The other side of this issue is the failure of the FCC to re-evaluate the ownership limits as stipulated by the 96 TCA. IIRC, they haven't actually done so since Michael Powell was Chairman. So they keep holding these companies to rules that are basically dated. The companies were hoping they could hold on long enough for the Commission to revisit these limits, and perhaps loosen them a bit.
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The Beast AM 980 SOLD!
- Thread starter 34james
- Start date
$15 million (especially right now, when CBS is cost-cutting) is probably preferable to whatever they could have generated down the road had they been allowed to keep KFWB.
But the station will go from a quality owner to a broker. The public has not been served by forcing CBS to sell. But as we know, the FCC got out of the public service business a long time ago. A day will come when CBS sells KMOX and many other legendary AMs. They are among the last of the great owners. When they sell, it won't benefit the public one bit. All the FCC has to do is it's job. But that's become too much to ask.
Another Question: If CBS Sports Radio and the Clippers leave 980, does this open the door for Cumulus to flip either KABC or KLOS to said format and programming?
Unfortunately, time commitments do not allow me to do the proper research to come up with an independent answer of my own, and that won't be changing anytime soon, so I will just have to trust you on this, but it sure seems to me that KFWB would have commanded much higher billing rates back then plus it also seems multiples paid for AM properties were higher then, thus there would be severe asset and price depreciation over the last 12-13 years. That said, they got a great price (for them as sellers), but one that doesn't seem to make much sense from the buyer's side - I don't see how the buyer can monetize future programming to justify it, especially when there is a consensus that its highest and best use is as a limited service area ethnic channel (unless they are synergizing their other properties in some sort of a network, and LA clearance is worth more than the station's stand-alone billings). I look forward to seeing how this works out.
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I think that's a very good question. The key part of the question is the Clippers. What they do will determine the rest of it.
It looks like that is indeed the case......signs may be pointing to a "Desi 980" and a "Desi Superdrive Morning Show" coming to LA perhaps as easy as Summer 2016. From the home page of both San Francisco and Seattle Stations:
Asian Indians are the fastest-growing, best-educated and most-affluent market segment in the U.S. and Desi 1170 AM is the ONLY 24/7 Asian Indian station that reaches the ENTIRE Bay Area Asian Indian population.
Now just plug 980 and Southern California into the quote, and that is perhaps what's to come here.
Well, there weren't any significant AM stand-alone sales in L.A. back then to compare it to. KFRC, San Francisco sold to Family Life Broadcasting in 2005 for $65 million, but 610 had one monster signal. KFWB would likely have gone for more than $15 million.
As for making the money back, with brokered programming, it'll be easier to do over a period of years than it would with spot advertising whose value is tied to the ups and downs of ratings.
But what good is a quality owner with a less-than-quality signal? As with 1550 in San Francisco, being owned by CBS just ain't enough. Time to take the cash and let someone who can make a go of the limited resource have their crack at it.
K
K.M. Richards
Guest
Mike's right that there aren't any station sales that provide an adequate comparison, but I did at least track down the timeline:
CBS acquired KCAL/9 in 2002 and filed the original trust application then. It got hung up by legal challenges.
They amended the application in 2010 and after a "hail mary" pass challenge by Saul Levine, it was approved and KFWB was transferred to the trust in September, 2011.
So there was an approximately eight-year period when CBS could have had a good reason not to consider offers, and they did find an owner within about four years after finally creating the trust.
Note: In post #12, I made a typo which completely changes the meaning of the last sentence. It should read:
Do you think any of the stations they are keeping are less valuable than KFWB? I don't.
CBS acquired KCAL/9 in 2002 and filed the original trust application then. It got hung up by legal challenges.
They amended the application in 2010 and after a "hail mary" pass challenge by Saul Levine, it was approved and KFWB was transferred to the trust in September, 2011.
So there was an approximately eight-year period when CBS could have had a good reason not to consider offers, and they did find an owner within about four years after finally creating the trust.
Note: In post #12, I made a typo which completely changes the meaning of the last sentence. It should read:
Do you think any of the stations they are keeping are less valuable than KFWB? I don't.
1550 is an interesting case study. As KOBY it was reported to have been the #1 station in San Francisco (no ratings seem to be available today) around 1958 or 1959.
Of course, the "market" was the area around the city where toll free calling was allowed... in other words, about 1/10th of the metro of today.
And then came KEWB, KYA and mismanagement at KOBY. And way up on 1550, it could not survive.
Keep in mind that KFRC was part of a "like kind" trade plus cash with KEAR going to Infinity for $95 million while KFRC (AM) weant to Family Radio for $35 million. The $65 million was for the difference in price between the AM and the FM, and the trade saved taxes for CBS on the AM transfer.
KFWB sale price is now posted on the FCC CDBS
According to the FCC application for license assignment for KFWB:
1.5 Purchase Price.
(a) In consideration for the sale of the Station Assets, Buyer shall, at the Closing, in addition to assuming the Assumed Obligations, pay to CBS Radio the sum of $8,000,000 (the "Purchase Price") by wire transfer of immediately available federal funds pursuant to wire instructions that Seller shall provide to Buyer.
According to the FCC application for license assignment for KFWB:
1.5 Purchase Price.
(a) In consideration for the sale of the Station Assets, Buyer shall, at the Closing, in addition to assuming the Assumed Obligations, pay to CBS Radio the sum of $8,000,000 (the "Purchase Price") by wire transfer of immediately available federal funds pursuant to wire instructions that Seller shall provide to Buyer.
My perspective here isn't from the owner, but from the "public." The FCC should be operating in the public interest, and it's my view that forcing this sale due to antiquated ownership rules was not in the public interest. However, I agree that as far as CBS is concerned, they're thrilled to be rid of one more sub-par AM signal. Great move for them. And you're right, with this signal, mainly aimed at Catalina Island, it was never going to be the station it once was.
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Okay, so it's $8 million (the previous $15 mil was based on the figure the buyer was trying to raise for the purchase). That much easier to make it profitable. And, given that KHJ (comparable signal, better cash flow) went for $9.75 million, it makes a lot more sense.
Okay. Now, BigA (and I'm not arguing, I'm genuinely interested), what would be a use for 980 that would serve the public interest that a quality broadcaster could perform and not lose money?
KFWB is non-directional.
Remember I'm looking at this from the POV of the FCC. They don't get involved in usage, merely the licensing and regulation of a public resource.
Practically, there IS no usage, but that's not the point. This was a forced sale. CBS was a willing owner, and they were forced to sell.
If you are looking at radio-locator, what you see is non-directional on land, and then the effects of salt water conductivity once the signal hits the ocean where attenuation is much less than on land. The facility is a single tower non-directional operation.
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