Re: A little about market valuations.
Please don't put additional brackets in a post. The board brackets and creates a hierarchy by itself. It makes answering terribly tedious.
>With all respect David, I am having a hard time getting a direct answer from
> you. You said before
>>In valuing radio stations, there are more factors than just inflation. There >>is the potential revenue, whic, compounded, nearly doubled from 1993 to >>2000.
>See my problem? The original statement you made that $45 million is the >equivalent of about $75 million when the sale closed is not correct.
Sure it is. Based on value, what was worth $45 in the early 90's was worth $75 later in the decade. Most is NOT inflation (which was rougly 3% per year per the Feds). Most was the increase in core value based on market revenue growth.
> Now you've added qualifiers to you original answer. Since you bring up the >point that the potential revenue, which, compounded, nearly doubled from 1993 > to 2000, are there some statics that show that to be true?
Miller Kaplan, BIA. Even SCBA. Duncan's American Radio through the last edition, too.
> I'm not doubting > you but it seems to me that perhaps there is more to it
> than that. That corporations were willing to overpay for stations that
> weren't performing and didn't actually have the value worthy of the price >they paid.
I can not see one station in La that was overpaid for based on revenues and estimates of BCF. Even The Beat, which is allocated $400 million was a good deal at present billing and rate of market growth (up 6% so far this year alone)
>Since you say there are still many small owners in LA, and some smaller >groups, could you list all the many small owners in LA that broadcast in >English?
I am going to list the small owners. Format is not a consideration, and singling out only English staitions in a market that is 60% ehtnic is racist in my book. Small owners hold AMs 740, 830, 930, 900, 1430, 1540, 1480, 1580, 1600, 1220, 1330, 1300, 1650, 1460, 1260, 1390 and 1510. FMs with smaller (no bigger than pre-dereg size include 92.7, 94.3, 105.5, 93.5, 102.3, 105.1, 96.7, 107.9 Even SBS (96.3 and 97.9) is small, with less than a dozen stations, excluding PR.
>>Consolidation allowed ready access to capital markets, both debt and equity.
>>It also allowed emplyees to get the insurance, retirement and other benefits >>that small owners could not afford or get economically. <<<
>Consolidation allowed owners to eliminate jobs both in front of the mic and >behind it and consolidate jobs among many different stations. Ask all the >people who've lost their jobs due to consolidation if they are experiencing >the benefits of consolidation.
In any era of change, some people don't make it. However, total broadcast employment is up from preconsolidation. More folks in slaes, less in other areas. The biggest loss of employment over time has been engineering. In the mid-40's WOR in NY had over 100 engineers and technicians. Now they have two or three. This is because technology does not require constant oversight today.
>>Prices have always, a few years later, seemed cheap. An LA $115 million >>station that cash flows $18 million today seems like a steal. How many other >>places can you get a 15% ROI consistently on a BCF basis? <<<
>How many stations actually fall under that scenario?
Every full FM signal in the top 50 to 75 markets can do this type of conversion and ROI. AMs a bit less due to progrma cost. Conversion of 35% to 40% in markets 200 to 75 is common, and the roi's are better as ther eis not as much compoetiton to get into those markets.
>>The fact is that most adult stations play many more than 200 songs. Youth >>stations play many less. And in both cases, they play what their listeners >>want to hear.
>Really? Who for example? What adult stations play more than 200 songs and how >many more than 200 hundred to they play?
Get yourself a Mediabase subscription. The average AC (not hot ac) plays around 400 titles with fills and cycled plays, exclusive of specialty shows. Most 25+ stations are in the 300 to 500 song range. The number is, fo course, determined by how many songs there are that many listeners actually want to hear and will not tune out over.
>>>And, even more... outside drive time, and on most stations, morning drive, listeners will flat out say, "shut up and play the music." No one has killed personality. There are far more entertaining morning shows and talk shows than there were 2 or 3 decades ago... but each thing has its place. AC listeners don't want personality most if not all the day... while in some other formats, they do. <<<
>That statement needs it's own thread to dissect. How can you say on most >stations, morning drive, listeners will flat out say, "shut up and play the >music."?
My error... I meant öutside of morning drive" but the tedium of reformatting all your brackets and stuff made me mess up... OUTSIDE OF MORNING DRIVE. There.
>You're statement that there are far more entertaining morning shows and talk >shows than there were 2 or 3 decades ago is not a factual statement but a >subjective statment. Trying to pass it off as fact is not right. Although >there may be more talk shows, the facts of whether they or any of the morning >shows are more entertaining is a matter of opinion.
Provable by research and by a TSL analysis. AM drive shows that are good, like Stern, Seacrest, Piolin, etc., get longer TSL than bad shows or pure music. Totally provable.
>I don't understand why you would call a new music station stupid ...(until >someoen did the homework and realized how deadly new music is to listener >loyalty... killing the stupid new music station in the process.)<<< Can you >explain why you called it stupid?
Because new music drives away listeners in nearly every format, and can only be tolerated in appropriate doses, the measure of which varies by format and demo. The easiest station to kill competitively is one with too much new music, followed by one with a big library.
>>>Amazingly in light of your statement, teens, 93% of them, use radio. But, since there is no profit in serving them directly, they listen less. In the 20's, they come back, per the ratings data<<<
>Are you denying that radio is losing listeners?
Yes. It is losing TSL in some demos, but not cume. The lsiteners are there. But they are, in some ages, listening less. Still and all, the average hours per week oer listener is the same as in 1950 before TV hit the nation broadly.
>Please provide that data. Also show how those teens use radio especially in >light of your statement that those same 93% of teens use radio less.
Arbitron. Market totals are on every demo and on 12+. 92% to 93% of teens in the markets I checked cume radio weekly.
>Also can >you show that 20 year olds are coming back to radio?
Yes. the 18-24 TSL is higher than teen, and is consistent in recovering teens who listen less. 25-34 is even higher.
>>It will take 45 million satellite subscribers to get a 3 share across the US. >>In the mean time, radio billings are up, and many formats are growing. <<<
>If there were 45 million people listening to Satellite radio, that would be >much higher than a 3 share across the US since there is close to 300 million >people in the US. Most of the people I know who have Satellite radio, like >myself don't listen to AMFM radio any longer. There is no need for it.
I will simplify this a bit. Not all 45 million will listen at once, or even every day. In fact, the average radio listener listens only about 12% of the week's horus. And most sat installs are in cars, where only 30% of radio listening takes place.
rating are based on listening, not on the number of radios. In fact, there are over 700,000,000 radios in the US today that get free radio. Which is, of course, meaningless until you turn them on.
If you do the math, it takes 15 million subscribers who listen to about 6.5 hours a week to only satellite in the car to get a total 0.3 share nationally. Many satellite listeners were in the 5% who did not cume radio, or the 7% (national average) who listened very light... so they do not come totally or even in the majority from heavy radio users.
And it is projected to be nearly a decade before satellite gets to 45 million subscribers. By that time, broadbnad services will destroy it.
