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I want to O&O a FM Station...Is this just crazy talk?

R

Radio-X

Guest
Hey Guys/Gals,

I've been on here for awhile and "done time" at a few radio stations in markets ranging from 6,000 people to working in ranked markets. I've done everything from engineering work (my favorite!) to on-air, production, promotions, board-op, and programming. My biggest regret is that I never did much in the sales department.

I've been out of the biz now for a few years (found a better paying but much less rewarding career), I'm in my mid to late 20's, and the radio bug is starting to bite me again pretty hard.

This is the problem: I'm starting to desire running my own commercial FM station. With station prices at fire sale rates, I'm wondering whether the next few years might be a good time to purchase one.

I am not by any means wealthy, and my only possible opportunity to get outside financing would be convincing my father to be a majority shareholder. I'm not out to make millions...just want enough to keep food on the table and a roof over my head.

Everyone tells me I should "go for it" and I could really use a career switch in the next few years. Is this viable or just a pipe dream?

I'm looking for any feedback, experiences, difficulties, criticism, etc. If I can pick some of radio's finest brains here I would appreciate it.

Thanks!

Radio-X
 
I do understand the urge you have to do this.

Be aware that there are MANY MORE profitable, and easier to run businesses than radio. Many have no or fewer regulations and less operating expenses.

I started w/my dads money. 25k (that was alot in the 70's). I found a good partner and soon quadrupled the money. I later bought out my partner. To say thanks, I bought dad a large building for his business.

You might find a rich partner w/a sales background and make him a sweet deal to be with you. Be careful, as this is not an easy thing to do. Make friends with a banker, an engineer, a lawyer and a station broker. You'll need them all.

We looked at 40 stations before we bought the first one. I owned 4 stations over about 20 years (like you a dream. Mine came true). We turned 4 dogs into ratings/profitable places. SALES means everything.

Later, we found a few frequencies and built and sold a few other properties. Then, in 1985 we sold the whole schmere and bought several other (easier) higher profit businesses.

I was later very successful owning 2 funeral homes, a MUCH better business than radio. We bought those with the radio money and ended up much better off.

I can say my family and I now live "happly ever after."

Good luck.

ps contact me privately if you want to talk.
 
OK, speaking from experience, (got out in the nick of time,) I'll bite.

1st- There are few if any "fire sales."
2nd- There's no conventional (bank) financing. Good rates/good terms.
Unless you have solid real estate they won't even talk to you.
3rd- No interest from venture capitolists who were badly burned.
4th- Little or now sales experience. Sales is the fuel that flies the plane.
If you feel you can just hire some good sales dude, be prepared to hand over half the company.
5th- Most important, if you love your Dad, as I'm sure you do, DON'T ASK!
 
Follow your dreams, but with your eyes open. Don't borrow money from family or friends. Avoid partners.

Having been in broadcasting for a number of years before entering another unrelated industry, by the mid 90s my business sense had developed, but my passion for radio had never gone away. I re-entered the business in 1997 and today we own 4 FM stations and an AM in a small rural market.

For me personally, this is satisfying my dreams. Financially, I suppose I'd be making as much money had I remained a broadcast engineer 30 years ago. But I wouldn't be as happy.
 
Ownership was a dream of mine 30 years ago. I really wish I had pursued it, because once the big boys came around with the checkbooks, paying three times what the stations were worth, let's say the beach I'd be on would not be in Ohio.

Having said that...I wonder if it would make more sense today to be producing content for radio stations (and other media) which they would buy, or you'd have the ability to sell directly to advertisers.....or for that matter directly to listeners. Not much in the way of regulatory hassles at least.
 
The advice given above pretty much covers all of it.

Above everything else you need great sales people. .. you need to compensate them fairly and they need to be either on the phones or out on the street everyday.

Local radio is great but people aren't going to be knocking down your door to buy advertising... no matter what format you offer.. SALES = KEY TO SUCCESS.
 
In my view; the good news is there are a lot of great deals on stations due to the economy. The bad news is; there is a reason the station is up for sale cheap, no doubt also due to the economy.

Just realize that the deck would be really stacked against you.

Good luck!
 
If you are willing to work endlessly .. no matter what station you own you can eek out a living.

Serve the community and you'll do fine.. josh
 
I always point to the Red McCombs story. He was a successful car dealer in San Antonio. In 1972, he partnered with Lowry Mays to start Clear Channel. But he stayed in the car business. That was the cash cow. Not radio. The biggest mistake they made was letting the tail wag the dog, and let radio become bigger than selling cars.

My nephew is a sophomore in college, and told me he wants to major in broadcasting. But his mother, the smart one in the family, told him to major in accounting. My advice to him was that it was easier to do radio with accounting money than to account for your radio money. In other words, if you're a successful accountant, you can buy a radio station.

Whatever business you're in now, go full force with it and try to make enough money that you can take a percentage of the profits to buy a radio station. But don't depend on radio for your income. That's what we learned from the last decade. Owning radio stations is a good side business to something else. I like the funeral home idea. But just about anything will do. The scariest day of the week is meeting payroll. When you have other lives depending on you for their food and shelter, all the love you have for programming goes out the window, and you become a hardnosed salesman. And that's the real story. You become a parent to a lot of kids when you own a radio station. Is that what you want to be?
 
Big A said, "I like the funeral home idea."

I did really great in that business - and radio financed the original deal. You can comfortably operate on 1 medium funeral a week. When you join some clubs, advertise, and smile, you can do 5 or 6 a week -
and All I did was sell pre-arrangements (a glorified insurance man), meet people whose relative died, open the door for them, sell caskets and vaults, and go to the bank every day.

We had 4 directors/embalmers (who were always busy). I bought black suits every year for 6 people (including me) and wrote it all off. I bought a couple of cadillacs, paid for 2 full college educations for my 2 daughters and lots more.

Here is my attitude; If I don't do it, someone else will. Everybody dies.

Radio was fun, but it really sucks compared to the funeral biz. Due to a spectacular offer, I sold what I had 2 years later and am living happily ever after.
 
Steve Ross, the longtime head of Time-Warner, got his start as a funeral director. His father-in-law owned a funeral home, and helped set him up. At the end of the day, it's all just show business.
 
My shot at buying a station came years ago when I could have purchased a 3kW FM and 1 kW AM day timer in a small NY state college town for what today seems like pocket change, about $100 grand. In the late 70s the money I did have went to buying a house and raising our children who are now well-educated, successful adults.

Excuse me for (respectfully) saying this thread is becoming rather humorous, something like an episode of Six Feet Under. The funeral home analogy is especially good. Sadly, people die every day, sometimes tragically. I don't know if I could deal with people's sorrow and anguish at the loss of a loved one on a day to day basis. But I suppose if you present yourself as a healer and facilitator, being in the funeral business is a different story because you're actually serving people in their times of need.

I agree with those who advocate sales experience. Sales is the mother's milk of any successful business, especially radio. But you can be a great sales person and still come up against tough times as a station owner.

I know a guy who runs two ice cream stands (in Buffalo) and does very well. He owns his stores which are open from March to November and he spends his summer at his Florida home on the Gulf Coast. Tasty! A woman I worked with in radio years ago opened her own beauty salon with the attitude of “Every woman has hair and finger nails and I’m good at cutting hair and doing nails.” Today, she drives a BMW, owns a nice home and put three kids through college. Unfortunately, she found a shinier, new husband and that cost her a little, but overall, she’s done quite well.

I guess that’s another aspect of owning your own radio station. Be careful who you hire and who you entrust with your investment. And behave yourself with the help.
 
josh said:
If you are willing to work endlessly .. no matter what station you own you can eek out a living.

Serve the community and you'll do fine.. josh
Click to expand...

No successful business eek's out a living. Cash is King! :)
 
O NO! I'm NOT in business to merely "eek out a living." I can do that working for some dumb schmuck.

If I am the guy who takes the biggest gamble - I'm the guy who should get the BIGGEST reward. That's why automation (used correctly) is great!
 
"I suppose if you present yourself as a healer and facilitator, being in the funeral business is a different story because you're actually serving people in their times of need."

OR....you hire the right "caring people" and YOU manage, do pre-arrangements (a whole different atmosphere), be the "promoter" by joining all the clubs, "romancing" the pastors, and undercutting the competition (politely) just enough. My "Free funerals for babies" idea got nearly EVERY Pastor to recommend us. Sometimes people are loyal to the "longest guy in the same town" and sometimes that is a disadvantage.

Also, finding the right "old" "rich" town doesn't hurt. The median age age where I was is over 60. This means just as many folks 45-60 as 60-75. Research is king!!
 
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