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Revenue = selling price

A

AM McKeesport

Guest
I see a lot of speculation on what the selling price of a station should be, especially in the WEDO thread. How much weight do you give to station revenues in factoring said selling price? Is it as simple as "Station WXYZ bills X amount of dollars, so it should expect to be sold for Y"? What other factors would you consider more/less important?
 
In the bad old days you simply multiplied station billing by four and wrote a check. Clear Channel turned that into station billing times 16 in some cases and wrote the check (with other people's money). What most haven't figured out yet is that what happened on Wall Street this week changed what radio stations are worth drastically. No more easy loans for station groups.

I wonder if the new credit market that is likely to start making its presence felt this week will scuttle CBS's plans to shed stations in Pittsburgh and St. Louis? If it hasn't they are going to have to be willing to accept a great deal less money than they did when the process started.
 
How much weight would I give it? Not much, unless I am buying a very successful statioon and looking to continue doing the very same thing that they are currently doing. If I am not, then I am more worried about the frequency, the band and the coverage area of the signal before I am worried about what a station previously billed. If a station makes money on brokered programming, that may be good for them, and it would certainly increase their billing, but I were looking to do an active rock format with the frequency, then that brokered billing means nothing to me, because when I have the signal it is revenue that I will not be getting.
 
Snafu said:
I wonder if the new credit market that is likely to start making its presence felt this week will scuttle CBS's plans to shed stations in Pittsburgh and St. Louis? If it hasn't they are going to have to be willing to accept a great deal less money than they did when the process started.
Click to expand...

From the headlines here at radio-info .com, "Radio-Info's T-R-I publication has reported that KMOX, St. Louis (1120) and KDKA, Pittsburgh (1020) are not for sale."
 
One reason for KD not to be for sale is that it's still in Gateway Center with the TV station, while the FMs are in Foster Plaza. It would be easy for KD to cut staff, use some TV people and fill with syndication.

There's also probably no debt service on KD, CBS has owned it since they bought Westinghouse a long long time ago. Y108 came from Entercom, Star and the B from EZ.
 
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