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WARM 93.9fm
- Thread starter Howard Dean
- Start date
F
Faith127
Guest
Timewarp said:
...and if a format works somewhere else it has to work in Indy!
L
look4mission
Guest
K Love is a stretch for Indy...nothing on northside... WJCF
is automated time and temp/satellite... ?? WGNR is all satellite.
WQME in Anderson is pretty good and coverage area not bad either.
is automated time and temp/satellite... ?? WGNR is all satellite.
WQME in Anderson is pretty good and coverage area not bad either.
Timewarp said:
I would be surprised if any license alone in Indy is worth $30 million. A class C1 in Kansas City was recently sold for stick value alone for just over half that, and Kansas City is a bigger market. EMF bought it, and the commercial operators thought they overpaid. In order to get good value for a station, you have to make it successful.
no doubt the big attraction is wzpl. 107.9 was wtpi when purchased from mystar and changed to wntr. wzpl consistently leads the market in power ratio. they turn their ratings into revenue better than anybody in indy. even when their 12+ was down to a 2.9 they were still commanding $200+ per spot based on their experienced veteran sellers. a source of great pride for little steve fartley. he can't wait for the miller kaplan.
RDO said:
I don't remember what Entercom paid for the MyStar properties, but Entercom didn't buy only sticks. Entercom also bought the intellectual property from MyStar. Granted, they threw away the intellectual property at WTPI pretty quickly, but they still paid for it. My point is that you have to have intellectual property to sell in order to get significant money for your stations.
Today radio stations are valued by their signal potential. Also, the population covered. A Cincinnati Class A CP unbuilt sold for 18 million dollars.
Flying-Dutchman said:
Yes and no. Signal potential is one of the factors used to value radio stations, but it's far from the only factor. Cash flow multiples, which aren't normally factored in without intellectual property, are actually a much better indicator of a radio station's value. That class A in Cincinnati, by the way, was to be located (and was later built) right downtown. So, it's actually a very good signal that went for $18 million, and that seems like a reasonable price for just a transmitter and a license in Cincinnati. A full class B license and transmitter wouldn't have gone for much, if any, more than that. That class A also would have gone for a lot more if it had come with an established format. Remember, Radio One also paid roughly a third of the purchase price of 100.3 for the format of WMOJ 94.9. When you see how much the "Mojo" format was worth, you can see how successful intellectual property raises the value of stations well beyond "stick value."
There is simply no way stick value alone will get you north of $30 million in Indy. If anyone can find an operator who will pay that for just a transmitter and license in Indy, I'd like to speak with them about some land I own! As I mentioned before, you'd be lucky to get half that on a full class B without including intellectual property. It might have been easy to get $15 million, though not much more, for a class B with no intellectual property in Indy two years ago, but it would be a little tougher now that station prices have fallen.
Timewarp said:
You're right in the sense that they'd force you to buy the intellectual property, too, which would drive the cost up substantially. WFBQ, for example, would be worth a lot more than $30 million, but only if you included Bob & Tom and the rest of the format. Media Services Group expects stations to go for between 9 and 11 times cash flow this year. That's actually down from the 12 to 14 times cash flow, which is where stations were trading a couple of years ago, but it's still a good multiple.
I just can't name an FM station in this State that sold on the old fashioned cash flow formula since
the passage of the Telecom Act of 1996. Licenses are way way way over-valued. This is shutting
most Americans out of station ownership. Even if an FM station is losing it's butt, you won't buy it
cheap.
the passage of the Telecom Act of 1996. Licenses are way way way over-valued. This is shutting
most Americans out of station ownership. Even if an FM station is losing it's butt, you won't buy it
cheap.
Timewarp said:
You're not thinking very hard, then. Almost all, if not all, stations in Indy that sold since 1996 were based on cash flow multiples. Here's an example: WTLC 1310/105.7 went from Panache to Emmis for $15.1 million in 1997. If you go a little further back to the WIBC/WKLR purchase by Emmis from Sconnix, that combo went for about the same price. The SFX/Secret Communications deal in 1996, when WRZX, WNDE, and WFBQ along with clusters in Cleveland and Pittsburgh were sold was for $300 million, was based strictly on cash flow, and there was what amounted to a penalty in the deal if the cash flow of the company dropped too low on Secret's watch.
I do agree with you that the high cost of stations is shutting a lot of people out of broadcasting. However, it's not so much because licenses are overvalued than that the cash flow multiples are still too high for them.
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