NEW FM for sale?!

[Organizer]

"We may be over radioed, but there are intellignet people buying into this market and making it work by hard work and good radio."

Please name them, because I can't tell by listening.

 

[Prais]

Lazy and Bilco,
Have you read David E's comments in this thread?

 

[bilco]

Of course I have read all the comments on this thread. While I can say that most markets are now over-radioed, there is still a way to make a good living in a market this size if you do things right. I work for Lotus. We are fair size, with about 25 radio and three TV stations, but LV is our biggest moneymaker. We finished up a project costing a lot more than the station that started this thread a year or two ago for a new AM (KWWN). 18 Months ago we traded a station in San Antonio for an FM here and an FM in Bakersfield. Our properties are all making money and getting adequate ratings in the demographics we target. Not as good as a couple of years ago for sure, but unlike some in this market we have had only 4 layoffs (Two of which are back part time) and have had no pay cuts to anyone. As usual quality comes to the surface. We can charge a little more because we produce a better product, not because Howard Kamunsen (the owner) had deep pockets. The people commenting on this board and thread need to keep a couple of things in mind. Radio is a business, and must be run on sound business practices. The listener is our customer, not just one listener, but all of them. We target specific demographics so while one of our stations may be down the list on an overall Arbitron, we are usually at or near the top in our target Demographics. We treat our people well, so that the good ones stay and most stations in this market have people that would love to work for us, many have made that transition if they come up to our standards and expectations.
Are there problems, sure, like anywhere, do some stations fail? yes, but so do some car dealers, bars, resaurants and any other business you want to name. I for one am glad I have spent the best part of 48 years in the radio business and it's never been better than here in LV. SOAP BOX MODE OFF

 

[Lazy J]

Ha Ha Ha, this thread is gonna get sent to TIO if we keep this up..

Running a station is all about cost. Transmitters all cost the same whether it's for Vegas or Po-dunk. Transmitter sites, studios, electric bills, and staff (for the most part) all cost the same. The only major difference is the cost of the license. Most stations that are struggling are doing so because they over-paid for the license and they can't make the payments to the investors. It's not that they aren't making money, it's that they have too much debt and impatient investors. Dallas, TX has almost 90 stations (AM and FM) in it's market.

There is plenty of "Advertising Pie" to go around, but your stomach is too big, so you still feel hungry. a.k.a Bad Business Model.

 

[buzzdemming]

Great post Bill!

I agree with your excellent take on the product of radio.

 

[davideduardo]

Running a station is all about cost. Transmitters all cost the same whether it's for Vegas or Po-dunk. Transmitter sites, studios, electric bills, and staff (for the most part) all cost the same.

Nope. Transmitter sites are real estate, and real estate prices are very market dependent. An LA FM station might spend hundreds of thousands a year on site rental, while one in Cedar City, UT might buy a location for raw land prices and have no cost but the property tax. Utilities depend on the electric company, and salaries tend to be much lower in small markets than big ones. Insurance, property, vehicle and liability, will be lower in smaller markets as a rule.

The only major difference is the cost of the license.

The bigger the market, the higher the billing. So stations pay for better talent and do petter promotion and marketing to get the biggest share possible.

Most stations that are struggling are doing so because they over-paid for the license and they can't make the payments to the investors.

Investors don't have a god-given right to payments. The lenders, on the other hand, do. But high prices for stations were dependent on not the license but the operation... which is why calculations were based on multiples of cash flow, and non-cashflowers were priced at "stick value" much like a vacant lot.

It's not that they aren't making money, it's that they have too much debt and impatient investors. Dallas, TX has almost 90 stations (AM and FM) in it's market.

Dallas has 71 stations licensed to the MSA, Las Vegas has 43.

But Dallas has 40 FMs and LV has 29. Dallas has 28 viable stations, Las Vegas has 19.

Dallas has more than 4 times the radio dollars, and over 3 times the population, but only 50% more viable stations.

LV is over-radioed, and has a much weaker economy with little diversification.

There is plenty of "Advertising Pie" to go around, but your stomach is too big, so you still feel hungry. a.k.a Bad Business Model.

At some point the cost of operating a competitive facility exceeds the share of market revenue you can get. This happens first with bad AM signals (meaning nearly all of them) and rimshot FMs. No business model (and "business models" are closely related to crystal balls and Miss Cleo) can compensate for the economic downturn when it comes to non-viable signals.

 

[davideduardo]

While I can say that most markets are now over-radioed, there is still a way to make a good living in a market this size if you do things right. I work for Lotus.

And Lotus is one of the successful clusters I mentioned by kind rather than name. A good company, starting with Howard Kalmenson whom I worked for at KWKW nearly 40 years ago. Those strategicly assembled clusters can spread the risks across multiple stations and markets, and remain listener driven and a service to their markets.