WCMF & WPXY Go To Entercom

[Call Me Sherlock]

Informed sources report that WCMF and WPXY have been picked up by Entercom with other stations in the cluster going to an
as yet, unidentified, buyer.

What do you hear?

 

[unverviking]

D&C has it covered today online... Tony & Dee being sold, so it Zone and Fickle... It's all int he article, as are comments from Scott Fybush...

http://www.democratandchronicle.com/apps/pbcs.dll/article?AID=/20070327/BUSINESS/703270345/1001

 

[Mark Giardina]

Going to be a bit crowded over there on Mill Street with PXY and CMF moving from their current location at the HSBC building.

As for the three stations up for sale, WRMM seems to be the one that would attract a buyer considering it's profitability.

So now Rochester has two powerhouses going against each other. Clear Channel and Entercom. Anyone willing to take bets that in the future the rules will change once again allowing for just one company to own most of the high-priced stations in town?

 

[Element9]

Going to be a bit crowded over there on Mill Street with PXY and CMF moving from their current location at the HSBC building.

Wonder if all those egos will fit into one space without a low pressure system being created, reulting in the perfect storm.

As for the three stations up for sale, WRMM seems to be the one that would attract a buyer considering it's profitability.

Well-informed sources say Regent MAY be interested if it can swing the financing. It's Buffalo cluster is doing well and there are former CBS managers in place that know the Rochester market. Street speculation also has has Citadel kicking the tires on WARM, Fickle & The Zone, probably because of the Legrett-Rochester connection. Personally, I think Citadel has its hands full with making the ABC deal work.

So now Rochester has two powerhouses going against each other. Clear Channel and Entercom. Anyone willing to take bets that in the future the rules will change once again allowing for just one company to own most of the high-priced stations in town?

Always the rain cloud , ehh? No. There are too many hurdles. Then again, one might argue that it can't get any worse than it is now.

-9-

 

[Mark Giardina]

Always the rain cloud , ehh? No. There are too many hurdles. Then again, one might argue that it can't get any worse than it is now.
-9-

Come on, I'm not that bad am I? ;D

All kidding aside look at what happened over the past twenty (20) years. I mean had someone told me when I started in this business that two companies could own 99% of all the radio stations in Rochester I would have said that's impossible.

What was impossible then is possible now.

 

[SirRoxalot]

As I finished my second cup of coffee this morning, I noticed a message in the swirling grounds as they settled onto the bottom of the cup. It said:

No more radio consolidation.

Let's hope that the FCC got the same message.

 

[Radknowski]

Lost In Punctuation

As I finished my second cup of coffee this morning, I noticed a message in the swirling grounds as they settled onto the bottom of the cup. It said: No more radio consolidation. Let's hope that the FCC got the same message.

You should have looked more closely at those 8 O'clock Coffee grounds, Rox. More than likely it said, "No! More radio consolidation!" After I read your post, I checked my coffee cup, which Uncle Oskie insists on using as a repository for his daily Hoyo de Monterrey (despite my continued protestations) and it said, "No! More radio constipation!"

SFX: Rimshot

But seriously folks.

What company in its right mind wants to buy Warm and two Class A's and get into the crossfire with Entercom's 4 Class B FM's and Clear Channel's FM's, 50 kW AM AND TV station? What's the exit strategy in a move like that? Every time you turn around, you're making a move to protect your queen (Warm.)

 

[The Voice of Reason]

Of the three stations up for sale WRMM is the only one that I believe would generate a decent price. Fickle and especially the Nerve, according to the ratings, have a smaller audience and I believe generate less revenue than 101.3. It will be interesting to see who picks up the three stations. I would not be surprised to see the new owner make the purchase and then try to sell off Fickle and Nerve to either some religious broadcasting operation, or another commercial company. Time will tell.

 

[ThePickleReport]

Of the three stations up for sale WRMM is the only one that I believe would generate a decent price. Fickle and especially the Nerve, according to the ratings, have a smaller audience and I believe generate less revenue than 101.3. It will be interesting to see who picks up the three stations. I would not be surprised to see the new owner make the purchase and then try to sell off Fickle and Nerve to either some religious broadcasting operation, or another commercial company. Time will tell.

They're not going to be worldbeaters in that market but part of me believes that someone with good personnel and ideas/execution could make a nice cluster out of those three stations. I also strongly believe that a broadcaster that is not as concerned trying to "one up" the competition but instead catering to the underserved or disenfranchised could also make out well.

That's just me.

 

[Obtuse1]

There is the possibility Clear Channel picks up these Entercom castoffs, and jettisons Snap (the former Nerve), in favor of a better signal.

 

[SpareChange]

How much would Warm, Fickle and The Zone fetch as a cluster? Is $60-$70 million an accurate number for three FM's in Market #53? Is it reasonable to say that the bulk of any purchase price would be allocated to Warm? Thank you.

 

[Mark Giardina]

How much would Warm, Fickle and The Zone fetch as a cluster? Is $60-$70 million an accurate number for three FM's in Market #53? Is it reasonable to say that the bulk of any purchase price would be allocated to Warm? Thank you.

Personally I think 60-70K is a bit too high of an asking price. Granted WRMM would fetch a good buck, but nothing close to that. As for the other two stations, tops for both of them might be 15 million. So I'm guessing the asking price for the three stations might be around 50k tops.


Of course the big question is who will buy WRMM, the Nerve and Fickle? It's not impossible that someone could come in a purchase the three stations, then sell off Fickle and Nerve. WRMM is the big prize.

 

[Kent]

A price of $60-70 million is WAY too high. When you consider an entire cluster of four FM stations in market #30 went for $34 million, the spinoffs in a market roughly half that size will be lucky to fetch $25 million. Cash flow will be the deciding factor.

I also can't see Clear Channel buying any of the spinoffs. An attempt to combine the best of those two clusters was tried before and failed. It wouldn't work this time either. I also don't see anyone buying WRMM and spinning off the remaining stations. Although there are exceptions (WBEB in Philly being the most obvious), single station clusters generally don't work. The only way I could see that happening is if someone buys WRMM with the intent of buying some additional stations later.

 

[Radknowski]

Very reasonable analysis regarding $60-$70 million being excessive for WRRM, WZNE and WFKL in Market #53...

Yet, CBS sold its Buffalo cluster in Market #52 for $125 million. Granted, the Buffalo cluster had better stations, 4 Class B's and an AM, with stronger ratings. But it may be that WRRM's EBIDTA and cash flow warrant a $30 million asking price while Fickle and Zone sell for substantially less, say $10 million each.

So maybe $40-$50 million for the three FM's is closer to the target. The real question is, who ponies up the dough?

Wait!!!

One more thing, what format would the buyer run on WFKL and WZNE?

I'd take the better of the two Class A's country and run it like Jack In The Box Country, specifically designed to be a (small) thorn in WBEE's side.

On the other Class A ---and here's something to fire up the Rochester contingent--- I'd program Oldies, primarily 60's and 70's, with theme weekends and a 50's lean on Sunday night to get the doo-wop and greasers warm and fuzzy.

Sorry, but the Oldies station would be run on a shoe-string with a live morning show and local voice-tracking throughout the day (I'm making this austere pronouncement as if I'm the buyer, servicing debt and knowing the WRRM morning show puts a dent in my monthly balance sheet.)

You have to figure that with formats and music being cyclical, in a few years, Oldies will be back "in." Of course, I wouldn't call the station "Oldies." Maybe Rochester's Biggest Hits or Rochester's Greatest Hits. And I'd try to get the WBBF call letters back from the Buffalo AM that has 'em now.

Hmmmmmmmm. You don't think Citadel copped the WBBF call letters thinking that sommmmmmmmmedayyyyyyyyyy, they just might buy into Rochester and move the call letters back to one of their newly acquired properties.... nahhhh... that's stuff for conspiracy theorists... I'm a house painter.

Hey! Mayyyyybe we could get "Just Call Me Sherlock" to voice track a few weekend shifts! The original 60's Guy!

 

[Kent]

Very reasonable analysis regarding $60-$70 million being excessive for WRRM, WZNE and WFKL in Market #53...
Yet, CBS sold its Buffalo cluster in Market #52 for $125 million. Granted, the Buffalo cluster had better stations, 4 Class B's and an AM, with stronger ratings. But it may be that WRRM's EBIDTA and cash flow warrant a $30 million asking price while Fickle and Zone sell for substantially less, say $10 million each.
So maybe $40-$50 million for the three FM's is closer to the target. The real question is, who ponies up the dough?

Here's more on how I come up with $25 million. It's not just the CBS Kansas City stations going for $34 million despite more revenue and better properties. The CBS Buffalo cluster sold for $125 million. That was reported to have been roughly 12 times cash flow, which is the standard multiple that determines sale prices. In other words, the second place cluster in Buffalo barely did $10 million. Only one of the stations is likely to have done better than $2 million. Rochester is roughly the same size. Aside from the Christmas boost, WRMM did about as well as WJYE did. So, to think WRMM did around $2 million would be reasonable. The other two stations don't likely add much to the total cash flow. Given that Entercom is probably looking at a maximum 12 times cash flow plus the fact that they have to sell those stations, you're looking at a seller's market. That tells me Entercom should break out the champagne if they get $25 million.

As for who gets the stations, it's anyone's guess at this point. I've heard a rumor that Citadel would like to swap some of its excess to Entercom for that cluster, but that's just rumor. A lot of those stations aren't worth much and aren't really located in markets that interest Entercom, though I could see it happening simply to get Entercom out of a jam. Entercom would probably be pretty happy if it could swap those stations as opposed to selling them outright. A swap would not only mean a tax free transaction but also that Entercom could potentially get more than they could with a sale for cash, which, as I mentioned, I can't see getting better than $25 million.

 

[The Voice of Reason]

Citadel would be the logical choice to purchase WRMM and the other two stations. However it would not surprise me if Citadel would turn around and sell off the other two stations to some religious broacasting chain for big bucks and just operate WRMM. While I'm sure Mike Doyle isn't pleased to sell off his "baby", Fickle, neither Fickle or the Nerve did that well in the Rochester market, ratings wise that is. WRMM on the other hand has been around for so many years now and is used a background music at doctors and dentists offices. It's a money-maker.

 

[Element9]

I'd take the better of the two Class A's country and run it like Jack In The Box Country, specifically designed to be a (small) thorn in WBEE's side.

On the other Class A ---and here's something to fire up the Rochester contingent--- I'd program Oldies, primarily 60's and 70's, with theme weekends and a 50's lean on Sunday night to get the doo-wop and greasers warm and fuzzy.

WBEE would murder any Class A with a similar format. Oldies is a format on life support these days. Why would you put Oldies on another cluster station? It would adversely impact WRRM, the queen of the cluster.

Now we know why you're painting houses and hanging drywall.

-9-

 

[SirRoxalot]

Mini-Cluster

I think that some of the previous analysis has merit, but some is a bit off-track...

As far as the value of the Rochester cluster:

WRRM is probaby doing better than $3M in cash flow. It could be worth $35M - $40M alone. The other two are throw-ins, but in the current environment have value as niche players or flankers to protect the cash cows. If a couple of players - like Citadel & Regent - start playing Texas Hold 'em, they could go as high a $10M each. I don't think that will happen, so I'm thinking the whole cluster will go in the $50M - $55M range.

As far as an Entercom - Citadel swap is concerned:

I like the idea. It solves problems for both groups. The downside of this idea is that both companies would like to do ONE deal for the properties involved, not several. I don't see Entercom being interested in ALL the Citadel properties that are up for grabs. Citadel (i.e. Kevin Legrett) would like a foothold in the Rochester market - at least for vanity purposes - but people a lot farther up the food chain will make that decision. I'd say that we're talking an even-money bet at best.

As far as programming is concerned:

WRMM is the 800 pound gorilla. It is the reason we're talking about this deal, but that doesn't mean a new owner won't try to "tweak" things - which may mean some slicing and dicing. If Citadel or Regent get involved, they've got to set up a management structure, sales force, support team, and maybe studio facility. Some of the current folks from CBS/Infinity/Entercom will come with the package. I suspect that both groups would try to oversee this mini-cluster from Buffalo and perhaps share some services between markets. This will not be a simple logistics problem. They'll have to be careful that they don't underfeed the cash cow.

As far as 'ZNE & 'FKL are concerned, I see them targeting 25-54 males so they don't intrude on WRMM. 'FKL may actually be due for a remake instead of a complete rejection. I'd drop the whole "Fickle" thing as ill-conceived (who wants to be known as "fickle"?) and remake the station with a more male-oriented "we're the REAL rock variety station" approach. The Lake seems to be finding its niche with a mix of 1964+ rock oldies, classic rock, and deeper cuts from vintage artists. Take that concept and execute it without the chirps, tweets, lapping waves, and obscure Bob Dylan and you might have something that will get a consistent 3.5 share.

The 'ZNE? How about an "Edge" clone? In fact, I could see Citadel putting Rover down, moving O&A to mornings, and expanding the reach of Shredd & Ragan. Mid-days should be local & live (haven't heard Danni, don't know if she's either, or good). Nights could go live or VT, depending on what station will be board-oping the cluster after 7PM.

 

[Bob1370]

$40 million at the max for the three station cluster, with 80% of it effectively allocated to purchasing WRMM, might make sense.

As to what to do with the others? 93.3 would probably do best by returning to 1964-89 oldies, keeping the current morning show and bringing in a familiar market veteran voice to do a live afternoon show from the get-go (perhaps adding a live midday show for workplace listeners later on if the station starts to get traction). Can't get the WBBF call letters back right now, they're parked on a Buffalo market daytimer, but I think WAXC might be available, and folks who like 1964-89 oldies remember that station fondly.

Automated jukeboxes don't make it in Rochester, period.

94.1? I'd flip it to become the first Spanish language format station in the market. It has a good signal in the city core where most of the Hispanic population lives, and that population has reached critical mass to support a fulltime station profitably. It's only going to grow, and it'll be fiercely loyal to any station that speaks to it directly in its own language (especially while no one else goes to the trouble).

 

[Mark Giardina]

Automated jukeboxes don't make it in Rochester, period.
94.1? I'd flip it to become the first Spanish language format station in the market. It has a good signal in the city core where most of the Hispanic population lives, and that population has reached critical mass to support a fulltime station profitably. It's only going to grow, and it'll be fiercely loyal to any station that speaks to it directly in its own language (especially while no one else goes to the trouble).

Robert,

I agree that automated jukeboxes don't get ratings. Perhaps that is why more and more people are tuning out radio and instead playing CD's in their cars.

As for a Spanish radio station; it would be nice to see that format in Rochester, but I don't see it happening at the moment.

If anyone will go after 94.1 it will be some religious organization. Let's face it; they have the cash to buy it without blinking an eye.