don't think that will pass now - and besides, they needed NY, LA and Chicago and Miami - none of which are covered by this list of stations - and they clearly would not be paying that much money for a station that is cash flowing to blow it up.

But there it is in a nutshell - the real problem with this whole thing.

 

[jabba17]

From Kabrich:

Clear Channel - huge debt - cannot buy anything
That, plus they are maxed out in ATL.
CBS - well, nuff said
I see CBS as a buyer, not a seller, in ATL.
Citadel - enough trouble digesting ABC - wants exit strategy as well
Does Chapter 11 count as an exit strategy?
Cox - buying back its own stock at 8x cash flow instead of buying new stations at 11x cash flow
That, and they are also maxed out in ATL, unless they want to upgrade and swap WALR 104.1 for a 100kW intown signal. Although Cox has had a man crush on V-103 for years (remember the Cox/Midwestern/Dickey Atlanta Urban Radio Alliance-AURA?)
Radio One - No
I'm sure they would sell their left one to have V-103, but they can't afford it. Again, CBS isn't selling WVEE.
Salem - Same issues as everyone else
What would Salem even program on a high-powered, high-priced FM? I could see them moving WGKA to 790 (and Dickey might help 'em to do it), but there's only so much market for FM Christian programming (see WFSH in the last book). I could see Salem picking up WQXI and/or WAOK and putting urban Christian talk or gospel on the latter.

Left field player Bonneville could possibly step up - They'd just get the church goers to give more on the sabbath.....I'd think we'd see that for CBS Station in SD and Denver, not Atlanta though.
See comments for Salem, above.

This all comes back to a) how much Lincoln wants for their stations, b) how long they are willing to wait for their price, and c) can they keep the stations marketable and at the top of their game in the meantime, and d) how much they are willing to spend for c). Lincoln's stations are worth only what someone will pay for them, not some figure their accountants came up with.

Again, I see CBS as a buyer, and not a seller, in ATL. I could see CBS (or Cumulus) playing chicken with Lincoln and maybe even Citadel and CC. I'm sure that the Dickeys would love to buy WQXI to blow it up.

 

[RTibbs]

Star 94 is not worth what it was worth before because ad revenues are down and they lost their franchise show. Without ad revenues among the highest in the market and no Steve and Vikki they are already valued at less than where they were plus they can not ask for a premium if they are no longer outperforming the market. Lincoln should have sold when they could.

 

[taylorengineer]

Wrong again, for reasons already noted. Not the least of which is Dan Mason intends to be out of Radio in about 20 months.

Interesting Kabrich. Does Dan HIMSELF intend to be out of radio....or does he intend to have CBS out of radio?

 

[kentuckymedia]

LincFin may want to keep WSTR, but they dont want it to go to the Dickey clan. I have the hunch that they would be willing to trade it for some very high profile stations with CBS in San Diego and Denver.

I could see Bonneville making a play to CBS for a deal in Phoenix and St Louie

 

[jabba17]

LincFin may want to keep WSTR, but they dont want it to go to the Dickey clan.

Out of curiosity, why? Assuming they have the money...

 

[Kabrich]

Wrong again, for reasons already noted. Not the least of which is Dan Mason intends to be out of Radio in about 20 months.

Interesting Kabrich. Does Dan HIMSELF intend to be out of radio....or does he intend to have CBS out of radio?

CBS will be in radio in 20 months.....and CBS will in all likelyhood have stations in Atlanta past that time as well.

 

[Kabrich]

LincFin may want to keep WSTR, but they dont want it to go to the Dickey clan. I have the hunch that they would be willing to trade it for some very high profile stations with CBS in San Diego and Denver.

I could see Bonneville making a play to CBS for a deal in Phoenix and St Louie

Bullcrap.

Lincoln Financial is an Insurance Company with no emotional ties to Radio or WSTR. They will sell it to Osama Bin Laden if he would show up to sign the paperwork.

And bottom line, CBS will not depart Atlanta - unless its part of a bigger trade.

 

[Kabrich]

I see CBS as a buyer, not a seller, in ATL.

correct

Citadel - enough trouble digesting ABC - wants exit strategy as well
Does Chapter 11 count as an exit strategy?

Not with the kind of revenue radio makes.

Cox - buying back its own stock at 8x cash flow instead of buying new stations at 11x cash flow
That, and they are also maxed out in ATL, unless they want to upgrade and swap WALR 104.1 for a 100kW intown signal.

Cox owns the newspaper. They cannot take a 100kw intown signal.

Radio One - No
I'm sure they would sell their left one to have V-103, but they can't afford it. Again, CBS isn't selling WVEE.

Correct

Salem - Same issues as everyone else
What would Salem even program on a high-powered, high-priced FM? I could see them moving WGKA to 790 (and Dickey might help 'em to do it), but there's only so much market for FM Christian programming (see WFSH in the last book). I could see Salem picking up WQXI and/or WAOK and putting urban Christian talk or gospel on the latter.

Salem does Oldies in Honolulu and Mexican in Oregon. You aren't thinking outside the religous/fish box.

Left field player Bonneville could possibly step up - They'd just get the church goers to give more on the sabbath.....I'd think we'd see that for CBS Station in SD and Denver, not Atlanta though.[/i]
See comments for Salem, above.

They have rocker in LA and Chicago. See comments for Salem above.

 

[taylorengineer]

Do you think LF missed the boat? Are multiples ever going to approach what was being paid 5 years ago?
With high margins and lot's o' cash flow isn't radio an insurance company's dream investment? Get a management team in place and print money.....seems like a no brainer. Did Lincoln sense the impending demise of the medium, were they looking for cash for other ventures, or are they just wanting safer, more predictable income - pension funds, bonds etc.?

 

[Slider 8]

Ahem,

The predicted "fire sale" of the large radio groups has begun. You will begin to see "new" groups join our little society of ownership. The "new" groups will include former GM's/VP's who will use an Angel to provide the backing.

Wouldn't you want to own a local business that has the ability to put 50% to the bottom line every year? Especially if that 50% could be as much as two or three MILLION dollars?

The old model of private ownership (5x cash flow purchase price, pay it off in 10 years) will return...in selected locations and with select stations. You won't see a Vizzleoneohthrizzle on the menu, but a WAOK or similar property could be had, flipped and operated.

Example: WJRR/Orlando. Once a strong station in ratings, if not revenue, it's now available from CC via the Aloha Trust. Think about it: a nice signal with heritage is for sale in one of the few "growth" markets for radio. Given the low revenue and the cost of moving the operations the sale price should be around 10 Million. (2 million cash flow x 5)

Discuss.

 

[jabba17]

Cox - buying back its own stock at 8x cash flow instead of buying new stations at 11x cash flow
That, and they are also maxed out in ATL, unless they want to upgrade and swap WALR 104.1 for a 100kW intown signal.

Cox owns the newspaper. They cannot take a 100kw intown signal.

But they already own B98.5, 100kW from intown....is there another special limit that kicks in for multi-media owners? Or did they have to negotiate something special with the FCC to own a clear channel AM, four FMs, the paper, and TV? Last I heard the only business that Cox could absolutely NOT do in ATL was cable.

Additionally, River might as well be a 100kW intown, with 98kW + big ol' tower at Chateau Elan. What's the actual rule?

 

[winreader]

Cumulus had an opportunity to buy Star last year and they couldn't afford it. Burt Weiss's contract had it written that he had to be on a 100K watts. This is why Q moved to 99.7 and Rock moved to 100.5. I don't see them buying 94.1 anytime soon.

Are you Bert's attorney? Cumulus' attorney? Or just a rampant speculator/gossip queen like Tom Taylor? What else is in Bert's contract? Do tell.

My source? http://seandemery.wordpress.com/

Sean Demery is Bert's attorney? I can't find his contract anywhere on here. Just whining that it's not 1999 anymore.

 

[Kabrich]

Cox - buying back its own stock at 8x cash flow instead of buying new stations at 11x cash flow
That, and they are also maxed out in ATL, unless they want to upgrade and swap WALR 104.1 for a 100kW intown signal.

Cox owns the newspaper. They cannot take a 100kw intown signal.

But they already own B98.5, 100kW from intown....is there another special limit that kicks in for multi-media owners? Or did they have to negotiate something special with the FCC to own a clear channel AM, four FMs, the paper, and TV? Last I heard the only business that Cox could absolutely NOT do in ATL was cable.

Additionally, River might as well be a 100kW intown, with 98kW + big ol' tower at Chateau Elan. What's the actual rule?

WSB-A and WSB-F, plus TV Grandfathered in prior to rules. None of the other signals put a city grade signal over downtown atlanta.

 

[littlejohn]

Uh, I believe you'll find that the 'grandfathered' portion of Cox' holdings in Atlanta historically was for newspaper ownership as well as broadcast properties.

 

[kentuckymedia]

LincFin wants out. Cox wants to grow in growing markets.

LincFin realizes they could double up their portfolio in western markets which will be attractive when they decide to sell down the road.

This is the perfect marriage between LincFin and CBS!

 

[jabba17]

Cox - buying back its own stock at 8x cash flow instead of buying new stations at 11x cash flow
That, and they are also maxed out in ATL, unless they want to upgrade and swap WALR 104.1 for a 100kW intown signal.

Cox owns the newspaper. They cannot take a 100kw intown signal.

But they already own B98.5, 100kW from intown....is there another special limit that kicks in for multi-media owners? Or did they have to negotiate something special with the FCC to own a clear channel AM, four FMs, the paper, and TV? Last I heard the only business that Cox could absolutely NOT do in ATL was cable.

Additionally, River might as well be a 100kW intown, with 98kW + big ol' tower at Chateau Elan. What's the actual rule?

WSB-A and WSB-F, plus TV Grandfathered in prior to rules. None of the other signals put a city grade signal over downtown atlanta.

So, is it based on city of license and not market? Talk about a loophole...is this why Beat's move-in was to (snicker) Doraville and not ATL?

 

[Rick Rose 2.0]

Cox can't own any additional signals in town. They get by with 97.1 and 104.1 since their city-grade signals do not overlap which is why they spun off 104.7fm. If they sale 97.1 & 104.1 then they could get another in-town signal and the reason why WBTS is licensed to Doraville is because the FCC will never license another station to Atlanta. It looks like 3 is the limit of FMs they can own due to owning channel 2. WIth the 70dbu coverage not overlaping with 97.1 & 104.1 so they are able to own 4 in the market.

 

[jabba17]

Cox can't own any additional signals in town. They get by with 97.1 and 104.1 since their city-grade signals do not overlap which is why they spun off 104.7fm. If they sale 97.1 & 104.1 then they could get another in-town signal and the reason why WBTS is licensed to Doraville is because the FCC will never license another station to Atlanta. It looks like 3 is the limit of FMs they can own due to owning channel 2. WIth the 70dbu coverage not overlaping with 97.1 & 104.1 so they are able to own 4 in the market.

Now I'm picking a nit...didn't Dickey/Midwestern/Ring Radio LMA 104.7 to Cox as part of AURA (ATL Urban Radio Alliance, Cox's failed anti-V-103 foray), and that went by the wayside when Dickey sold 104.7 to Salem, irrespective of anything Cox was doing, and that's why and when Cox moved Kiss to 104.1? IIRC Cox already owned or was already LMAing 104.1 at the time (again IIRC 104.7 at the time was a direct V-103 competitor and 104.1 was the urban AC).

Was Dickey or whoever the previous owner of 104.1 too before Cox entered the picture? Or did Dickey pick up WALR-AM and WFOM from the previous owner of all three?

 

[Kabrich]

Uh, I believe you'll find that the 'grandfathered' portion of Cox' holdings in Atlanta historically was for newspaper ownership as well as broadcast properties.

The FCC does not license newspapers, thus the grandfathered portion is given to the broadast stations -as the FCC can not regulate newspapers.