WGMR for sale, and the (lowball) offers are in!

[Spackler1]

It isn't a secret that WGMR is for sale. It was announced in an internal newsletter that is regularly distributed to current and former employees. It isn't a surprise that there are multiple bidders, but apparently some of the offers are unusual or downright insulting, according to my sources.

It's interesting that Forever Broadcasting, arguably the market leader, first decided to offer not cash, but a trade: WOWY and WBHV for WGMR. Hey wait, Forever doesn't own WOWY and WBHV. Gee, how can they offer to trade stations that they don't own or operate? That offer was quickly (very quickly) dismissed by WGMR ownership, from what I hear.

Also interesting: The two lowest offers come from the two highest profile groups in town, Forever and First Media. When Forever came back with an actual offer that didn't involve a swap, they wind up near the bottom of the pile - a million dollars less than the leading offer. And, it was some kind of half now, the other half in a year sort of deal. This is the company that dropped major cash on 96.5 in Johnstown years back, and ended up the most of the Dame properties a few years ago, and they can't afford to front the cash for WGMR, a 50k watt sleeping giant? Are they in that much trouble?

WGMR ownership is selling a station in Chambersburg to a State College owner. Will that guy end up the frontrunner in the WGMR sweepstakes? Or will the Allegheny Mountain Network just take the money from the Chambersburg sale, put it into WGMR, and sit on it for a while? I've heard that a format switch isn't out of the question, and Classic Hits and Country are two of the options being floated.

It should be interesting.

 

[fryman]

I know that Pompa Publications and Broadcasting has been looking to pick up some more property but more to the Johnstown area. Pompa himself was recently spotted at a Curve Media day event but he was more tight lipped than usual and would only say that he's in the business for the longhaul. Pompa was also spotted in both the Indiana and Pittsburgh areas last week but refused to say whether he was there on business or pleasure. He was wearing a suit if that means anything.

 

[Broadcastress]

Those stations, GMR and the rest, have been for sale, not for sale, for sale and then not for at least five years.GMR has little in sales and lots in upgrade costs for a new owner. Forever has tried to buy GMR over and over only to be rebuffed. And now forever is in a dilemna (see the post on this entire matter) the station is for sale but their own sales are reported way off in state college and in their other markets so that they are in no real position to buy for what GMR owners want. And they certainly do not have management or man power to add it to their poorly performing group.

 

[mock3]

I would love to see another family run operation purchase the station; however, I'd really hate to see someone put up the cash, expecting to get a return. Nothing against the station--it has a killer signal--but I don't see radio turning around anytime soon. As more delivery methods become available the actual FM signal will continue to decrease in value. The focus needs to be on the programming product. I'd drop all of the syndicated stuff and do an AC format with a lot of local information from local people. There is a hole for that in State College. Perhaps focus on some of the newer Soft AC: Landon Pigg (I love that coffee shop song), Sara Bareilles, Jordin Sparks, One Republic, Dido, Five For Fighting, K.T. Tunstall, Maroon Five, etc. Being that this is a college town, it might be wise to mix in even a little more of the adult alternative stuff like Yael Naim (think Apple spot), Tristan Prettyman, Jason Mraz, Coldplay, Jack Johnson, and Spoon (I love spoon).

Recovering your investment in the actual FM signal needs to be done very soon--maybe within just the next several years--before wi-max delivery methods take over. And based on the economic outlook...it is going to be difficult to get that quick of a return.

That's all my opinion...and some hearsay. Feel free to post your own...you might think different.

 

[jraynar]

Ted Simpson posts on here from time to time, hopefully he or AJ will confirm. For what its worth, I hope they aren't selling, I worked for them on and off when I was in college, and had some good times on Heister St.

If they are selling, they should not let anyone low ball them. That's a massive signal that delivers both Altoona and State College, which only the Frog can do. It's worth more than most stations. Don't buy into that 10 X annual cash flow BS. That stick is worth some serious dough!

 

[jackandcoke]

"1983 Lincoln Continental. Needs new engine, transmission, fuel pump, some body work. Cloth interior shredded with coffee stains & cigarette burns but otherwise okay. Does not run. $43,000 firm."

I know, not fair. But it's not a bad analogy. "Stick values" disappeared 20 years ago, when the FCC flooded the market with "sticks." In a one-county market like SC, where every FM covers the whole market, there's no advantage to their bigger signal (if there was an advantage it would have shown up somewhere along the line).

Now the college kids say FM is what they used to listen to in junior high school, the economy is on the edge of plunging into a depression and nobody can get a loan to buy anything.

Timing may not be everything, but it comes in pretty high on the totem pole.

 

[Stranger]

The median age of the people this signal reaches is somewhere around 40. This is an underserved demographic here and elsewhere. Why waste effort and money with the younger listeners who think or radio as a granny medium and who already are being courted by every FM in the area?

Any new format should skew older. I'm not talking about "The Benny Goodman Hour," or "Mantovani for Millions," but there's plenty of room between that stuff and Chris Brown and Miley Cyrus.

 

[jackandcoke]

The median age of the people this signal reaches is somewhere around 40. This is an underserved demographic here and elsewhere. Why waste effort and money with the younger listeners who think or radio as a granny medium and who already are being courted by every FM in the area?

Any new format should skew older. I'm not talking about "The Benny Goodman Hour," or "Mantovani for Millions," but there's plenty of room between that stuff and Chris Brown and Miley Cyrus.

What you would do with it is a whole 'nother subject.

The question is "How much do you pay in an over-radio'ed market for a small-market station (WGMR) that has very few listeners, very little business and no cash flow." 20 years ago when there were still only a few FM stations in SC, the answer would have been several million dollars and if they had put it on the open market at that time there might have been a bidding war taking the selling price into an astronomical range.

Today?

 

[radioboss]

There are only two groups in the immediate area that would deserve this beautiful signal.

That being Magnum Broadcasting and First Media.

In my opinion, I could see Magnum being the better owner that would nurture and utilize that station better than anyone.
First Media is not a bad company; but, what a duopoly it would be with 3WZ and G101.

In the case of Magnum getting 101.1; I would immediately put JOE FM on 101.1 and then, think about a Hot AC or CHR format on 105.9 and 106.9.

Immediately, radio folks like some of us can relate back to the days that 101.1 WGMR was THE COUNTRY GIANT!

Unfortunately, WGMR ran when they heard Froggy was coming to town. Since then, being everything to everyone over a long period of time.

 

[Radiogal4u]

While some posters are imposters, posting poor postulations, here's the skinny you want. That's right, I am back from the blogmire and maybe a new radio blog sight. Got info...get intouch.
<<<>>>


Mr. Simpson, a radio enthusiast, a nice guy, a gentleman, has a group of rag tag radio stations that he put together over many years on a shoe string. None of the stations ever reached their potential. WGMR is one of those stations.

Around 1998 radio values were increasing, reaching their zenith about 2004. Since then the big multiples have past and radio prices have declined. During recent years there have been many interested parties with offers in hand for WGMR. The Whateverforradio made overtures on several occasions. Madame frog took her lilly pad to Tyrone practically cracking her face as she forced a smile in an effort to make inroads to purchase the50kw signal. Frogguyconfer also tried to be a buddy but Mr. Simpson was just not impressed. First Media sniffed around awhile, looking at this checking out that, and finally tendered what was seen as a low ball, and I do mean low ball offer for the property. Then there was the successful cable operator who appeared to have the capacity to offer up a hefty offer. But WGMR and the other stations just did not have the returns the cable guy wants. And there have been others, many others. But, alas, always a brides maid, never the bride. (Which is not a problem that I have)

That brings the story up to now where it appears Mr Simpson has changed his mind from “Let’s Hold on to what we got, don’t let go cause we got a lot” to “we gotta get out of this place, if it’s the last thing we ever do!”

Whateverforradio wants the property not so much because they really want the property for themselves. It’s more of a blocking move. They do not want another owner to get hold of a signal that could literally rock their warts off. They already have enough problems in the State College market.

What about Magnum? Well at this juncture they appear more Magnum *** leveraged. The Hound never produced the way it was expected. It may be time to turn that dog back to the pound. (It ‘s been reported that the former owners still carries significant paper on that Magnum purchase) Magnum owners may have the desire, and they are good operators, but money may hold them back.

First Media sees itself in the catbird seat. But they have no intention to pay the price that Mr Simpson is looking to get. They are doing well in the market without a big capital investment. For them Magnum is a not a threat, Whateverforradio appears to be suffering from self-inflicted wounds in the market so no need for First Media to be hasty.

And that my radio colleagues begs the question: What is the price for WGMR. It is reported that Mr. Simpson two years earlier wanted $5MM for WGMR or $15MM for all the stations. Maybe there’s oil under them there radio towers. But, alas, the reality of the current radio market is coming clearer for Mr Simpson. He may be persuaded to part with WGMR for say $3MM, no? how about $2.5MM, $2MM? Hey just make a solid offer. But that might be a ways off in a market where there are just too many radio stations, too little radio advertising dollars and no one with money who is all that interested. At least not right now. Besides State College isn't Harrisburg or Pittsburgh.

So once again we see that timing is everything. That is particularly true for radio.

 

[Radiogal4u]

I would be remiss not to point out that the comments and observations in my preceding post are based on information that I have received from the most peculiar of sources as well as my own observations. My comments, opinions and observations should not be repeated to anyone at anytime so as to avoid panic or despair. Because, it’s a small world after all.

 

[fryman]

WGMR hasn't been the same since "Mean Gene" ,the big rig driver, did the all nights.

 

[Stranger]

Jack/coke: what you'd pay and what you'd do with it are not entirely separate issues. If you look from the seller's viewpoint, sure, the only question is "what do I get for my license and stick." But from a buyer's perspective, you have to figure a year's worth of operating expenses into what you're going to spend, and as you know the cost of putting on formats varies from zero to plenty.

You also point out that every existing local FM physically covers SC, which is true. With a signal like G's you'd have to think wider than State College. But in this case, the largeness of the signal can be a disadvantage, in that the communities it serves are so different from one another that what appeals to one may cause tune-outs in others.

Radiogal: First you post an encyclopedic, excellent and very public assessment of the region's radio, then follow with a "pay no attention to the person behind the curtain." Ummmm. I suspect most of us will ignore the follow-up rather than the original.

As you and others have pointed out, license values are sinking. So if the thing was worth, say, $5 million a few years ago it may only be worth half that now. What will it be worth in two or three years? No one knows. More? Less? Same? Can the present owner afford to run it in its present shape? I have no idea, but I suspect the answer is yes. First, it's a good station, well programmed, and easy to receive, and with a reasonable number of listeners. Second, they can't be spending a whole lot to run it.

There is way too much media per capita around here, as you point out. And the dominant radio company is a troubled outfit, with most of its troubles self-induced. The root of that self induced trouble probably makes them a bad bet for additional financing it would take to buy G, either to try to build it up or as what you called a "blocking move." (No one's going to take a note from those guys and banks these days are not exactly handing out money.)

The other companies may have better access to capital and have demonstrated by their products that they know how to make radio.

Radioboss: You neglected to nominate yourself as among the possible buyers. I'm wondering why that is.

 

[clangham]

101.1 WGMR was THE COUNTRY GIANT


No, WIYQ was the country giant. WGMR was We're Good Mountain Radio.

Ah yes, those were the days! ;D

When I was young and in radio.

 

[jackandcoke]

Jack/coke: what you'd pay and what you'd do with it are not entirely separate issues. If you look from the seller's viewpoint, sure, the only question is "what do I get for my license and stick." But from a buyer's perspective, you have to figure a year's worth of operating expenses into what you're going to spend, and as you know the cost of putting on formats varies from zero to plenty.

In most cases I'd agree. In this market, though, with so many format changes in the past 5 or 6 years and so many FM stations currently running with almost no sales, it's a snakepit. Billing figures aren't public, but if you listen around the dial in SC there have to be a half-dozen stations right now running very few spots. Shoot, the Forever folks even deleted a perfectly good FM (107.9) from the commercial arena and there still isn't enough to go around.

If you go in with definite format ideas you could find yourself with several direct competitors in the blink of an eye. When stations have nothing to lose by changing formats anything can happen. So any buyer eyeing GMR needs to have a "Plan B," a "Plan C," a "Plan D," et cetera, or very deep pockets. When that's the case, there isn't any room for error. And over-paying for it would be critical error.

It really isn't that much different from what most of the nation is going through in the housing market. Millions of people are now living in homes they paid $200,000 for that are now worth $140,000--in the middle of developments littered with other homeowners in the identical position. Expecting someone to waltz in and pay $250,000 for such a house is a daydream. Oh, yeah, and banks have stopped lending money to anybody, for anything.

They should have sold five years ago.

 

[ratingsgeek]

That's all real interesting, but price alone might not be the biggest factor, anyway. As longtime broadcasters they might place more weight on other factors, like selling to other good broadcasters.

One thing is for sure. Only they know, and the rest of us are only guessing.

 

[#%*#)%*#@)%#$]

101.1 WGMR was THE COUNTRY GIANT


No, WIYQ was the country giant. WGMR was We're Good Mountain Radio.

Ah yes, those were the days! ;D

When I was young and in radio.

How long ago was 101 country? Did it play old and new country?

Where is WIYQ on the dial? Is it AM or FM ?

Thanks

 

[clangham]

I never really worked on GMR too much, but maybe Ted or John can enlighten you on that history.

WGMR and WIYQ were both 50k stations owned by the Allegheny Mountain Radio Network

WIYQ at 99.1 FM was back in the 70s to mid 80's for contemporary country favorites, then changed around 87-88 to top 40/rock hits. It was then sold I believe in the mid 90's to Dame Broadcasting and then Forever? I think Rocky99 is on there now.

101.1 WGMR was THE COUNTRY GIANT


No, WIYQ was the country giant. WGMR was We're Good Mountain Radio.

Ah yes, those were the days! ;D

When I was young and in radio.

How long ago was 101 country? Did it play old and new country?

Where is WIYQ on the dial? Is it AM or FM ?

Thanks

 

[ameyer]

I'll dump my 2 cents in the hat...yes it is for sale, has been off and on for quite some time. That's all I will say though cause I think it is fun to watch the speculations, and if I told you all the truth, well then I wouldn't have anything to chuckle about later while eating my hungryman dinner!

 

[mdonovan]

ah the days of mean gene......throwing the switch to catch mutual news.....the mystery artist contest....remember them well....radio rich.....(mike d. to rich...."why r u playing r.e.m. driver 8?") those were the days