O
oldrover
Guest
XTalker said:
Not necessarily. But they should know how to sell and train others to do so.
-
Get involved.
We want your input!
Apply for Membership and join the conversations about everything related to broadcasting.
After we receive your registration, a moderator will review it. After your registration is approved, you will be permitted to post.
If you use a disposable or false email address, your registration will be rejected.
After your membership is approved, please take a minute to tell us a little bit about yourself.
https://www.radiodiscussions.com/forums/introduce-yourself.1088/
Thanks in advance and have fun!
RadioDiscussions Administrators
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Not necessarily. But they should know how to sell and train others to do so.
Another good option for those who want to get their feet wet in the realm of station ownership without actually taking the plunge (and laying down the $$$$) till they have experience is LMA. And I suggest the book "Radio Deals: A Step By Step Guide" which lays out all of the steps you must go through to buy a station, and details much of the legal neccesities.
-Eve
-Eve
8
8439-3066
Guest
Two good sources: BuySellRadio.com and FMforSale.com
Good luck. ;D
Good luck. ;D
8
8439-3066
Guest
Exactlt how does an LMA work?
eve said:Another good option for those who want to get their feet wet in the realm of station ownership without actually taking the plunge (and laying down the $$$$) till they have experience is LMA. And I suggest the book "Radio Deals: A Step By Step Guide" which lays out all of the steps you must go through to buy a station, and details much of the legal neccesities.
-Eve
For example you pay the current owner $5K per month to run the station. You pay the bills to keep it going and get to keep the money from the advertising. If all things go well you can purchase the station. Some people do LMA's while waiting on the closing of a station, that way they can see if they can make a go of it or not and can back out before signing the papers. But you usually won't get your earnest money back.
How do contracts get set up for an LMA? Is it simular to a lease? Say for 5 or 10 years? What happens if you take over a station that's not billing well, then turn it around and the original owner wants it back? Can there be a clause stating the original owner can "buy" it back with a lump sum?
knoxbob said:For example you pay the current owner $5K per month to run the station. You pay the bills to keep it going and get to keep the money from the advertising. If all things go well you can purchase the station. Some people do LMA's while waiting on the closing of a station, that way they can see if they can make a go of it or not and can back out before signing the papers. But you usually won't get your earnest money back.
H
hammondo
Guest
You should "Google" "radio station brokers" then e-mail one with your questions.
They are in business to sell rado stations, and you'll get an answer RIGHT FROM "the horse's mouth."
They are in business to sell rado stations, and you'll get an answer RIGHT FROM "the horse's mouth."
Wow...there is a ton of info on the Broker web sites. Great idea! Another question...is "cash flow" the same thing as a station's profits? or it more complex than that?
hammondo said:You should "Google" "radio station brokers" then e-mail one with your questions.
They are in business to sell rado stations, and you'll get an answer RIGHT FROM "the horse's mouth."
"Cash Flow" in the context of a radio station's performance is "how much money is coming in, AND how much is going out ss a result of the company's core business activitie." In fairly simple terms, "profit" would be the difference between the income and the outgo!
It sort of boils down to how much do you have to spend to make the profit! You probably have heard the old line "you have to spend money to make money". Many companies charge managers will hitting a certain percentage of profit and on increasing profit by a certain percentage over the year.
Before you go further in purchasing or LMAing a station, you should contact your local community college and take some business courses. Some schools have great resources for small business. Ask about "accounting for managers" or some course that helps you understand all of the financial terminology and the basic workings of a business ledger.
Financial backers are going to want to know you know what you are doing!
It sort of boils down to how much do you have to spend to make the profit! You probably have heard the old line "you have to spend money to make money". Many companies charge managers will hitting a certain percentage of profit and on increasing profit by a certain percentage over the year.
Before you go further in purchasing or LMAing a station, you should contact your local community college and take some business courses. Some schools have great resources for small business. Ask about "accounting for managers" or some course that helps you understand all of the financial terminology and the basic workings of a business ledger.
Financial backers are going to want to know you know what you are doing!
At the risk of oversimplifying a bit, think of cash flow as profit plus depreciation and amortization. Depreciation and amortization are the writeoff (on your taxes) over time of certain costs. They have the effect of reducing taxable income but are not cash expenses. Therefore you add them back in with profit to get cash flow. If you know an accountant or banker, they could probably explain it further and answer any questions.
Honest to god, I would wait a while. With the public and political flack the FCC is getting about cluster radio ownership killing local service and employment, we are seeing some BIG BIG groups doing mass sell offs of stations (most in mid to small markets), and the price is coming way down.
Commisioner Martin got tore up on tv the other day by a senate investigating committee, and you could really see the move was towards making the FCC limit ownership, maybe not as much as the old 7am-7fm-TV max stations rules of the early 80's, but still way down there.
Imagine if clear channel was told they had one year to divest of all but 50 stations...and nobody buying there properties could also own more than 50 stations.....it would be a buyers market like never seen before.
I really think the wind is blowing in this direction, towards the FCC making some tough rules to limit ownership, and I doubt grandfathering will be in the picture. If this happens you are going to see station prices go right in the dumper, and 1,000 new companies get back into the game.
With the current stagnant profit picture, you still are not going to lose money if you hold off a while. There will always be stations for sale.
Commisioner Martin got tore up on tv the other day by a senate investigating committee, and you could really see the move was towards making the FCC limit ownership, maybe not as much as the old 7am-7fm-TV max stations rules of the early 80's, but still way down there.
Imagine if clear channel was told they had one year to divest of all but 50 stations...and nobody buying there properties could also own more than 50 stations.....it would be a buyers market like never seen before.
I really think the wind is blowing in this direction, towards the FCC making some tough rules to limit ownership, and I doubt grandfathering will be in the picture. If this happens you are going to see station prices go right in the dumper, and 1,000 new companies get back into the game.
With the current stagnant profit picture, you still are not going to lose money if you hold off a while. There will always be stations for sale.
H
hammondo
Guest
As a multiple station owner (now retired) I'd say that WAITING would be the SMART thing to do now.
I believe the BUYERS market is soon to start.
Good luck.
I believe the BUYERS market is soon to start.
Good luck.
It may be smart to wait to purchase, but it is not smart to wait to get ready. When the S _ _ T hits the fan, things will happen quickly. You will want to have your business plan ready, some financial backing ready, and ready yourself for the chore of running a business. Like I said earler, now is a good time to take some business classes.
To add to above comments, the only time you usually can "buy low" is when things are not going well.
H
hammondo
Guest
Google "radio station broker" - there are many around. They operate much like a real estate agent. They can answer your questions.
- Status
- This thread has been closed due to inactivity. You can create a new thread to discuss this topic.