Re: Getting "real" about radio.
> Actually, CC tried to make "real oldies" work in several
> markets on very good facilities. They were not happy with
> the ratings or the sales, and whacked 'em in all but one
> place.
The problem though was they listened to consultants, not
people that know the area and the music.
>
> A 12% pretax operating profit margin will not even pay the
> cost of capital. You would be better off investing in mutual
> funds. So, if that is all one could get, they would not
> invest. Even old-line business like GE has better operating
> margins.
The 12 to 15% profit is figured post tax not pre tax. That
is your target zone. Anything above that is cream.
>
> That would make it worse. Since small operators would be far
> riskier than big ones, the rates at which owners could
> borrow would be 6 to 8 points over prime. This would make it
> necessary to get 40% or better margins to take care of debt
> service. It would also make operators go with thevery safe,
> growing formats... and ones on the downtrend like oldies
> would never be programmed.
I disagree. Small operations might be more risky but they will
be able to move and respond better to the listeners and the
advertisers then the large corporations who micro-manage.
6 to 8 points are possible, but so are lower points. many
factors come into play here and affect the loan rate but
quite often a good local company dealing with their local
bank can come up with reasonable rates.
Locally owned or smaller radio corporations are more likely
work at serving thier local market. This can include a format
that may not give them the number one arbitron rating but
give them a solid share of the market
>
> Be careful what you aske for, as you may get it. And you
> will not like it.
This is where you are wrong again.If I were to get it, I'd
be happy with it. I Think the cap is a good thing. I think
the rules on flipping stations (and I don't mean formats) is
a good thing. And to be honest I think allowing some stations
to go dark is a good thing.
>
> we are not necessarily smarter... although if this last post
> is an example, I would resk a bet on that too... but we know
> more of how th ebusiness works. You may think you know one
> kind of music, but you do not know the business part that
> must work if radio stations are to succeed.
Well if the posts from you and Cat are an example I'd take
the bet. I love taking money from a sucker. Do you know more
about the day to day business of radio. Yep, but I can learn
that. What can't be learned easy is the right music. You
really just have to have the ear.
>
> I find him eminently more credible than you, although Cat
> and I have disagreed on some points. Disagreeing in a field
> where there are many solutions to one problem is one thing,
> but being wrong is another.
>
Well of course you do. There's only a nickle's worth of
difference between you two. I've been to your website David.
I've seen your Resume. I was impressed, you've done a lot. But
it also showed me plain as day that even if you, yourself
aren't responsible for the sad shape of radio today, you are
part of that consultan/research/corporate group that is.
I especially like the spanish talk radio KTNQ(?) and the K-mart
thing.
If you're not part of the solution your part of the problem.
Mike Dane
WSTB-FM 88.9
www.SundayOldiesJukebox.com