Is Deal for WCVO to Acquire WRFD Struggling?

[xmusicmatt]

From Salem's investor relations page:

Income net of tax for WRFD was $109,000 for the second quarter and $143,000 for the first 6 months of 2009. Salem reports that they typically have higher income periods during the 2nd and 4th quarters.

For a station with a less than one share if any rating at all, and on a daytime AM station, those income numbers (not sales, but income) are pretty darn good.

And very good numbers considering out side of a few shows all the stuff they air between those commericals is downloaded off a satellite dish into an automated system and does not require a human to be on air with ... re: WRFD is cheap to run... WCVO would still be smart to close on the deal. WCVO already has a sale team which can combo sell with WRFD once its theirs which only benefits both stations reaching the 'teaching' crowd and those that like 'the music' also they will save money when they move the studios from its current rented location to their building in Gahanna.

I don't see where this isn't a win for WCVO (despite it being an AM daytimer).

 

[inquisitor]

And very good numbers considering out side of a few shows all the stuff they air between those commericals is downloaded off a satellite dish into an automated system and does not require a human to be on air with ... re: WRFD is cheap to run... WCVO would still be smart to close on the deal. WCVO already has a sale team which can combo sell with WRFD once its theirs which only benefits both stations reaching the 'teaching' crowd and those that like 'the music' also they will save money when they move the studios from its current rented location to their building in Gahanna.

I don't see where this isn't a win for WCVO (despite it being an AM daytimer).

Some quick math ...

$143,000 * 2 = $286,000 * 12 times income = $3,432,000

But, I don't think anybody's getting a multiple of 12 when it comes to station sales these days. I think 5 or 6 times earnings seems to be the norm, which means the station is worth roughly $1,700,000?

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But even if you saw some synergy here, let's see what the financing will cost you. I'm using a sale price of $3,432,000 and an 8.5% interest rate amortized over 20 years and coming up with $357,404.28 in annual payments. In other words, the payments are more than the income.

But even if you saw some synergy here, let's see what the financing will cost you. I'm using a sale price of $1,700,000 and an 8.5% interest rate amortized over 20 years and coming up with $177,035.88 in annual payments. Depending on what that station makes, I doubt the numbers work at $4,000,000 unless WCVO is going to throw over $2,000,000 into the deal, and then you have to question why they would do that just to make $100,000 a year or less than 5%.

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Maybe Mr. Bohach can chime in as he seems to know what station values are these days?

 

[in3media_be1]

Some posts from this thread have been moved to Take It Outside


http://boards.radio-info.com/smf/index.php?topic=152860.msg1292355#msg1292355

 

[jharmon]

They will be lucky to get 700k for the AM. There are not a lot of people clammering around for a stand alone AM. Even Salem would probably keep it if it was a big cash generator.

 

[del_griffith]

My understanding is there is another group in the wings that is willing to go much more than 700k for the facility. The offer simply isn't as generous as CVCO's.

 

[gabigley1]

The deal for WCVO to Acquire WRFD is still on, at least SALEM MEDIA OF OHIO, INC. says it's is still on. This even after the FCC gave it's approval for the deal over a year ago and the sale hasn't been be transacted to WCVO yet.
Today, they have requested even another(THEIR FOURTH) Extension of Consummation:
https://fjallfoss.fcc.gov/prod/cdbs...h.cgi?exhibit_id=792109&formid=905&q_num=5000

Will there be a request for a FIFTH Extension of Consummation? What is the record number of Extension of Consummation that a station has filed with the FCC?

 

[del_griffith]

So does anyone really expect this land deal to close by the end of the year to Salem CVCO to consummate this deal?

 

[del_griffith]

Well now the word is official.

The deal is no longer struggling.

It's dead.

In amended SEC Form S-4 released yesterday, Salem reports:

The amounts presented below have been reclassified to reflect the operating results of WRFD-AM, Columbus, Ohio in continuing operations from discontinued operations. We had entered into an asset purchase agreement on July 31, 2008, to sell this radio station and exit the Columbus market. At that time, the Consolidated Balance Sheets and Statements of Operations for all periods presented were reclassified to reflect the operating results and net assets of this market as a discontinued operation as of the date of the asset purchase agreement through December 2009. The sale was expected to close in the fourth quarter of 2009. On December 30, 2009, the buyer of the radio station advised us that they would not be able to meet the terms of the asset purchase agreement. Because of the buyer terminating the agreement, and uncertainty surrounding our ability to exit the market, we have reclassified the accompanying Consolidated Balance Sheets and Statements of Operations for all periods presented to reflect the operating results and net assets of this market in continuing operations. In January 2010, we collected a $0.2 million termination fee from the buyer pursuant to the asset purchase agreement.

 

[xmusicmatt]

and in other CVCO news..

Changes are coming to the Promise Radio Network monday at 12:00am from what I hear... Scott Saunders last day on air was Friday 01/29/10.

 

[xmusicmatt]

CVCO's Promise Radio Network is no more.. As Of 12mid feb 1st.. Promise Radio Network became "The River" running CCM 24/7 like sister 104.9 WCVO. http://www.riverradio.com/comingsoon.html