Buffalo JP done at WECK?

[Hyrum]

I'm sure that Tom Bauerle and others have gotten new paint, plumbing, garage doors, or even leased cars thanks to personal endorsements. These days you do have to pay tax on the value of whatever you receive

I agree with you. I hear personal endorsements on about every station I tune in. In a day of declining revenue it is probably a bit of a salary boost for the personality. Paying tax on the thousands of dollars in goods or services is much cheaper than earning the money, paying taxes on it, buying the services and still paying tax on it. I doubt any personality is endorsing anything they don't want to endorse. They're all getting something from it. Those who complain about the endorsements are correct too in that it adds to an already heavy commercial load, but no one outside of the nerds who would do it for free, want to be on the air for peanuts today. Unless the peanuts came with veterinary care for their pet elephant as part of their radio salary in exchange for an endorsement. The endorsers are only trying to enhance radio's sad salary structure.

 

[Kelly A]

Agreed, but with the caveat that 12-13-14X cashflow was an insane valuation to pay, by any standard.

Up to 14X is a record set by mainly TV deals because there was more cash flow. I believe the typically high cashflow multiple paid-for radio station(s) or a group was around 4-7X.

Once prices got to that level, it became gambling, speculation, or hope for the "greater fool" not a sound business decision.

I still maintain that opinion is overly simplistic. Back in the late 90s once your company is publicly traded and more capital becomes available, the expectation was growth. At least at the time, growth in the business was only via acquisitions. The only way to make M&A's happen is by knocking deals loose with attractive offers. Stations or groups that cash flowed in larger markets knew that too and were pleased to wait for the big fish to come along with as high a multiple offer as possible.
Since then the 2008 recession hit, valuations tumbled. Then along came social media changing the advertising landscape, next a global pandemic. Nobody could have predicted in the late 90's when radio was riding a big wave that any of these events would have happened.

 

[Mark Roberts]

A number of studies show that consumers react more positively to conversational, personal endorsements by air talent than typical packaged commercials. Paul Harvey was the master of the endorsement.

But the real master of the conversational advertisement was Jack Carney at KMOX in St. Louis. When he died from a heart attack in 1984, the St. Louis Post-Dispatch estimated that he was responsible for bringing in $4 to $4.5 million of revenue each year, between 1/4 and 1/3 of the station's total revenue.

 

[Kelly A]

Here’s what is a sound business decision. Radio or TV are no longer long term investments that will increase in value. They cash flow businesses, that’s it.

It's always been a cash-flow business. That's why mergers or sales have been based on X-times cash flow. The goal was to own radio advertising in strategically advantageous markets. You do that by owning a stable of radio stations that cover the demographic gamut advertisers want to reach. Nothing has changed, other than the advertising climate and who is left to advertise since the Home Depot's, Walmarts, and Amazon came to town.

Current owners knowing they will never get what they want for the stations, should keep them, align expenses and revenue and pull money out for themselves as long as they can. Plus they do not have to pay taxes on a sale.

"Pulling money out for themselves" is known as embezzlement and is illegal. Broadcast companies are always some form of corporate entity, even the small guys, required to maintain corporate governance. Aligning expenses is what has been debated here, where some believe it's a broadcast owner's responsibility to keep staff even if there is no direct way of paying for them.

The whole 5, 5x broadcast bs is meaningless. Stations are less WAY LESS from what these multiples would say.

Yes as I mentioned, starting in 2008 during the recession.

Find ways to cash flow and owners will be fine for a long time to come.

Oh, you make it sound so simple. It isn't.

Control your top and bottom line and you will make a killing

Thank you, Mr. Monopoly.

 

[SirRoxalot]

Personal endorsements are part of the commercial load. Now, it's arguable that spot loads are too high, especially on talk stations. That's a symptom of stations and groups that are taking buys at ridiculous rates because they value their impressions at the same level as internet ad "impressions." On this page alone, I've ignored several ads that simply don't make a memorable impression on me. It took less than a second. On radio, you get a much greater impression over a much longer period of time that's much harder to ignore. It's simply worth more. There have been several owners who have reduced the spot load and raised the rate, selling results instead of CPM, and actually increasing revenue as well as ratings.

The idea for big broadcasting corporations in the 90s and early 2000s was to buy stations that allowed them to create a de facto monopoly in certain demographics, allowing them to dictate rate and reduce expenditures through "synergies" a/k/a cuts in talent in sales, programming, and production. Syndication, voice-tracking, hubbing, and combining both sales and operations were supposed to "improve the product" by making "big time talent" available in more markets in more areas. The growth was supposed to come as much from reducing costs as it was being able to push rates up. Unfortunately, they saved money, but reduced the appeal of radio on a local level because it was the local connection that was the strength of radio as a medium, especially when compared with most other media services. Big corps make national buys and essentially throw in smaller markets, loading up their commercial sets with content that simply didn't bring in much cash. As national fell off, and big box stores replaced local merchants, the number of local ad dollars fell off, and national certainly didn't replace those dollars.

Digital became the next "savior," using radio to drive listeners to websites that were loaded with online ads and generally offered limited content that attracted viewers. Add in NTR (non-traditional revenue) and local stations, already cut to the marrow, attempted to at least tread water while major corporations went under, then bobbed up again under the aegis of Big Money Lenders.

Reality is that radio is a cash flow business, not a growth business in most markets. Townsquare is doing well becoming THE media in many small markets as local newspapers fold and they add regional content to websites to replace what those small papers offered without the cost of publishing and delivery. They've also dabbled in the concert and event business, which cost them a bunch of money in the long run. It was simply a matter of getting involved in a business that you don't know how to run.

So, where's the upside? Radio still makes a tidy profit, far higher than a supermarket or big box store. Right-size the commercial load, invest in talent in programming, sales, and management that can attract more revenue, and who can get what those commercials are worth. Reduce the $10 national spot load and give smaller local advertisers limited introductory packages. Radio needs to do what it has traditionally done - work with local advertisers and provide content with a sense of place and timeliness that appeals to local audiences.

 

[tbolt909]

"Pulling money out for themselves" is known as embezzlement and is illegal. Broadcast companies are always some form of corporate entity, even the small guys, required to maintain corporate governance. Aligning expenses is what has been debated here, where some believe it's a broadcast owner's responsibility to keep staff even if there is no direct way of paying for them.

Thank you, Mr. Monopoly.

"Do not pass go. Go directly to jail". An independent station owner cannot use the business as a personal ATM. They are required to pay themselves a salary and report it like any employee. I have known people who ignored that and the IRS ultimately found out. The penalty was substantial...

 

[Kelly A]

So, where's the upside? Radio still makes a tidy profit, far higher than a supermarket or big box store.

That's just not true. Comparing the size, scope, and margins of a big box organization like Home Depot, or Walmart with all the radio station groups combined into one, wouldn't come close to the scope and margins of a single big box store name. Don't believe me? Just go online and look at the 10K of a Home Depot or Walmart as compared with an Audacy or iHeart. Just look at the stock per share price of each.

Right-size the commercial load

What does that mean? Advertisers are the customer. If they want to align radio spot loads to match a 'reach' model used in digital advertising, that's what a broadcaster needs to do. You don't tell your customers how they would like to be treated, you offer options that would be acceptable.

, invest in talent in programming, sales, and management that can attract more revenue, and who can get what those commercials are worth.

All very nice polyadic goals, but how do you pay for those investments? Publicly traded broadcast companies' share prices are already under pressure, and the days of having large lending revolvers are few.

Reduce the $10 national spot load and give smaller local advertisers limited introductory packages. Radio needs to do what it has traditionally done - work with local advertisers and provide content with a sense of place and timeliness that appeals to local audiences.

But that's the chicken and egg problem that your flip, simplistic solution doesn't address. In large and small communities, local businesses are either being pushed out by big box stores or online from the likes of Amazon. The remaining ones who have advertising dollars continue to move to social media. The staple of local radio has been car dealers, many of whom have consolidated and moved to online purchasing and advertising exclusively because that's where consumers are looking for cars.

 

[Radiowaves]

It's always been a cash-flow business. That's why mergers or sales have been based on X-times cash flow. The goal was to own radio advertising in strategically advantageous markets. You do that by owning a stable of radio stations that cover the demographic gamut advertisers want to reach. Nothing has changed, other than the advertising climate and who is left to advertise since the Home Depot's, Walmarts, and Amazon came to town.

"Pulling money out for themselves" is known as embezzlement and is illegal. Broadcast companies are always some form of corporate entity, even the small guys, required to maintain corporate governance. Aligning expenses is what has been debated here, where some believe it's a broadcast owner's responsibility to keep staff even if there is no direct way of paying for them.

Yes as I mentioned, starting in 2008 during the recession.

Oh, you make it sound so simple. It isn't.

Thank you, Mr. Monopoly.

Don’t know what you are talking about but taking money out of your own private company is not illegal or embezzlement. It’s reported owner distribution. You pay tax on it.

I have a station we work with in Watertown, and the owner has the business under an LLC, that files as an S-Corp.

He pays himself in owner distributions monthly from the cash flow/profit, files it as owner draw, and pays his tax rate.

Also, yes it has always been a cash flow business, but it was also a business that increased in value. Now, it is only a cash flow business. The value is no longer growing, in fact it is receding big league.

If you buy a station now, plan to own it for life, or sell it at what you bought it for, or less. Nobody sees the long term value anymore. I will add this that broadcast TV is in even worse shape. In that platform, not only do you have a plethora of options with streaming, but the networks give the stations very little ad inventory to sell, unless it is locally produced, like news, and you don’t have to be a rocket scientist to realize that less and less people are getting their news from broadcast tv.

 

[Kelly A]

Don’t know what you are talking about but taking money out of your own private company is not illegal or embezzlement. It’s reported owner distribution. You pay tax on it.

If you're talking about a small mom-and-pop operation, the number of shares may be spread across one or two people. The owner is on the payroll, including withheld taxes like anyone else. If the shareholders or board of directors decide bonuses for the major or minor shareholders, a separate taxable amount would be levied. The fact remains that small businesses that decide to just pluck money out, put their businesses' future in jeopardy. I've seen some small sleazy operators creatively pull money out by voting bonuses to themselves, only to face financial hardships later because now their business has no cash reserves should something go wrong. Just look at how many of these sleazy operators have walked away from small markets when a transmitter burns up, or a tower needs replacement. I can give you many examples, but there have been plenty of examples right here on this site.

I have a station we work with in Watertown, and the owner has the business under an LLC, that files as an S-Corp.

That's what I said. Most companies are a form of corporate entity and need to work within the rules for federal and state incorporation laws.

He pays himself in owner distributions monthly from the cash flow/profit, files it as owner draw, and pays his tax rate.

Cash flow and profit aren't the same thing. Cash flow is the money that flows through (in and out) of the business during a given period, while profit is whatever remains after all taxes and costs are deducted. You can have high free cash flow but because of debt, expenses, or other costs, leave no profit.

Also, yes it has always been a cash flow business, but it was also a business that increased in value.

Not sure what you've been doing in the past sixteen years, but all broadcast properties have lost at least 50% of their value starting in 2008. And the values have only gone down from there. Even larger market stations in the past five years have lost an additional 30% due to advertising slowdowns.

Now, it is only a cash flow business. The value is no longer growing, in fact it is receding big league.

If you buy a station now, plan to own it for life, or sell it at what you bought it for, or less.

So, are you contradicting your prior statement that broadcasting is a "business that increased in value"? Sure appears that way.

I will add this that broadcast TV is in even worse shape. In that platform, not only do you have a plethora of options with streaming, but the networks give the stations very little ad inventory to sell

The amount of inventory for network O&Os or affiliates hasn't changed in years. The problem is national and local direct to fill that inventory is depressed. The real threat is if the networks decide to make good on their threats to cut prime scripted programming. In that case, local stations would need to come up with syndicated something to fill what would normally for many years be valuable breaks.

, unless it is locally produced, like news, and you don’t have to be a rocket scientist to realize that less and less people are getting their news from broadcast tv.

Oh, believe me, being in the TV business for 25+ years, nobody thinks that there are more local TV news viewers on the horizon.
But the only thing that makes TV worse than radio is the scale. TV still has more eyeballs over longer periods of hours a week, that's why candidates and PACs buy a lot of political ads. Radio doesn't come close to the political buys. The problem is; when the elections are over this November, then what?

 

[ckg279]

From what I heard is he is on a personal leave of absence for reasons regarding family. He will be back

T-Bolt, for a guy who thinks WECK is self-promoting all the time, you sure do your part to make that happen

Ever think the staffing carousel might be a good thing for radio? Ever think radio needs constant changes like that to remain fresh and different? Ever realize that WECK has a weekly cume only 10k less than WBEN and beats many FM’S with much better signals.

You should be licking the owners boots. He’s got a successful station. You don’t. Game over

Give us a list of all your success stories

If memory serves, JP was the caregiver for his elderly parents; maybe that's the reason behind his LOA.

 

[Oldbloodandguts]

Just saw a Facebook post from JP that he is done with WECK because his show with the County Exec Mark Poloncarz got pulled off the air by the owner. They were doing a Beatles show together. Probably got challenged by owner’s friend and advertiser Ralph Lorigo of opposing party, the Conservative Party.

 

[Radiowaves]

Unfortunately, you could not be more wrong.

The BWTB show is airing as usual this Sunday, with special guest host Mark Polancarz. NEVER did the owner say “pull the show”. The show is running, the promotion is running. The only thing that the owner pulled was a Facebook page on Tues that was put up without his permission. The post garnered 20 negative responses in about 20 min, and the owner was not dumb enough to leave the kind of scrutiny for 5 days straight.

JP quit over taking down the Facebook post. If you want to see some gravity of the negative responses just look at the county executive’s page where he posted his appearance.

Buddy did not make this political. The commenters did. JP has zero idea what he is talking about. He is still clueless about if the show is running, which it is, and Buddy thought it was a great idea. When it turned political due to social media and false accusations, Buddy pulled the post.

There you go. Report that.

 

[Radiowaves]

Just saw a Facebook post from JP that he is done with WECK because his show with the County Exec Mark Poloncarz got pulled off the air by the owner. They were doing a Beatles show together. Probably got challenged by owner’s friend and advertiser Ralph Lorigo of opposing party, the Conservative Party.

Totally false. Get your facts straight

 

[Radiowaves]

If you're talking about a small mom-and-pop operation, the number of shares may be spread across one or two people. The owner is on the payroll, including withheld taxes like anyone else. If the shareholders or board of directors decide bonuses for the major or minor shareholders, a separate taxable amount would be levied. The fact remains that small businesses that decide to just pluck money out, put their businesses' future in jeopardy. I've seen some small sleazy operators creatively pull money out by voting bonuses to themselves, only to face financial hardships later because now their business has no cash reserves should something go wrong. Just look at how many of these sleazy operators have walked away from small markets when a transmitter burns up, or a tower needs replacement. I can give you many examples, but there have been plenty of examples right here on this site.

That's what I said. Most companies are a form of corporate entity and need to work within the rules for federal and state incorporation laws.

Cash flow and profit aren't the same thing. Cash flow is the money that flows through (in and out) of the business during a given period, while profit is whatever remains after all taxes and costs are deducted. You can have high free cash flow but because of debt, expenses, or other costs, leave no profit.


Not sure what you've been doing in the past sixteen years, but all broadcast properties have lost at least 50% of their value starting in 2008. And the values have only gone down from there. Even larger market stations in the past five years have lost an additional 30% due to advertising slowdowns.

So, are you contradicting your prior statement that broadcasting is a "business that increased in value"? Sure appears that way.

The amount of inventory for network O&Os or affiliates hasn't changed in years. The problem is national and local direct to fill that inventory is depressed. The real threat is if the networks decide to make good on their threats to cut prime scripted programming. In that case, local stations would need to come up with syndicated something to fill what would normally for many years be valuable breaks.

Oh, believe me, being in the TV business for 25+ years, nobody thinks that there are more local TV news viewers on the horizon.
But the only thing that makes TV worse than radio is the scale. TV still has more eyeballs over longer periods of hours a week, that's why candidates and PACs buy a lot of political ads. Radio doesn't come close to the political buys. The problem is; when the elections are over this November, then what?

You apparently know everything about the business of broadcasting. Do you own a station?

 

[SirRoxalot]

I think I've got it. JP quit, Buddy didn't fire him. Putting any political figure on the air on a music station is probably a bad decision in today's highly partisan environment whether he's a personal friend, rabid fan, or not.

 

[tbolt909]

The BWTB show is airing as usual this Sunday, with special guest host Mark Polancarz. NEVER did the owner say “pull the show”. The show is running, the promotion is running. The only thing that the owner pulled was a Facebook page on Tues that was put up without his permission. The post garnered 20 negative responses in about 20 min, and the owner was not dumb enough to leave the kind of scrutiny for 5 days straight.

JP quit over taking down the Facebook post. If you want to see some gravity of the negative responses just look at the county executive’s page where he posted his appearance.

Buddy did not make this political. The commenters did. JP has zero idea what he is talking about. He is still clueless about if the show is running, which it is, and Buddy thought it was a great idea. When it turned political due to social media and false accusations, Buddy pulled the post.

So, the station owner is more concerned about random Facebook comments? Don't stations use Social Media for promotion? A host quit because the owner removed a Facebook post? Why did they bother having a County Executive as a guest on a Beatles show anyway if they feared criticism? Does WECK take money for political advertising?

This whole episode sounds like more High School drama and egos run amok. "Sound And Fury Signifying Nothing"...

 

[davideduardo]

You apparently know everything about the business of broadcasting. Do you own a station?

Kelly owned a "bunch of stations" some years back. He was smart enough to get out in time.

And yes, he is very knowledgeable, based on experience.

 

[davideduardo]

So, the station owner is more concerned about random Facebook comments? Don't stations use Social Media for promotion? A host quit because the owner removed a Facebook post? Why did they bother having a County Executive as a guest on a Beatles show anyway if they feared criticism? Does WECK take money for political advertising?

This whole episode sounds like more High School drama and egos run amok. "Sound And Fury Signifying Nothing"...

Aw, heck. This sort of thing happens every day, all day, on social media. And moderators remove the comments that are offensive, libelous or, sometimes, just plain stupid.

In this case, the station owner was protecting a nonpolitical public image of his station when it took a left turn into partisan territory. Good for him.

 

[Kelly A]

You apparently know everything about the business of broadcasting. Do you own a station?

I was an operating partner in several. Sold the last one about one year ago.

 

[tbolt909]

In this case, the station owner was protecting a nonpolitical public image of his station when it took a left turn into partisan territory.

By deleting a Facebook post? Why bother even airing the program if he's concerned about backlash and if the host has quit? None of it makes sense...