Most local clusters of whatever group can't even make 5 FMs rate decent or carry their own weight in sales. Or even 3. How the hell are they going to make x more stations function? Especially when they can't fully staff the stations they have for (insert latest reason here.)
That is not true. I base that on data from a few years back when I still had access to the BIA computer service.
Yes, some stations in a cluster have higher ratings and some have less. But at the sales level, stations are usually sold in groups of two or more stations to give advertisers greater reach in the market. So if you have one station that is #3, one that is #4, one at #6, one at #7 and one at #11 in a client's target demographics, you combine the stations that deliver that demo the best... so the #4 station plus #7 and #11 may be an unbeatable combo in reaching what the client wants.
More stations are not going to solve that problem. It's going to exacerbate it. To disgusting new depths.
No, having more with discernibly different formats allows an owner to effectively sell against new media.
Which is an accurate description of legislation which at best, will give the board a last chance to unload before flying the terrestrial radio coop. It's going to be 1996-2001 all over again. Great for the shareholders and the boys in the boardrooms. Not so much if you were anybody else.
At current prices, most sales, even after required asset adjustments, will result in a loss to the seller. Note that accounting principles requires assets to be "written down" if their value has declined below what was paid for them; that write-down is not a in the bigger picture a "tax saving" as it goes directly against profits and earnings per share... and that affects share value.
Yes, a handful of people got rich. But that's not much of a selling point these days.
Nobody is getting rich selling a station today. In many cases, the seller has loans that exceed the market value of the station(s) and they end up declaring bankruptcy.
And suddenly the newly overleveraged radio companies will have to eventually scale back even further (like having AI programmed, announced stations. And when it gets to that stage, what's the point of humans listening when it's all computers talking? Think about that.)
At the prices stations go for today, most have the ability to be profitable enough to pay any loans. I was taught that I should always borrow money if the profits of an acquisition would bring a greater ROI than the cost of the money needed to buy or build it.
This, all this, right here, is why I don't support any further lifting of ownership caps. iHeart, Audacy, etc. can barely make the best with what they've got. More stations aren't going to help. Have we learned at all from the disaster of the Telecommunications Act of 1996?
That was not a disaster until the 2008 "perfect storm" of a near-depression, the introduction of the PPM and the debut of the smartphone. Before that, radio was doing beautifully. Example: the 3 FM and one AM cluster I was with in LA was projecting reaching $100 million in gross billings... by 2012 it was around $50 million and today it is well below that.
I just don't feel good about selling out this medium any further.
The "medium" is "audio" and not "radio". The competition is not other stations with different owners, it is streams and podcasts and and any other audio source that sells ads. Radio is the smaller part of that, and getting smaller. Further consolidation could give the needed critical mass to sell against the "new media" options.
