Let's go back to September 2006, and
this thread which first appeared around the time Regent was buying the CBS Buffalo cluster. To the credit of the many posters here, some salient observations appeared in that thread.
So here we are again, speculating about another potential sale. This time Citadel alledgedly (reportedly, possibly, theoretically) is planning to spin its medium and smaller markets.
Some questions to consider:
Keep in mind that ABC-Disney shareholders own 52% of the company.
Where's the buyer's financing going to come from? Sure, there's trillions of dollars of investment money floating around out there, but those dollars won't come cheap.
Who the hell wants to buy into Buffalo? No offense, Buffalo posters. The same cold question applies to Rochester.
Regent bought into Buffalo for $125 million and damn near lost the company. They had to sell their Watertown cluster to pacify the hostile investors who eventually gained two seats on Regent's board of directors. This should serve as a warning to other companies of Regent's size considering properties in Buffalo.
There is no major company that wants to get into the medium and small medium market mud pit at this time. CBS is bailing, Clear Channel is bailing. Entercom can't find (at least at this time and at the desired price) buyers for three FM's 67 miles down the pike in Rochester. There's a reason for this.
The economy is precarious at best. Less than three weeks remain in 2007 and at this writing, the first quarter of 2008 looks downright threatening.
You'd think with the glut of available stations, the rules of supply and demand would kick into high gear. But the cost of money is prohibitive, even with the Fed considering another .5 cut in the overnight lending fund rate, which affects the prime rate. Oh, and there's that messy sub-prime lending fiasco which seems to be getting more rancid with each passing day.
Here's the part that should scare the snot out of sales guys, on-air people, programmers, sales managers and even cluster managers at Citadel stations that might be spun.
Staff cuts.
Look no further than what's happened at Regent over the last few months. WJYE was "right-sized." There were staff cuts and re-assignments throughout the cluster. Keep in mind that Regent owns Jack, and regardless of what Bob1370 or any other educated radio pro thinks,
Jack gets competitive shares without one live body on the staff.
Regent runs the syndicated Tom Joyner show on WBLK and consistently ranks top 3, often first, Persons 25-54 in morning drive.
WYRK, even with a soft book in Summer 2007, is a runaway train with no direct competitor.
Regent is spinning its sole AM property for $1.3 million, ostensibly to shore-up its financial position not for future purchases, but for survival.
These considerations don't portend a rosey future, just more stress and mediocrity.
From my perspective, the timing isn't right for a sell off, so Citadel can be expected to hold on to their medium market stations for at least another year. They're not going to sell properties at less than full market price.
-9-
