First post and many questions

[Basnya]

Greetings all.

For the past few months I’ve been trolling the internet reading anything that has to do with radio history, sales, engineering, management, ownership, programming, general operation and anything else related to radio. What I have learned is that there is a great deal that I do not know.

This website seems to be the most informative with what appears to be a good mix of people from various positions within the business. I’ve been lurking for a while, reading all the posts and paying particular attention to the ‘business of radio’ section. I have a number of questions, but first a little background:

I am not in the business so I apologize for any intrusion. My story is similar to many so I won’t bore you with the details. The gist is I grew up on Long Island in the 60’s and 70’s and heard all the great broadcasters and music of that era. Radio has been a central part of my life for as long as I can recall. Other kids had bedtime stories. I had an 8-transistor National and late night stations from all over.

Despite all indications and predictions that I would have a future in radio it never happened. At a time when I should have been taking my first steps toward it such as going to college, interning, or just hanging around the studios of WGBB 1240 (which were literally a wind-assisted stones throw from my house) I somehow got sidetracked into other areas, but radio was never far from my mind.

Fast forward 30+ years and I find myself living in St. Petersburg Russia. How I got here is not relevant. However I will soon be returning to the U.S. and coming home with significantly greater assets than I arrived here with.

I have realized that at this point in my life the only way I am going to work in radio is to buy my own station as I am confident that no one is going to take on a 50 year old intern. Nothing major, just some little AM in an unrated market. I’m not looking to get rich, just fulfill a longstanding dream… and maybe help revive radio in the process. I believe in radio and that it will always have a place in the lives of people.

Many posters indicate that that station prices are greatly inflated. I realize no one can predict the future but does anyone see prices coming down in the next 12-18 months? Why or why not?

I would be interested in purchasing an existing station. From a cost perspective which would be better: buying one that is a little rough around the edges and nursing it back to health, or spending the extra money up front to get into a station that has all the latest upgrades and equipment? My gut tells me to buy the very best station I can afford.

There seems to be number of very affordable stations available in the Carolinas. Why? Is is just the size of the market? Or is there something else?

HD / IBOC: Is this the future, or will it go the way of AM stereo?

In a small station, how many owners are also the GM / PD? Is it possible to try and wear too many hats?

From my reading I have come to understand that new management and staff being fired goes hand in hand. But must it always? Has anyone purchased a station and kept all, or at least most of the staff?

Who’s the most valuable person on staff? I would think it’s the engineer.

What is the single largest expense involved with a station? Is it payroll? Power? FCC compliance? Insurance? Maintenance?

How big a problem is vandalism at transmitter sites? Has anyone experienced theft, or attempted theft of copper ground radials?

I realize that none of you know me so maybe this is a poor question to ask but here it is anyway:

Am I completely insane to even think about buying a station?

Any advice is welcome.

 

[firepoint525]

You should probably start by reading this thread:

http://www.radio-info.com/smf/index.php/topic,59892.0.html

 

[radioboy]

Hello and welcome to the board!

Anyone who works in radio, much less buys a station, is insane ;D including me, having been in the business since 1979. Of course, once that radio bug bites you, nothing else fills that itch.

I've always worked in mom-and-pop stations, so I can only share my experience from that viewpoint. I've
brought a couple of AM stations back from the brink of extinction, so it IS possible. I've also been in the
same market for all these years..

In my last "can you fix this AM" gig, the owner/GM lived elsewhere. He handled the FCC paperwork but did nothing else to help. If you are the GM, you'll be responsible for following the FCC rules and regulations.
You'll also probably need to be good at sales.

This station also had a local manager; a part-time weekend board-op/announcer; and myself. I was not given a title, but it would be similar to an operations manager in a lot of stations. I was responsible for: on-air
scheduling of announcers (not very hard with only 3 of us!); monthly billing; affidavits; sales, when possible;
acting as the PD; bank deposits; public relations; maintaining the public file; dealing with the public..etc. for a whopping $8 an hour.

It took 2 years to take the monthly billing from $4000 to $10,000 a month. This station was an AM daytimer.

What you want to look for is a station with some potential. If you can get one for a cheaper purchase price and have funding for sales and promotions, that's to your advantage. Otherwise the debt service will choke you.

As for HD/IBOC, in my market nobody knows or cares. And that's just the owners. I'm in one of the worst AM markets in the U.S.

Like any business that requires a big investment, it's a risk.

We had to use contract engineers. There just aren't many around here. I learned a few tricks so I could do minor repairs myself..but, being legally blind, nothing like internal transmitter repair!

I'd also look for a station that is compliant with FCC requirements. Minor problems wouldn't neccesarily rule a station out, but one with things like no EAS, rusty/falling apart towers, etc. are disasters waiting to happen.
Personally, I would never buy an AM that didn't own a tower site of its own, because otherwise you're also looking at leasing costs, which will do nothing but go up every year.

I'm aware of a couple of decent AMs for sale in smaller markets. These stations are not in bad shape, but they are underperformers financially. Email me at the address in my profile if you'd like to know more about them.

Good luck!

 

[Basnya]

You should probably start by reading this thread:

http://www.radio-info.com/smf/index.php/topic,59892.0.html

Done. Very informative. That's pretty much the type of station I'm interested in.

Having lived in small towns all over the U.S., I am aware of a certain reluctance on the part of the locals when it comes to accepting a newcomer to the area, especially if that newcomer is from a large city.

If the goal is community service, what are some ways to foster goodwill among the locals?

Anyone who works in radio, much less buys a station, is insane including me, having been in the business since 1979. Of course, once that radio bug bites you, nothing else fills that itch.

Thank you. I knew that people here would understand.

In my last "can you fix this AM" gig, the owner/GM lived elsewhere. He handled the FCC paperwork but did nothing else to help. If you are the GM, you'll be responsible for following the FCC rules and regulations.
You'll also probably need to be good at sales.

Having spent the past 7 years dealing with Russian bureaucracy, I'm confident that I can handle the FCC. And if not, isn't that what a good attorney is for?

I was involved in retail sales for most of the 80's. What I recall most from this time is that the successful salesperson will have more ways to say yes than the prospect has to say no. It always worked for me.

This station also had a local manager; a part-time weekend board-op/announcer; and myself. I was not given a title, but it would be similar to an operations manager in a lot of stations. I was responsible for: on-air
scheduling of announcers (not very hard with only 3 of us!); monthly billing; affidavits; sales, when possible;
acting as the PD; bank deposits; public relations; maintaining the public file; dealing with the public..etc. for a whopping $8 an hour.

Obviously this is the sort of thing that would take me a while to get up to speed on. That's why I asked about retaining existing staff.

It took 2 years to take the monthly billing from $4000 to $10,000 a month. This station was an AM daytimer.

Slow but steady progress is good, yes?

What you want to look for is a station with some potential. If you can get one for a cheaper purchase price and have funding for sales and promotions, that's to your advantage. Otherwise the debt service will choke you.

Well I certainly don't want to blow the whole wad on the purchase price. In a perfect scenario I could pick up a station that is already self-supporting but could do better.

In the small markets, how much time is spent out in the street finding out what the community wants in a local station? I'm not talking about hiring consultants, I mean going down to the local bait shop, feed store, or wherever the locals congregate and asking them what they would like. Is this even a practical approach?

We had to use contract engineers. There just aren't many around here. I learned a few tricks so I could do minor repairs myself..but, being legally blind, nothing like internal transmitter repair!

I have had some basic engineering courses courtesy of the US Air Force so I'm not completely clueless when it comes to transmitters and antennae.

I'd also look for a station that is compliant with FCC requirements. Minor problems wouldn't neccesarily rule a station out, but one with things like no EAS, rusty/falling apart towers, etc. are disasters waiting to happen.
Personally, I would never buy an AM that didn't own a tower site of its own, because otherwise you're also looking at leasing costs, which will do nothing but go up every year.

Wouldn't any potential problems come out during the due diligence? I'm looking at this the same way I would buy a used car. Bring trusted, knowledgeable people with me and have them examine it because there is so much I don't know. There can be any number of reasons a station is for sale right? At least some of those reasons might include an owner who realizes he or she has a dog on their hands and wants to get out quickly. Or am I being too cynical?

Ideally I could get into something that has studio / transmitter / tower all on the same site. I once visited a small AM that was built into a converted 3 bedroom house. The kitchen area was reception, one bedroom was the record library, one was production and one was the studio. Where the living room would be sat the transmitter, and out back was the tuning house and tower. I loved it.

I'm aware of a couple of decent AMs for sale in smaller markets. These stations are not in bad shape, but they are underperformers financially. Email me at the address in my profile if you'd like to know more about them.

I have about 6 more months before returning to the U.S. I expect to be able to seriously start looking at station properties within 3-4 months after that. In the meantime I will continue to learn as much as I can.

Thank you again for your reply.