Magic Interviewing?????

[ricky]

Stick value of the cluster $13-15 mil.

 

[n_a_nutshell]

I agree with you Stewy, KMX was a heritage station with the same team since 1974. Even the building had the "retro" furniture from the 70's. They were unbeatable and one of the great stations that is no more. What crushed the station wasn't the "new company that bought them" but rather their inability to successfully consolidate.

The team had only ever sold one radio station in one market with the same owner the same manager and the same dj's for 30 years.....they could not adapt to the changes. Most companies went thru the consolidation process in the late 90's, KMX was behind the 8 ball. Doc Miller and Terry Duffie chose to sell the radio station for $6,500,000.00. That was the beginning of the end. No one would pay that money to purchase a stand alone unless they could consolidate some of the costs, it wouldn't make sense. It is a sad thing to see a great station not able to hold its own. The inexperience of the remaining staff to adapt without the backbone of the station was proof. Doc Miller was in the station every day, and Terry Duffie one of the most creative men in the industry, when they walked away so did the passion of the staff. Maybe if the life long staffers would have profited from the sale, there wouldn't be such sour grapes....

The most definitive explanation posted on this subject.

Although I take issue with the term "unbeatable" used by the pooch. In the 80's & early 90's yes. Later no.

I would add that arrogance(see stewy quote below) and isolation from market reality(fueled by this arrogance)
prevented acceptance of consolidation and the homogeneous blending needed to accomplish this difficult task. It also alienated and frightened other members of the cluster. Furthering discontent.

"stewy quote" Oh come on attackpoodle, you buy what is recognized by all as the best under the auspicious of using the formula and people to make the rest of THE company as great

 

[Tibbs4]

Stick value of the cluster $13-15 mil.

Circa 1998. No way today. MARK MY WORDS IN 2008, even the big C's stocks will be crunched
by constant shareholder fears that terrestrial radio is outdated, damaged goods and
revenues 2nd Q will fuel the fire. How many of you would buy KMX and spread the payments
out over 10 or 20 years AND expect to make, as an actual single owner, $250,000.00 profit
to yourself?

 

[attackpoodle]

Oh come on attackpoodle, you buy what is recognized by all as the best under the auspicious of using the formula and people to make the rest of THE company as great (please refer to the Coaching thread on NWFL) but then you insist on what you buy follows your own PC model that comes nowhere near. Agreeing to lower standards/creativity/community service/revenue is your idea of conforming, not mine

Did you miss my point? The two people that kept that station going left the building! Doc and Terry. You are 100% correct Stewy...station should not have been sold, or bought by anyone. It needed to remain an enigma, a stand alone, to go on for years and years.....(until the transmitter finally wears out) never to change or progress, just stay the same, like Leave it to Beaver or Mayberry. But then we wouldn't have anything to post would we? For that matter, WTVY should still be owned by Charles Woods, because we all know what a great time that was!

 

[in3media_be1]

Some of the posts from this thread have been moved to TAKE IT OUTSIDE


http://www.radio-info.com/smf/index.php/topic,89250.msg675364.html#msg675364

 

[ricky]

Tibbs2, I have a fairly good understanding of market values. Two full C's, a rim shot C2, and two C3's with upgrade potential equal 13 mil plus in a market with potential 12 mil annual revenues. Small markets are out pacing medium and large markets, in part because local advetisers recognize the value of local radio and are not distracted by IPOD, satellite radio, the internet and other overly inflated threats to terrestrial radio.

 

[Tibbs4]

Ricky, I seriously understand your logic and appreciate it for the sake of the discussion. Those multiples are going to be
unrealistic in the years ahead, because they are based on the premise that there were many corporate buyers looking
to buy into the markets than are today. Realistically speaking, the stations may actually be worth $15M+ if a Crumulus-type
comes hunting. I look at the value of radio stations based upon the actual ability to pay the debt service and operating
expenses on an individual basis. The fish don't always take the bait, or they bite on bigger dinner, but the key from
my vantage point is to win when you buy, not over pay or over commit to previous track records that could go,,,
tragically south. Multiples are like sticker prices. Only fools or corporations with deep stockholder pockets
pay the sticker price. I don't think you and I are that far off on logic or opinions. The prices need to be adjusted
to reasonable at best. That probably is unrealistic.

Great sales pitches can make them sell for most anything.

 

[ricky]

I agree that the cluster could not service debt at this price at current billing; however, assuming that revenues could be maximized to 5 million annually, and further assuming 35% margins, a savvy owner could handle debt service with a good bit to spare at current interest rates. I completely concur that deals today have to be based on reasonably attainable cash flow multiples to work, but I think based on the assumptions stated above, a price tag in the suggested range could work with sound management.