WCVO buys WRFD

[Bill Harmonic]

AllAccess reports that Salem is selling WRFD

"SALEM COMMUNICATIONS is selling Religion WRFD-A [EDIT] "


[EDIT-post truncated because originating material is copyrighted. Unauthorized use of copyrighted content is in violation of Radio-Info's TOS.]

 

[G Thompson]

Is Dan Craig Still Over there?

 

[xmusicmatt]

WOW! That totally suprises me. I know CVO likely has wanted a place to put Promise Radio Network or the ProTalk programming they have but I would thought they would rather have a 24/7 station not a daytimer.

Will be interesting to see what changes CVO makes to WRFD. (minus the staff cuts I am sure).

 

[michiana_media]

Im not real surprise about this...

Since Salem has failed to get a good FM signal, they have been wanting to get rid of this station for quite awhile and it just seems like a good fit. My guess is that 880 will become the flagship for "The Promise Radio Network".. "880 The Promise" does sound good.

Also, http://www.promiseradionetwork.com/ states that the Newark station will be coming soon.

 

[RickF]

2 months ago WCVO had no money to buy 95.1 WVXG. They must have hit a scratch off ticket. Seems like a lot of cash for a daytime station.

 

[xmusicmatt]

2 months ago WCVO had no money to buy 95.1 WVXG. They must have hit a scratch off ticket. Seems like a lot of cash for a daytime station.

It's likely possible that looking at the cost (We dont know the figure) for WVXG out weighed what they could have got on return being a rural area and would have problems selling both commericals or gaining donor support.

WRFD-AM is established in the Columbus Market as others have said and I am sure all the programming on there is paid for by the ministries on air outside the salem talkers they do run, and WRFD-AM also runs commericals which does bring in more money outside the minutes the paid preachers/ministries are on air.

All WCVO has to do is pay tower rent (their on the WCOL-AM tower I beleive near the current Clippers ballpark) and I am sure they will run it out of the same studio they use for Promise, Pro Talk and River Radio Network Voice tracking so it wont take much work at their end just another automation PC in a rack.

With low overhead and the client base they already have it seems like a win win situation even at a few million.

They can also use some of the WRFD Sales staff to help booster sales for WCVO and likewise. (Buy an ad at this rate and it will air on WCVO and WRFD hitting both nitches)...

 

[del_griffith]

Let's hypothetically run some numbers.

What do you guess WRFD currently bills on average per month, including brokered programs?

How many of those brokered programs are pure cash for 1/2 hour bought vs some sort of direct response compensation? Was Salem about to get a bigger bang for the buck vs what CVCO will be able to command for the same or similar programs? And will the combo cause some erosion in billing because of the buy A get B included mentality that may come about? CVO for example has salable Arbitron demographics. WRFD doesn't. My guess is WRFD's direct sales is more identification sales driven vs tangible traditional Arbitron demographic sales.

2 months ago WCVO had no money to buy 95.1 WVXG. They must have hit a scratch off ticket. Seems like a lot of cash for a daytime station.

It's likely possible that looking at the cost (We dont know the figure) for WVXG out weighed what they could have got on return being a rural area and would have problems selling both commericals or gaining donor support.

WRFD-AM is established in the Columbus Market as others have said and I am sure all the programming on there is paid for by the ministries on air outside the salem talkers they do run, and WRFD-AM also runs commericals which does bring in more money outside the minutes the paid preachers/ministries are on air.

All WCVO has to do is pay tower rent (their on the WCOL-AM tower I beleive near the current Clippers ballpark) and I am sure they will run it out of the same studio they use for Promise, Pro Talk and River Radio Network Voice tracking so it wont take much work at their end just another automation PC in a rack.

With low overhead and the client base they already have it seems like a win win situation even at a few million.

They can also use some of the WRFD Sales staff to help booster sales for WCVO and likewise. (Buy an ad at this rate and it will air on WCVO and WRFD hitting both nitches)...

 

[GovernorV]

Del - RFD is a cash cow. The pay-for-play stuff that runs during the meat of the day M-F is pure pay. The infomercials and such, yeah, response driven. But the programming itself makes serious bucks. 2-1 is my guess programming revenue vs. spot sales... This is a good money decision for the crew in New Albany.

 

[gabigley1]

On the front page of this web site.

Salem sells Columbus AM daytimer WRFD (880)

"Word 880" is a standalone for Salem Communications, which has owned it for many years and now sells it for $4 million to Ohio-based Christian Voice of Central Ohio. That will give Christian Voice an AM to complement its contemporary Christian "River" WCVO-FM (104.9). WRFD operates with 23,000 watts daytime, and its sale was brokered by Greg Guy of Patrick Communications, working for buyer Christian Voice. Salem reports its latest quarterly results tomorrow afternoon (August 6).

Thanks Del. I suppose that would have been a good place to look.

Interesting.

Not really. It was a stand alone operation. I believe at one time they were responsible for stations in Cincy and Detroit, but that was not the case currently. With Salem's cluster mentality, they really had become a red headed step child.

And no one in their right mind would pay 4 million for a daytimer with no real estate. So when the bigger fool arrives at your doorstep, you take their money, smile and say thank you and believe God was smiling.

Every day that passes, it is tougher to make money in the world of AM radio. Having a daytimer only complicates something that is already tough from the get go. What else can the station do besides brokered Christian and put to the bottom line what it already puts to the bottom line? The station languished for years, going back to the late 60's when Nationwide owned it. Salem's acquisition probably saved it from extinction.

The big question is will CVCO be able to maintain or improve the preach and teach contracts already in place? Or will they lose leverage when these programs come up for extension or renewal and see revenue decline?

WCVO-FM must be of sentimental value to the Christian Voice because they did not
want to sell their station after being approached by Salem Communications.
Maybe Salem Communications wasn't willing to pay the amount Christian Voice
wanted for WCVO-FM?

This is what Salem Communications CEO Ed Atsinger has to say of the sale of WRFD
to WCVO Christian Voice. He is quoted in this Radio Ink story:

http://www.radioink.com/HeadlineEntry.asp?hid=143095&pt=todaysnews

(QUOTE)
"We have long been convinced that consolidating these two stations under one ownership would strengthen the position of both stations," he said. Salem negotiated to buy WCVO from Christian Voice, but the company is based in Columbus and didn't want to sell, so Salem approached the deal from the other side. Atsinger said of the sale, "We're pleased with the deal. It works for both of us."
(QUOTE)

 

[del_griffith]

In their quarterly conference call with financial analysts, Salem said they sold WRFD for about 9X cash flow. Cash flow is one of those wiki-wiki words that can mean so many different things.

Did cash flow include the rent for the office space and tower space on 1230? If not, I understand they pay a pretty big nut for the digs on High Street. But if that is included, then yes, RFD is a pure cash cow.

 

[JohnboyCrenshaw]

"Cash Flow" is generally defined as revenue minus expenses. (Keeping it simple here, folks, i.e., depreciation.) Lease amounts, tower and/or office, would have to be on the "expense" side somewhere.

I believe the government is the only entity that gets away with "off-budget" items.

JbC

 

[del_griffith]

J-Boy: I agree with the standard definition of cash flow. But I've seen too many broker offerrings that have so many themes and variations. I recently saw one for a small town station. A significant portion of key component of standard cash flow equation was not a part of the number. At a small town station, that is huge.

 

[JohnboyCrenshaw]

Del-G:

As a publicly-traded company, I rather doubt that any broker-based sales minutae would work its way onto the Salem quarterly call.

What kind of financials would lead you to this scepticism? Electricity being included in a below-market average rent that was paid to a sererate company controlled by the licensee? (For example, that is.)

Just wondering,
J-boy

 

[markbohach]

Del-G:

As a publicly-traded company, I rather doubt that any broker-based sales minutae would work its way onto the Salem quarterly call.

What kind of financials would lead you to this scepticism? Electricity being included in a below-market average rent that was paid to a sererate company controlled by the licensee? (For example, that is.)

Just wondering,
J-boy

I can chime in on this one.

I've seen financials for stations (supplied by brokers) that had "management fees" assessed where items like traffic and accounting were handled from a mother office. Another instance had a GM splitting his time among three markets.
These costs assessed were far less than the individual station would have as a standalone. Thus, the station's cash flow showed higher than it would have been it it had to operate as an indepedent

As a mom and pop operation, (no need for outside engineering, tax accounting, traffic and billing services) our station would show an unrealistic cash flow to a potential buyer. These are line items that should have a dollar amount assigned.

MB

 

[del_griffith]

Mark:

You overall summed up the response Johnboy was looking for from me.

You've really got to look at what makes up the numbers.

As I don't know how Salem did their numbers, I'm going to assume they met GAAP since they are publically traded. But because I'm not an accountant, I am not sure what they meant by a multiple of cash flow.

 

[JohnboyCrenshaw]

Chime and Del-G appreciated!

Yours in cash flow,
JbC

 

[willcail]

What, WCVO have money to buy WRFD? Now WCVO is going to be loosing money twice as fast. Then on the other hand that WCVO FM will manage the station better than Salem ever have.

 

[gabigley1]

The FCC has approved the sale: http://fjallfoss.fcc.gov/cgi-bin/ws.exe/prod/cdbs/pubacc/prod/app_det.pl?Application_id=1260602

 

[willcail]

So WCVO FM witch doesn't make any money some how scrape enough cash together to buy a day timer station that can't get a full share in the radio ratings.

 

[nmoore6676]

So WCVO FM witch doesn't make any money some how scrape enough cash together to buy a day timer station that can't get a full share in the radio ratings.

Likely making money is not the end all for the religious broadcasters. I remember when WEEC went on the air in Springfield and WFCJ in Miamisburg. WEEC started commercial then became non-commercial while WFCJ was never commercial and they have both been continuously on the air for over 40 years. Today a lot of small AM stations are going religious (like WBLY/WULM) all over so expect more in the future. Basically I see a world with Clear Channel (and their kin) along with the God Squad taking a lot over of spectrum space, especially as local economies suffer from the vagaries of the nation’s commerce.