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Radio Disney Selling 23 of 24 Stations

S

sparks

This is an article from Radio Ink:

Radio Disney Selling 23 of 24 Stations

Radio Disney just announced it will be divesting 23 of its 24 radio stations in markets across the U.S., effective September 26. Twenty-two of the stations are AM and one is FM. The company tells Radio Ink it will be discussing the sale of the stations with all prospective buyers.

As a result, Radio Disney will reduce its workforce, affecting the employees at the local stations and some in Ad Sales and Operations. Radio Disney’s General Manager, Phil Guerini, issued the following note to Radio Disney staff this morning:

Dear Colleagues,

Across all forms of media, digital technology continues to dramatically change consumer habits - from the iPad, mobile devices and the push of connected devices into the home - and these changes compel us to evaluate and evolve our businesses. Today, we're announcing meaningful changes to our Radio Disney business.

Radio Disney will be increasing investment in both digital distribution platforms and music-centric programming. These decisions will optimize Radio Disney for long-term growth and better reflect the habits of the consumers we serve -- a national audience of kids and families. We are partnering with the most popular digital radio services including our distribution partner of over 12 years, SiriusXM, and the newly forged agreements with ShowMobile, Slacker and Harman's Aha Radio. We also have our fast growing Radio Disney App for iPhone, iPad and Android, our WATCH Disney Channel partnership and our Top 30 syndication partnership that's building across the U.S. We will also be exploring new digital extensions of Radio Disney's programming, including the Radio Disney Music Awards and Radio Disney's Next Big Thing (N.B.T.).

As part of this investment shift, at the end of September, we will be selling 23 of our 24 local radio stations, retaining KDIS-AM Los Angeles to originate Radio Disney's national network programming. The operations of the Los Angeles station will be picked up by the national team. These changes will result in the elimination of some positions, adjustments to other roles and the addition of some new positions. Today and tomorrow, we will be talking individually to those directly affected. Please know that we approached this decision with care and rigor and will provide transition support to those who will be departing the organization.

I have always been impressed with the dedication and camaraderie of the people at the Radio Disney network and local stations. Thanks to that teamwork, Radio Disney leads the radio industry in delivering age-appropriate music and entertainment for kids and families. As we wish our colleagues all the best, we remain committed to continuing the momentum.
 
Friends who've worked at WTAE, 13Q, KQV and KDKA have said that 1250 is the second best day and night AM signal in the market, only mildly directional at night. The questions are, who wants to invest in an AM station, even as part of a cluster, worse as a stand alone. And what kind of money will it take? It's come to the point where the pray for pay companies, aside from their 'teaching stations,' prefer FM signals. Clear Channel is probably paying the new owners of WJAS to clear its content. Would CC buy 1250? Doubt it. The very fact that a company as large and astute as Disney is bailing on AM radio, stations most likely to be sold far below purchase price, indicates that AM is on life support. Beep... beep... beep... beeeeeeeeeeeeeep.
 
Element9 said:
The very fact that a company as large and astute as Disney is bailing on AM radio, stations most likely to be sold far below purchase price, indicates that AM is on life support. Beep... beep... beep... beeeeeeeeeeeeeep.
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Disney used Radio Disney in the mid 90s to promote all things Disney. Technology has changed and they are moving their efforts to other platforms where it is easier to find kids. More kids have smart phones and tablets than AM radios. This doesn't signal the end of AM, just the end Disney's use of it.

As you point out, broadcasters prefer FM over AM. If you find a format people want to listen to, they will listen to an AM station. I can think of a couple formats that would play well in Pittsburgh on an AM like 1250.

As for AM being on life support, it is less desirable today than is was earlier in radio's lifetime but it isn't dead. WJAS sold for $1M (about $600K more than I thought it was worth) and has attracted a lot of press with the format change. As long as people pay attention to AM stations, AM will survive.
 
sparks said:
As you point out, broadcasters prefer FM over AM. If you find a format people want to listen to, they will listen to an AM station. I can think of a couple formats that would play well in Pittsburgh on an AM like 1250.
Click to expand...

OK, if you can think of a couple, please share with the rest of us what they are.
 
sparks said:
Disney used Radio Disney in the mid 90s to promote all things Disney. Technology has changed and they are moving their efforts to other platforms where it is easier to find kids. More kids have smart phones and tablets than AM radios. This doesn't signal the end of AM, just the end Disney's use of it.

As you point out, broadcasters prefer FM over AM. If you find a format people want to listen to, they will listen to an AM station. I can think of a couple formats that would play well in Pittsburgh on an AM like 1250.

As for AM being on life support, it is less desirable today than is was earlier in radio's lifetime but it isn't dead. WJAS sold for $1M (about $600K more than I thought it was worth) and has attracted a lot of press with the format change. As long as people pay attention to AM stations, AM will survive.
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The only reason the WJAS sale got press was it displaced Bogut and Cardille, who have been on the air in Pittsburgh since the 1960's.
 
Tweets from David Field of Entercom: "Let's keep it real: Disney recently paid $100+ mil to put ESPN on FM in NYC & just made big commitment to ABC News on am/fm....,..They cut Radio Disney stations because people under 75 don't listen to music on am."

>>I suspect CC just "stashed" conservative talk on WJAS so that KDKA couldn't have it.

hmm,could be!
 
Avid Listener said:
OK, if you can think of a couple, please share with the rest of us what they are.
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The point I was trying to make is there will be life for 1250 after Radio Disney. As for my thoughts on formats, I would like to hold off on sharing those ideas for a while. Sorry about that.
 
sparks said:
The point I was trying to make is there will be life for 1250 after Radio Disney. As for my thoughts on formats, I would like to hold off on sharing those ideas for a while. Sorry about that.
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In another venue, I heard that Disney will attempt to sell their stations, and for any they cannot get a buyer, they'll turn it off. This has put a glut of AM stations on the market, at a time when AM radio stations aren't exactly hot commodities. If no buyer steps forward, and 1250 goes dark, then what?

I can certainly understand any reluctance to engage in speculation. There are too many people who'll never express an original idea of their own, but will jump all over anyone who makes a speculation that turns out not to come true. That's an excellent reason for not sharing any speculations.
 
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sparks said:
Disney used Radio Disney in the mid 90s to promote all things Disney. Technology has changed and they are moving their efforts to other platforms where it is easier to find kids. More kids have smart phones and tablets than AM radios. This doesn't signal the end of AM, just the end Disney's use of it.

As you point out, broadcasters prefer FM over AM. If you find a format people want to listen to, they will listen to an AM station. I can think of a couple formats that would play well in Pittsburgh on an AM like 1250.

As for AM being on life support, it is less desirable today than is was earlier in radio's lifetime but it isn't dead. WJAS sold for $1M (about $600K more than I thought it was worth) and has attracted a lot of press with the format change. As long as people pay attention to AM stations, AM will survive.
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Yours is a thoughtful perspective. It bears noting that Disney will keep its Los Angeles flagship for a number of reasons related to the business of streaming and rights fees. Disney's perception and knowledge of how the Disney Kids product is consumed and where consumers find it greatly influenced this decision. Due to the nature of the product, kids and moms are in the vanguard of on-line consumers.

As to the price tag for 1250, it seems the benchmark has been set by the sale of 1320, which went for $1 million. So 1250, having a better signal will likely list at a similar if not slightly higher price. I too think the WJAS sale price was on the high side of nominal, but a buyer signed the check, indicating its valuation was correct. Within the past year, a highly direction 5 kw full time AM on 970 (with plenty of transmitter real estate) in Buffalo went to Crawford for $875 thousand.
 
Avid Listener said:
In another venue, I heard that Disney will attempt to sell their stations, and for any they cannot get a buyer, they'll turn it off. This has put a glut of AM stations on the market, at a time when AM radio stations aren't exactly hot commodities. If no buyer steps forward, and 1250 goes dark, then what?
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For personal reasons, I'm hoping their 1560 in New York goes off the air right away.

It is a small glut of stations across 23 markets. These are very desirable markets so I doubt they will have many issues selling stations. The September 26th sell or go dark date is just a business decision. This allows Disney reduced their power and personal costs. They have until September 2015 to either sell the station or face the FCC deleting the license. Of course, on September 25, 2015 they could turn the station back on for a week or two and shut down again thus resetting the FCC clock.

As Element9 pointed out, with WJAS selling for $1M, this helps to set the price. The new owner may get the transmitter building and a tower lease from CC for 96.1, there could be several buyers. It is just a guess but I doubt 1250 will be dark for a long time.

If Disney has a station without owning the transmitter location and has an expensive lease (by today's standards), that station might be a challenge to sell. The rest will go quickly.

AM isn't dead unless you have an electric BWM car.
 
What WJAS sold for is one aspect of setting a price. What really matters is how many other customers were bidding for WJAS. I don't know if anyone has attempted to sell a house in a "soft" real estate market, but it's not pretty. If WJAS sold for $X, and 1250 has $Y worth of better signal, theoretically the asking price would be $X+$Y. But that only means something if there is a customer who has that much money and wants to spend it. If there isn't a customer out there who (1) wants to buy it and (2) can afford it, then it won't get sold.
 
sparks said:
AM isn't dead unless you have an electric BWM car.
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No, AM is not dead. It is sick. It is terminally ill. It is just a matter of time. Nothing will cure it or bring it back to health. But, for now, it keeps on staggering along. When it dies, which will be relatively soon, it won't be with a bang, just with a whimper.
 
The very real concern about investing in an AM radio station: Once the format becomes successful, it's just a matter of time before an FM competitor snags it. There are more efficient ways to invest $1 million, that's for sure.
 
Element9 said:
The very real concern about investing in an AM radio station: Once the format becomes successful, it's just a matter of time before an FM competitor snags it. There are more efficient ways to invest $1 million, that's for sure.
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That rings up the ultimate conundrum for radio. Anyone who wants to make a success of a radio station has to be a hard-nosed businessman who only looks at the profit and loss statements, and only does what's best for the bottom line. Anyone with the mindset to run a radio station that way is too smart to put his money into a radio station in the first place, since he can make a better return on investment in dozens of other businesses. On the other hand, a reasonably wealth "Charles Foster Kane" might want to run a radio station as a hobby. Someone like that wouldn't care about losing money, since he's in the radio business because it's fun, and spending some money to have fun is, well, fun! Even at that, he'd probably want to at least break even.

So, my guess is the most likely candidate to want to buy 1250 would be a person or group of people who'd like to run a radio station as a "break-even" hobby. Who knows? Maybe there are a few unemployed (or unwillingly retired) radio personalities who'd like to get back on the air, who have the means of raising the money to buy 1250. Could we see Jim Quinn, Jim Krenn, Jack Bogut, and Bill Cardille join forces to buy 1250 to get back on the air?
 
Avid Listener said:
So, my guess is the most likely candidate to want to buy 1250 would be a person or group of people who'd like to run a radio station as a "break-even" hobby.
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Please give an example or two of such operations in any market of significance in the US and its territories.
 
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