New Times column re 92.3

[airchic]

Excerpts from current issue of New Times by The Bird columnist, Robrt Pela, cut and pasted here. Quotes attributed to Bruce St. James included. For full column, if interested: www.phoenixnewtimes.com

Tight-Ass Mormons

Ever since it was announced back in May that Bonneville International Corporation had purchased hip-hop station Power 92.3 FM from Emmis Communications for $77.5 million, this dejected duck has been popping Zoloft by the fistful.
.........
Yet all's not lost...Bonneville's sold Power's "intellectual property" to the Riviera Broadcast Group, which also owns alt-rock station The Edge 103.9 FM, and sometime during the month of August, Power 92.3 FM will move up the dial to 98.3 FM, according to Bruce St. James, Power's program director, who as of last week became program director for The Edge as well.
.........
St. James declined to disclose the amount Power sold for, but he did state that the convoluted deal involved three companies, Bonneville, Riviera and Emmis Communications, which leased the building Power's in at 4745 North Seventh Street, and owned all of Power's equipment. Riviera had no space for Power to move, so it acquired the lease and the equipment from Emmis, allowing the station to stay put. St. James said the two stations will operate entirely independent of each other, with St. James being the only shared employee.
.........
"It makes no business sense whatsoever," St. James said of Bonneville's lack of financial wizardry. "They paid $77.5 million to throw away $13 million a year. Only the Mormon Church can afford to make decisions like that. They overpaid for it. But my old boss at Emmis, his line was, 'If they're stupid enough to offer it to us, we're stupid enough to take it.'"

 

[dr.akbar]

"It makes no business sense whatsoever," St. James said of Bonneville's lack of financial wizardry. "They paid $77.5 million to throw away $13 million a year. Only the Mormon Church can afford to make decisions like that. They overpaid for it. But my old boss at Emmis, his line was, 'If they're stupid enough to offer it to us, we're stupid enough to take it.'"

Stupid? We think not and a couple of years from now this will look like chump change. The Nurse and I bet a rimshot would have cost The Men In Secret Underwear around $50m, but give them nothing but complaints about the signal. Back out the money they'll get for the "intellectual property" and you have a sales price in the low 70s with a killer signal that's just up the dial from KJZZ (who shares cume with KT'R & KFYI). Advantage TMISU...too bad the CCU suits are too constipated to preempt FM newstalk with one of their stations! Woulda, coulda, shoulda. ???

 

[fiazco]

Stupid? We think not and a couple of years from now this will look like chump change.

In a couple of years? Who operates on that kind of time frame?


If you have the powder(no debt service), and no shareholders, then it can make sense. In this scenario, 92.3 can be viewed as a commodity. No real deprecitation of the asset over time. If it doesnt work out, they can unload it, probably for a profit. (I dare say the same can't be said for the 620 signal; that WILL depreciate.)Simulcast for a while, then move sports to 620, and do something interesting with 860.

On the other hand, it's hard to see the ROI from this venture. How much more does BIC expect to pocket with a move to FM? Will BIC be able to increase AUR? Can they increase inventory? I would LOVE to see their forecasts...

 

[ummmmmmmm]

In 5 years the AM band will hardly exist. Anything worth listening to will migrate to the FM band. The only stuff that will succeed on FM will be programming that can't be downloaded. That's why you see The Zone and Power 92 going away (or moved to a rimshot in Power's case). The companies who have the foresight are making the moves now. The companies that don't have the foresight are still working on trying to create HD radio and don't have a plan to move their hottest AM product to FM or create LOCAL content for their FM's that can't be downloaded. Music stations will be a thing of the past very soon.

 

[newsgodaz]

I heard the same thing in '72 '82 and '92 and AM is still here. I just wish I'd bought that 50kw FM for 50k back in '74. AM won't die if it stays live and local. FM will be a weaker franchise because: a/ there's not a single programmer worth a damn in any market, and b/ too much "free" competition from i-pods etc. :'(

 

[dr.akbar]

And the winner is ummmmmmm. Large marketable audiences on AM in Phoenix are going away rather quickly and The Men In Secret Underwear get it. The market grows, but the number of 100kw FMs on South Mountain remains the same. That drives sales prices, pure and simple.

 

[mr_carlson]

And the winner is ummmmmmm. Large marketable audiences on AM in Phoenix are going away rather quickly and The Men In Secret Underwear get it. The market grows, but the number of 100kw FMs on South Mountain remains the same. That drives sales prices, pure and simple.

Agreed. Now when will the Suits from San Antonio realize it? As much as they suck at radio, I doubt it will be anytime soon.

 

[EricStein]

Rumor has it that Entravision's radio stations in markets in which they don't own a TV station are up for sale, and that may include Phoenix. I wonder if Riviera is just using 98.3 as a placeholder for Power while they make an offer for KLNZ, which does cover at least 75 percent of 92.3's coverage area (and much of the areas where Power's core listening audience is). There's no word on whether or not Riviera is purchasing the 98.3 license (I can't find anything in the FCC database so far).