I don't know the stations very well, but in all transactions, there is negotiating. The final sale price is determined by how motivated each party is. I think Pamal was fairly motivated to sell based on their departure from Gainesville. When buying a cluster, frequently, there are under-performers in there which can lower the average. Pamal's cash flow may not have been very good. If you have been working the market for a while and have low revenues, you have a potentially weaker selling position than a "stick" because you have established that, even with work, revenues will be limited for your station. A stick's potential is limited only by the buyer's imagination (and hopefully common sense).poledo said:
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Dark Panama City FM Now Up for Sale
- Thread starter wsbzjazzkat
- Start date
poledo said:Now I run into a problem.... how did Cumulus wind up spending less money per "stick" for WMEZ and WXBM than they did for 97.5? Pamal Pensacola should have been worth much more than the 97.5 license.... Any ideas on how to explain this? All I can think of is that the Pamal deal probably included a payroll while the 97.5 deal didn't include anything but a license and I guess a tower space lease. I'm assuming Pamal Pensacola had no debt for Cumulus to take on. Did Dickie pay more for 97.5 because he's had a hard-on for 97.5 for the last decade? What's missing here?
Work the math backwards to get an idea of what they really bought, in both cases. I don't remember exactly, but didn't EMF pay something like $3 million for WABB? So let's say that they paid 6 times BCF, meaning that 97.5 was cash-flowing about $500K yearly. Observations from those of you in the market were that it wasn't managed well in its later years under the family, so let's assume that the half-million was, say, 25% of sales income, yielding a guess of $2 million for the top-line. In its heyday, WABB was somewhere in the $4 million-$5 million range, but the whole industry took a 35% hit from the recession... CHR changed an got more indirect competition from Urban... and Bernie died--so it all sort of makes sense. And the family wanted out. BUT... Mobile is still a larger market than Pcola... with a higher rate structure...
Somewhat similar story with the Pamal combo. For many years WXBM also cruised along in the $5 million sales range, but there's no doubt that WYCT chipped away at that, bringing profit/cash flow down with it. Linda Lawrence's unceremonious exit was likely a cost-saving measure--and probably related to Pamal's intention to sell ("Maximize cash flow to get the best price for the station."). WMEZ had also been enjoying a lot of sales success, but then got crippled by the hurricane hit (tower damage) and that set them back for a year or two. Coupled with the recession, 94.1's sales probably plummeted in 09-10, and may have never recovered. Bottom line is that the bottom line for the FM-FM pair wasn't close to what it once was. And, yeah, Pensacola is a smaller market than Mobile...
amfmxm said:poledo said:Now I run into a problem.... how did Cumulus wind up spending less money per "stick" for WMEZ and WXBM than they did for 97.5? Pamal Pensacola should have been worth much more than the 97.5 license.... Any ideas on how to explain this? All I can think of is that the Pamal deal probably included a payroll while the 97.5 deal didn't include anything but a license and I guess a tower space lease. I'm assuming Pamal Pensacola had no debt for Cumulus to take on. Did Dickie pay more for 97.5 because he's had a hard-on for 97.5 for the last decade? What's missing here?
Work the math backwards to get an idea of what they really bought, in both cases. I don't remember exactly, but didn't EMF pay something like $3 million for WABB? So let's say that they paid 6 times BCF, meaning that 97.5 was cash-flowing about $500K yearly. Observations from those of you in the market were that it wasn't managed well in its later years under the family, so let's assume that the half-million was, say, 25% of sales income, yielding a guess of $2 million for the top-line. In its heyday, WABB was somewhere in the $4 million-$5 million range, but the whole industry took a 35% hit from the recession... CHR changed and got more indirect competition from Urban... and Bernie died--so it all sort of makes sense. And the family wanted out. BUT... Mobile is still a larger market than Pcola... with a higher rate structure--and it's a nice complement to Cumulus' WBLX. And FWIW, 97.5 has also functioned as Pensacola's leading CHR for 30-some years. Value, value, value. At 3 mil it's a damn bargain.
Somewhat similar story with the Pamal combo. For many years WXBM also cruised along in the $5 million sales range, but there's no doubt that WYCT chipped away at that, bringing profit/cash flow down with it. Linda Lawrence's unceremonious exit was likely a cost-saving measure--and probably related to Pamal's intention to sell ("Maximize cash flow to get the best price for the station."). WMEZ had also been enjoying a lot of sales success, but then got crippled by the hurricane hit (tower damage) and that set them back for a year or two. Coupled with the recession, 94.1's sales probably plummeted in 09-10, and may have never recovered. Bottom line is that the bottom line for the FM-FM pair wasn't close to what it once was. And, yeah, Pensacola is a smaller market than Mobile...
Not sure what happened with that last one. Just trying to correct a damn typo...
But one more thing did occur to me. All three of the stations in question are great sticks, covering both markets with perfectly competitive signals. And, in their present formats, all three are serious players in one market or the other... or both. The point is, these are great acquisitions.
Basic investment rule: buy low, sell high. Radio has gone through a down period, along with the rest of the American economy and the American ad industry. So prices are low. For those who can see past next Tuesday, this is a great time to buy.
But one more thing did occur to me. All three of the stations in question are great sticks, covering both markets with perfectly competitive signals. And, in their present formats, all three are serious players in one market or the other... or both. The point is, these are great acquisitions.
Basic investment rule: buy low, sell high. Radio has gone through a down period, along with the rest of the American economy and the American ad industry. So prices are low. For those who can see past next Tuesday, this is a great time to buy.
G
Groove1670
Guest
Revenue and market is the key. No so long ago an AM was sold in a major market for millions. Not a powerhouse, but it covered the metro both day and night (I think it was Dallas or Ft worth).
We all know that WABB was a legendary station but....if the revenue or market share wasn't there, call letters or history doesn't matter.
We dont know if the WABB or the WDLT swap was in the equation before the sale went down. Keep in mind a Nashville station and 98.3 was also involved in the second transaction.
I would say the 3 mil could be part of that equation. Thus the low sale price. Tax considerations could be part of the deal. We may never know.
Pensacola is a whole different story.
Station values are now in check with market potential in some or most cases. Like real estate, home values were thru the roof. Many took a bath, and the market corrected itself.
And so it goes.
We all know that WABB was a legendary station but....if the revenue or market share wasn't there, call letters or history doesn't matter.
We dont know if the WABB or the WDLT swap was in the equation before the sale went down. Keep in mind a Nashville station and 98.3 was also involved in the second transaction.
I would say the 3 mil could be part of that equation. Thus the low sale price. Tax considerations could be part of the deal. We may never know.
Pensacola is a whole different story.
Station values are now in check with market potential in some or most cases. Like real estate, home values were thru the roof. Many took a bath, and the market corrected itself.
And so it goes.
The way I remember the Cumulus acquisition of 97.5 involved a strait trade for a Nashville FM with a side agreement to sell EMF 98.3 at a good price. (Tibbs, what do you believe the Nashville FM was worth?). The swap of 97.5 in Mobile for the Nashville FM should have been a tax free transaction. Cumulus probably made the 98.3 sale appear as a loss on paper and likely got a small tax write off on that deal. EMF being a non profit obviously means they aren't concerned with paying tax.
I'm still looking at WABD as a new station built from scratch using the corporate resources of Cumulus along with the existing resources of the Cumulus Mobile and Cumulus Pensacola clusters. Sure, they had the advantage of the heritage 97.5 frequency and the blueprint for WABB's success was clear as day and free for them to copy... but Cumulus still had to build the customer base for their new CHR from scratch.
With the WXBM/WMEZ deal all that Cumulus would have to do is change the name on the letterhead. Cumulus would have also had to pay taxes on the Pamal purchase and I also assume Pamal was a "motivated seller"....
But WABB was also a motivate seller, the station had been for sale for years, just not to Cumulus for some reason. WABB's owner was so motivated to sell that they sold the "stick" and threw the baby out with the bath water. Cumulus got a $0 revenue stream when they bought 97.5. Pamal Pensacola should have included the biggest revenue stream in Pensacola radio along with the option for Cumulus Mobile to bring some of their existing clients into the mix to increase revenue from the start... not starting from scratch as WABD did.
The future values of real estate are clear, despite the bubble that just burst... values will continue to rise. Radio is a different story all together. I don't think it's possible to have a ten year plan in place for any broadcast outlet.
I am aware that non profit radio stations have historically had a tough run in Panama City. Even though that is well known I wouldn't be surprised if a religious organization was willing to put up the best offer for 104.3.
I am a total outsider. I know I'm missing some very important parts of this equation. I can't see this forest through all the trees. If y'all "in the know" are bored or don't want to discuss this in a public forum, I have no intentions of pushing this topic beyond your comfort level.
I'm still looking at WABD as a new station built from scratch using the corporate resources of Cumulus along with the existing resources of the Cumulus Mobile and Cumulus Pensacola clusters. Sure, they had the advantage of the heritage 97.5 frequency and the blueprint for WABB's success was clear as day and free for them to copy... but Cumulus still had to build the customer base for their new CHR from scratch.
With the WXBM/WMEZ deal all that Cumulus would have to do is change the name on the letterhead. Cumulus would have also had to pay taxes on the Pamal purchase and I also assume Pamal was a "motivated seller"....
But WABB was also a motivate seller, the station had been for sale for years, just not to Cumulus for some reason. WABB's owner was so motivated to sell that they sold the "stick" and threw the baby out with the bath water. Cumulus got a $0 revenue stream when they bought 97.5. Pamal Pensacola should have included the biggest revenue stream in Pensacola radio along with the option for Cumulus Mobile to bring some of their existing clients into the mix to increase revenue from the start... not starting from scratch as WABD did.
The future values of real estate are clear, despite the bubble that just burst... values will continue to rise. Radio is a different story all together. I don't think it's possible to have a ten year plan in place for any broadcast outlet.
I am aware that non profit radio stations have historically had a tough run in Panama City. Even though that is well known I wouldn't be surprised if a religious organization was willing to put up the best offer for 104.3.
I am a total outsider. I know I'm missing some very important parts of this equation. I can't see this forest through all the trees. If y'all "in the know" are bored or don't want to discuss this in a public forum, I have no intentions of pushing this topic beyond your comfort level.
My guess is 97.1 was worth $7-$10 million. That is totally a stab in the dark, Poledo. The frequency was basically cursed and had only a brief moment of success. Crums never really maximized the potential. I will have to re-read all of the terms of the sale, but my initial thought is Crums way overpaid for Mobile station they had to get rid of the signal in Nashville. I am certainly open to reconsidering this thought process, but if EMF paid $3M for WABB and they got a Nashville station for nada, they got a divine deal!
It IS interesting thread, poledo. Maybe if this keeps up we'll all learn something (else) new.
This Horizon Broadcast that owns the dark PC station and WTSM in Tallahassee..well, I am just not sure how secure a company it is. They overpaid for the Tallahassee station too, and it has been through several formats. They are doing sports now and have had that for a while, so maybe it is working for them. I do know a couple of folks who have shows running at WTSM, although neither is a sports show. Matter of fact, I was a guest on one of them.
I am in Panama City quite a bit, but seldom really have time to listen to radio much when I'm there.
Last time through I did hear Kick'n 103.5, now owned by Powell. Heard someone I know somewhat - Melissa Miller, who survived the changeovers and is now doing mid-days.
I'm just not quite sure what the format void is for 104.3 to fill.
This Horizon Broadcast that owns the dark PC station and WTSM in Tallahassee..well, I am just not sure how secure a company it is. They overpaid for the Tallahassee station too, and it has been through several formats. They are doing sports now and have had that for a while, so maybe it is working for them. I do know a couple of folks who have shows running at WTSM, although neither is a sports show. Matter of fact, I was a guest on one of them.
I am in Panama City quite a bit, but seldom really have time to listen to radio much when I'm there.
Last time through I did hear Kick'n 103.5, now owned by Powell. Heard someone I know somewhat - Melissa Miller, who survived the changeovers and is now doing mid-days.
I'm just not quite sure what the format void is for 104.3 to fill.
Format voids in Panama City? Oddly enough, as many damn signals are in the market, there is a hell of a lot of duplication--2 or 3 deep in CHR... a couple ACs... a pair in Country. I'd venture that a commercial Christian Contemp would be extremely viable there. You've got "WAY FM" in the non-comm band, but 104.3 has a much stronger signal where humans live, and they can sell commercials.
And something like Mark Carter's Seabreeze smooth jazz format. There have been some half-assed attempts, I know (OO), but there is absolutely a market for it. Not much room for error--gotta be good & gotta be smart--but it's a big ol' format hole.
Back to Mobile... I disagree that Cumulus had to start from scratch with WABD. There was no question that ABD was the reincarnation of ABB... and Cumulus had their crack sales crew well-established with both local direct clients and agency folks. No, not a slam dunk, but I'll betcha a six-pack of Old Milwaukee Light that they were able to shift a lot of that $2 million + in WABB billing (or whatever was left) in fairly short order. Had I been Old Lew, I would have coughed-up another $50K to get those damn call-letters, intact. But, last time I checked, the Dickeys weren't seeking my sage advice...
And something like Mark Carter's Seabreeze smooth jazz format. There have been some half-assed attempts, I know (OO), but there is absolutely a market for it. Not much room for error--gotta be good & gotta be smart--but it's a big ol' format hole.
Back to Mobile... I disagree that Cumulus had to start from scratch with WABD. There was no question that ABD was the reincarnation of ABB... and Cumulus had their crack sales crew well-established with both local direct clients and agency folks. No, not a slam dunk, but I'll betcha a six-pack of Old Milwaukee Light that they were able to shift a lot of that $2 million + in WABB billing (or whatever was left) in fairly short order. Had I been Old Lew, I would have coughed-up another $50K to get those damn call-letters, intact. But, last time I checked, the Dickeys weren't seeking my sage advice...
Yep, AMFMLSD, I too believe Cumulus rebuilding WABD to replace WABB was easy and cheap for them. Those assets, however, would have had significant value to anyone outside Cumulus or Clear Channel. That's why I see the Dittman business that was simply shut down as a valuable asset that should have played a role in the value of the sale. I don't know how many heirs Bernie had or how the business was legally set up but in many cases shutting down a lucritave business and sellin off the property cheap would be illegal and open the executor of his estate to lawsuits from the heirs. The executors job is/was to keep the business as profitable as possible and sell it for maximum value. It certainly doesn't appear that was done with WABB AM&FM unless the market is in far worse trouble than you insiders are willing to admit.
And for anyone thinking I'd gotten off track and was wondering how this thread moved from Panama City to Mobile... I was in the process of circling back around to eventually asking if EMF or WAY or a similar religious broadcaster would appear on scene as the only viable purchaser for 104.3.
And for anyone thinking I'd gotten off track and was wondering how this thread moved from Panama City to Mobile... I was in the process of circling back around to eventually asking if EMF or WAY or a similar religious broadcaster would appear on scene as the only viable purchaser for 104.3.
G
Groove1670
Guest
Had I been Old Lew, I would have coughed-up another $50K to get those damn call-letters, intact.
There is no need to put up money for those letters. Only radio people like us know the difference. The public perception is that WABD(B) is back at 97.5 and that is all that matters.
The most important objective was to let the public know that your favorite personalities, with your favorite music, are back at your favorite place on the dial.
Picking up the staff, and relocating, was a plus for Cumulus in a short time frame. It was still in the listeners mind. If it has been longer, say...12-18 months. Not so much.
Because of the timing, the franchise remains. Only time will tell if it will pay off in ratings and revenue.
Sadly, Crums manages to start out on the considerate side of honoring what was, but most of the time they are pretty inept at keeping the magic. With all of their craporate mandates, playlists, staff ratios and on and on, the frequency will be a shell of what it was in less than 24 months.
I guess I am old school, but I still think call letters are important. You still are building a product to connect, and every single connection that could help needs to be used. I also think it shows "respect" for the operation by doing away with old calls associated with old monikers. Then again, wonder what would Crum have to pay for them call letters? $150?
I guess I am old school, but I still think call letters are important. You still are building a product to connect, and every single connection that could help needs to be used. I also think it shows "respect" for the operation by doing away with old calls associated with old monikers. Then again, wonder what would Crum have to pay for them call letters? $150?
My guess is that the WABB calls were not available for sale from the Ditman estate to Cumulus. WABB was the only station on the Mobile dial known to everyone by its call letters. Sure, other call letters are known but in a different way. WABB is not the same as "93 BLX", "95 KSJ", 92 ZOO", "TK101" or even the last set of great local calls that were thrown away WOWW. There are no stations left on the Mobile radio dial known to most by four little letters.
Oh, as for WPFM, I'd bet at least 30% of the audience was still referring to 107.9 as WPFM when they brought back the calls. A solid move that should also add value to that station to old timers like us that may one day be interested in buying a PCB radio station to play with as we drift into retirement at a bar on the beach (and if your going to play radio while entering retirement you might as well buy your own bar to go with it).
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