emailfailed said:
I was wondering, how much does it cost, per year, and/or per month, to run an L.A. station?
When you consider the costs of simply physically maintaining a radio station, the transmitter atop Mt. Wilson, engineering costs, and costs to operate and maintain the office I would gather that is quite a bit, probably six-figures. --That isn't even including deejays, marketing or other functions of a radio business.
GRC gave you some perspective on how broad a question this is... it is a used Hyundai to a Rolls Royce range, too.
But if you take a "reverse engineering" approach, then you can see what the top tier of stations costs.
The operating margin on the big music stations can be in the 40% yo 60% range. We are talking stations that bill $30 to nearly $60 million. But that means that the costs are about $18 million to as much as $25 million.
Let's take an arbitrary $30 million billler. The first 20% to 25% goes to sales department costs... or around $7 million. That includes rep commissions, agency commissions and sales staff commissions as well as sales management.
About a million go to performance royalties. Then add in the manager and management staff (many will be shared in a cluster), insurance, rent or taxes on studio and transmitter property, utilities, engineering, traffic, computers, IT costs, accounting, bad debt collection costs, ratings, research, memberships, dues, supplies, parking, vehicles, advertising and promotion, audit costs, travel and entertainment... and then programming staff. Your $30 million in billings is associated with $15 to $20 million in costs in some cases.
Then, if you have a talk station or a news station, the margins are lower and the costs are higher.
Ethnic AM? Billings might be $3 to $5 million, and you might clear $1 million to $2 profit before taxes, interest on any loans, etc. Still, you likely have very high costs for land rental or taxes, and selling costs may even be higher than on a large station.
It's hard to really calculate as every one is different. There is an AM somewhere in rural America billing $200,000 a year and making the owner a good living. But you can't likely even pay property taxes for a directional AM site in LA for $200 thousand.
