Through a corporation I headed, I got to do 8 of them in Flagstaff, Verde Valley and Prescott. I sold the last one in 1999. I got out of it partly because the tax status seemed unclear. The FCC substantially re-regulated the service in the late 80's, preventing direct payment from the Primary stations in most cases. A lot of their policy statements related to that docket, if not the actual rules they adopted, indicate that they don't consider them strictly 'profitable'. Which may put them in more of a hobby category. Confusing!
Northern Arizona had little FM and no rock on the air (except for a Prescott KDKB translator) as late as 1980. That's when I started a network of 3 translators (KDKB until early 90's, KSLX briefly and then KZON*). These were supported by hourly, 30 second local commercials, run by a nifty automation system I built which was located at the primary station (*waves* at John, who did some very helpful interfacing with KZON's iMediaTouch system.)
KDKB sometimes beat the local stations in Coconino County, and that caused a :

freakout. In the 1980's re-regulation comments at the FCC, the Flagstaff translator was accused of destroying the radio market and causing a local heritage station...KCLS...to go dark. That's probably not the reason KCLS went off the air, however, and there simply wasn't enough translator spot inventory to damage much of anything.
Other translators were done in partnership with area stations (KSMK/KZGL, KAFF); to serve select listeners without a profit motive, (KONC, KNAU); because Harold Camping sent money (KPHF), and because I dug the format (KSTM, Z-ROCK.)
These days, there are excellent broadcasters in the market who have most of the formats covered. So the best use for a translator is to extend FM coverage and to put AM stations on FM, where they'll have a fighting chance.