And the money he gets from Go Country 105.1 is what helps pay for the losses that are generated from his hobby of running all classical music on 1260 AM. That’s the smart way to fuel your dream!
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KBLA-AM sale never consummated
- Thread starter Frequency1
- Start date
Kind of camparing apples to oranges and lemons. Catsimatidis is a Billionaire (Red Apple Group) with diverse businesses that throw off millions of dollars a month in profits. $12.5 milion for a radio station in NYC is play money for him. As for Buddy, he paid if I recall correctly $500K for WECK, and that came with relatively new studios, a building, FM translator, and tower land which is worth probably $500K by itself today. Not a bad deal. Plus, his relationships in the market with advertisers that he simply shifted into his station. Rather unique situation.
We're talking about dreamers buying stand alone AMs. A billionaire can be a dreamer. That's often how he gets to be a billionaire. The point isn't how much money you have but how you spend it. He could have spent his money on Twitter. Instead he bought an AM station.
There's a few things I have learned in the business side of radio. If you think inside the box, you're very limited. If you don't know your competitors as well as yourself you won't survive. What appears to be 'nothing' can be something if you know how to market yourself. If you're willing to develop plans that are outside the box, you have several options for potential success. And if you center on success it's hard to fail. You have to understand sales is about the client liking and trusting you. Nothing solidifies that relationship with the client like regular in person visits instead of emails and phone calls all the time.
There are a few interesting stations out there owned by Dreamers. There are all kinds of dreamers. Some understand their abilities. Some have the money to play with and some are merely motivated to provide a service to their community and feed the kitty when needed. Circumstances for each are different and usually unique but all are valid. They're dreamers.
This week I spoke to the owner of the only FM in his county of about 4,400 people. His homebrew country format of about 3,600 songs ranges from Classic Country (mostly 1960s forward) to Outlaw Country and Red Dirt, Bluegrass, Western Swing and Country Gospel. There's even a little country by rock/pop bands (think Byrds). There's a weekly 5 minute report from the city (county seat is 1,700) and from the county that airs twice that day. The Chamber does a calendar of events 3 times daily. There's a daily devotional at 5 minutes every 6 hours and a weekly outdoors show Saturday morning. Fully automated the station at my last daytime listen had about 6 or 7 commercials a day. Many hours it's just a 10 second promo. His one quirk: when you're the only one why do you need to ID the station every song or two. They do a legal ID on the hour and that's it. I see his point. I doubt the station pays the bills but he hasn't pushed sales yet although he's been running about 5 years. Why'd he pull the trigger? The FCC assigned a frequency to his town and he wanted it in order to do local radio so he bid on it and won the auction. You might wonder if folks like the station. They do. Most say it's stuff they've heard their whole life.
There are a few interesting stations out there owned by Dreamers. There are all kinds of dreamers. Some understand their abilities. Some have the money to play with and some are merely motivated to provide a service to their community and feed the kitty when needed. Circumstances for each are different and usually unique but all are valid. They're dreamers.
This week I spoke to the owner of the only FM in his county of about 4,400 people. His homebrew country format of about 3,600 songs ranges from Classic Country (mostly 1960s forward) to Outlaw Country and Red Dirt, Bluegrass, Western Swing and Country Gospel. There's even a little country by rock/pop bands (think Byrds). There's a weekly 5 minute report from the city (county seat is 1,700) and from the county that airs twice that day. The Chamber does a calendar of events 3 times daily. There's a daily devotional at 5 minutes every 6 hours and a weekly outdoors show Saturday morning. Fully automated the station at my last daytime listen had about 6 or 7 commercials a day. Many hours it's just a 10 second promo. His one quirk: when you're the only one why do you need to ID the station every song or two. They do a legal ID on the hour and that's it. I see his point. I doubt the station pays the bills but he hasn't pushed sales yet although he's been running about 5 years. Why'd he pull the trigger? The FCC assigned a frequency to his town and he wanted it in order to do local radio so he bid on it and won the auction. You might wonder if folks like the station. They do. Most say it's stuff they've heard their whole life.
I think calling Saul a "dreamer" is mis-categorizing him. He's put in the work for 65 years, building and running an FM in Los Angeles, with long-running formats on that FM.
He bought 1260 30 years ago when KMPC abandoned a standards format that wasn't working for them but that could have generated a solid profit using Saul's business model. I'd argue he miscalculated about how much gas was left in both the standards tank and the AM tank, but he's finally settled into using it as a home for unwanted formats, and he owns it free and clear---in the number two media market in the country. So good for him.
Long running formats that appealed to small niches, such as classical, jazz, and now country.
Saul started the FM in 1959, when very few people owned radios that could receive it. Because FM was still a patented technology, the big electronics companies such as RCA didn't include it in their devices. It required an external antenna, so few portables included it. Saul was an FM dreamer.
Fair enough. It paid off for him nicely, though. FM caught on in L.A. to the point that KBCA was top ten in fall '69 and fall '70.
"Dreaming" of the potential of the new FM band which had many improvements over the AM technology that was in use at the time and being able to buy in cheap on the "ground floor" of that opportunity is something completely different than substantially overpaying for a station with very limited revenue potential on an AM band that most people under 40 now don't even know exists.
Talk about apples and oranges...
Good analogy, Flip. FM had nowhere to go but up. AM has nowhere to go.
7 million dollars.... even if you have a net worth of a million plus....
If you borrow money from friends and family the IRS puts an implied interest rate on it, and why am I going to take money out of market rate investments to fund your dream that is high risk at best.
No bank is going to loan you money on a stand alone AM with a license you could not give away, unless there was a huge chunk of real estate under the stick that you own and could be developed to recover the money if it goes belly up
after payroll, taxes, fixed expenses and such the amount left over would not cover the debt service on one million dollars, forget about seven million.
That leaves investors, and investors, partners, or however you want to structure it are going to want a decent ROI for a risky venture, and with real inflation running about 10% for the sake of conversation, the ROI they are going to expect is IMHO unobtainable
Just because MRBI has made very poor business decisions in the past, and paid dearly for their mistakes financially, doesn't mean someone else should over pay for a station to bail them out.
PS if you want to see what happens to dreamers overpaying for AM signals, read the history of WMEX 1510, even Ed Perry jettisoned it for a mere 390K, the prior owners took millions of dollars in losses .... each time the station was sold
MRBI paid 150 MILLION dollars for 15 Radio Unica Communications Corp stations in various markets including KBLA
Radio Unica paid 21 million for the station in 1998
Anyone else seeing a pattern of declining value here?
Tavis owed PBS 2.6 MILLION in legal fees after he challenged his firing that was found to be justified ... he did some very naughty things and got caught in the "Me Too" movement net.
I would bet he could not get credit from a jobsite coffee truck
If you borrow money from friends and family the IRS puts an implied interest rate on it, and why am I going to take money out of market rate investments to fund your dream that is high risk at best.
No bank is going to loan you money on a stand alone AM with a license you could not give away, unless there was a huge chunk of real estate under the stick that you own and could be developed to recover the money if it goes belly up
after payroll, taxes, fixed expenses and such the amount left over would not cover the debt service on one million dollars, forget about seven million.
That leaves investors, and investors, partners, or however you want to structure it are going to want a decent ROI for a risky venture, and with real inflation running about 10% for the sake of conversation, the ROI they are going to expect is IMHO unobtainable
Just because MRBI has made very poor business decisions in the past, and paid dearly for their mistakes financially, doesn't mean someone else should over pay for a station to bail them out.
PS if you want to see what happens to dreamers overpaying for AM signals, read the history of WMEX 1510, even Ed Perry jettisoned it for a mere 390K, the prior owners took millions of dollars in losses .... each time the station was sold
MRBI paid 150 MILLION dollars for 15 Radio Unica Communications Corp stations in various markets including KBLA
Radio Unica paid 21 million for the station in 1998
Anyone else seeing a pattern of declining value here?
Tavis owed PBS 2.6 MILLION in legal fees after he challenged his firing that was found to be justified ... he did some very naughty things and got caught in the "Me Too" movement net.
I would bet he could not get credit from a jobsite coffee truck
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And we all know that he didn't get any real estate and is paying rent for the tower.
We went through all of this two years ago. You can read the comments from back then, but I think we all said he overpaid. The station isn't worth $7 million, then or now. But all we know is that he's still on the air, and he hasn't been sued or evicted. Yet.
Absolutely, no question that Tavis is not Saul, and I didn't include Saul in my list of AM dreamers.
It pains me to say this, but KBLA is the lemon that RadioGuy1864 listed earlier.
Or, we have the most recent case of the sale of a bunch of Univision AMs to a Soros-financed group of Hispanic Democrats. In that case, the "dream" is to reverse the drift of Hispanics away from the Republican party by providing both English and Spanish language services that talk about specific cultural interests and needs.
I don't think anyone believes that those stations can be profitable. But they do believe that a voice is needed right now, and even if those stations are discarded after the 2024 elections, this might be money well spent.
Again, dreamers who have an objective well beyond just running a radio station for profit. It's about buying a louder voice.
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The difference is they are using more than one station. The fact that they have to go to a political group to get money shows how difficult it is for minorities (blacks, women, Hispanics) to develop the contacts necessary to attract large amounts of money. Byron Allen is a celebrity, so he has a few contacts that have helped. I guess Tavis was hoping he could do the same.
Byron " I am going to sue you because you don't advertise to blacks" Allen?
Byron " I bought the Weather Channel, an obsolete cable channel" Allen?
If you asked 1000 people who Travis Smiley or Byron Allen were you might get 50 to 100 that have heard of them
Byron " I bought the Weather Channel, an obsolete cable channel" Allen?
If you asked 1000 people who Travis Smiley or Byron Allen were you might get 50 to 100 that have heard of them
so lets assume, not including sales people or himself, hes got 5 full time employees and pays them a modest wage for LA.. im just guessing here.. $75,000
He pays himself double
He has a few sales people
utilities, internet, music licensing, website stuff, rent for office space, lease hes paying MRBI till the sale closes or hes tossed out
Thats $750,000 a month minimum its costing him... unless some of the hosts are contractors and they get to sel lads and keep a higher percentage
either way, i dont see him getting out of this for less then $500,000 a month
He pays himself double
He has a few sales people
utilities, internet, music licensing, website stuff, rent for office space, lease hes paying MRBI till the sale closes or hes tossed out
Thats $750,000 a month minimum its costing him... unless some of the hosts are contractors and they get to sel lads and keep a higher percentage
either way, i dont see him getting out of this for less then $500,000 a month
ive long wondered if Tavis case of trying to buy and operate KBLA is akin to Jack Narz back when he got blackbaleld after the $64,000 question... he bought a radio station to prove he was fit to work again.. maybe tavis is using this as leverage in the future after who was it.. NPR axed him.. so when he goes to a future employer... he can show he was fit enough to be a licensee, so they shoudl hire him?
I think Hughley is donating his time. The mid-day(crypto) shows may be infomercials. That may be his main source of revenue.
He's asking listeners for contributions. He may be running it as a non-profit.
My original thought was he bought the station to attract BIN and iHeart as a programming client. When that didn't happen, I ran out of ideas. So I'm watching with my popcorn just like everyone else. But I think the public broadcasting connection is broken.
They're soliciting donations and theyve managed a way to make it tax deductible
kbla1580.com
“Friends of KBLA” | KBLA
kbla1580.com
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