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FreddyE1977
Guest
412now212 said:
Georgio's at the corner of Pioneer and Brookline Blvd. was another strong contender.
Sadly they met the wrecking ball about 10 yrs. ago in favor of a CVS store.
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WZUM 1590
- Thread starter PHIL Z
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Georgio's at the corner of Pioneer and Brookline Blvd. was another strong contender.
Sadly they met the wrecking ball about 10 yrs. ago in favor of a CVS store.
It would appear that single-outlet pizza shops owned by a sole proprietor are being replaced by pizza chain stores at about the same pace that independent radio stations are being replaced by corporate ownership. And, that independent pizza shops have the same uphill fight for success against the big chains as independent radio stations have against Clear Channel and the rest of the big radio chains.
F
FreddyE1977
Guest
Talk_Dude said:
Sounds like you should be down at Beto's selling spots on WJAS!
I'm all for more radio stations in pizza shops. ;D
In the fall of 2000 I was working late at the Clear Channel complex in Green Tree when I happened to
turn on WZUM, and heard Mad Mike Metro, whom I had met years earlier when the station was WPLW.
I popped a cassette in the recorder and drove down to Pietro's Pizza to see him. We had a nice chat.
That was on October 9. Just three weeks later, he passed away.
C.
In the fall of 2000 I was working late at the Clear Channel complex in Green Tree when I happened to
turn on WZUM, and heard Mad Mike Metro, whom I had met years earlier when the station was WPLW.
I popped a cassette in the recorder and drove down to Pietro's Pizza to see him. We had a nice chat.
That was on October 9. Just three weeks later, he passed away.
C.
Amazing how many comments can be generated by one sentence. Other than this board I've seen and heard nothing about a sale.
I don't doubt the writer's veracity, and I hope he's right. I don't doubt there is word out there of a new buyer for WZUM, and I don't doubt someone out there might be crazy enough to give it another try.
However, given all the obstacles that have to be hurdled, involving a studio location, studio equipment, transmitter location, towers, possible (or probable) FCC sanctions, as well as who all would get a cut of the purchase price (which with creditors might extend all the way from Chicago to Crafton and West Mifflin to Timbuktu), I would not hold my breath waiting for the FCC to post notice of a proposed transfer of WZUM to a new owner.
But what do I know? As I said months ago, with this much going for it, anyone interested in saving it would have to come up with far more money that it would be worth.
I don't doubt the writer's veracity, and I hope he's right. I don't doubt there is word out there of a new buyer for WZUM, and I don't doubt someone out there might be crazy enough to give it another try.
However, given all the obstacles that have to be hurdled, involving a studio location, studio equipment, transmitter location, towers, possible (or probable) FCC sanctions, as well as who all would get a cut of the purchase price (which with creditors might extend all the way from Chicago to Crafton and West Mifflin to Timbuktu), I would not hold my breath waiting for the FCC to post notice of a proposed transfer of WZUM to a new owner.
But what do I know? As I said months ago, with this much going for it, anyone interested in saving it would have to come up with far more money that it would be worth.
I've been doing the math in my head on the costs of rescuing a 1,000-watt directional daytimer (okay,
24 watts at night) from oblivion.
The transmitter site is relatively new (unlike the old towers on Ewing that were on the verge of falling
into the creek) and any problems with the array probably could be corrected relatively easily. Liability
for the FCC violations would accrue to the previous owner, although the new owner would be required
to bring things up to spec.
Studios could be placed in a trailer at the transmitter site, to start, or located somewhere in beautiful
downtown Carnegie, where the rent can't be all that expensive. There may be some issues of unpaid
rent or leases, which (again) would seem to accrue to the previous owner, at least in theory. Reality
might be a bit different.
Starboard overpaid for WZUM and the subsequent owner (the Believe And Achieve Family Educational
Center of Virginia) even more so. The proposed sale of WPYT-660 to Eddie Edwards for $500K (never
consummated) sets a benchmark by which future station prices can be measured.
So, what is it worth? $100,000? $200,000? I'm not a financial guy, so I can't tell. But I would hate
to see this little station die, although admittedly it hasn't been very successful in recent years - or in
recent decades.
C.
24 watts at night) from oblivion.
The transmitter site is relatively new (unlike the old towers on Ewing that were on the verge of falling
into the creek) and any problems with the array probably could be corrected relatively easily. Liability
for the FCC violations would accrue to the previous owner, although the new owner would be required
to bring things up to spec.
Studios could be placed in a trailer at the transmitter site, to start, or located somewhere in beautiful
downtown Carnegie, where the rent can't be all that expensive. There may be some issues of unpaid
rent or leases, which (again) would seem to accrue to the previous owner, at least in theory. Reality
might be a bit different.
Starboard overpaid for WZUM and the subsequent owner (the Believe And Achieve Family Educational
Center of Virginia) even more so. The proposed sale of WPYT-660 to Eddie Edwards for $500K (never
consummated) sets a benchmark by which future station prices can be measured.
So, what is it worth? $100,000? $200,000? I'm not a financial guy, so I can't tell. But I would hate
to see this little station die, although admittedly it hasn't been very successful in recent years - or in
recent decades.
C.
cingram said:
I was taught over the years by people who work in banks on commercial loans that the rule of thumb for buying any sort of business, whether it's a radio station, restaurant, convenience store or anything else, is to never pay more than three times the total, annual revenue the business generates, or is likely to generate if it's a start-up. If the total revenue over three years will pay off the purchase price completely, then that's an indication that there's enough revenue stream to pay off the loans to buy the business and still have a profit. There's a whole lot more details to it than just that, but this is just an internet forum post, not a book. Having said that, it does seem like a good starting point.
So, given that re-starting WZUM is basically starting a whole new station from scratch, what is a reasonable expectation of total revenue generation by such a station over the course of the first three years of operation? What do other 1,000-watt directional daytimers with 24 watts at night generate in this area?
F
FreddyE1977
Guest
Someone I know who is in the M&A business tells me 4x EBIDTA is pretty typical on
deals right now. Some going as high as 6x. Knowing the long-term uncertainties
I am guessing that radio stations trend below average.
deals right now. Some going as high as 6x. Knowing the long-term uncertainties
I am guessing that radio stations trend below average.
FreddyE1977 said:
That makes sense. Four to six times EBIDTA might be right for bottom-line price, while three times EBIDTA would be a reasonable ceiling for a bank to give a loan, as the bank wouldn't be willing to finance 100% of the purchase.
Of course, there's also the issue of a Charles Foster Kane-type who has enough money he made doing something else who just wants to play in the radio business. You figure, there are billionaires who'll sink millions into racing yachts, pro sports franchises, and other such "hobbies", and treat it the way ordinary folk treat building a model train setup, or building a street rod.
I'm a little surprised that some mega-rich rock star hasn't bought a few radio stations as a hobby. Rock stars often throw away money. Why wouldn't someone like Bruce Springsteen or the world's richest rock star, Paul McCartney, sink half a million into a radio station?
Russell Simmons spent $2,000,000 for his own personal movie theatre. McCartney did spend $170,000 on a fence to keep wild boards away from his farm. Billy Joel paid $2,000,000 for a yacht that he only uses to commute from his home on Long Island to New York City. Paul Simon invested $3,000,000 on a Broadway play that bombed. Rod Stewart paid $100,000 for a soccer field. Mick Fleetwood estimates that he spent $8,000,000 on cocaine, though he probably doesn't have any receipts.
Imagine if some of those guys, who are having a hell of a time getting their new recordings played on the radio, just went out and bought some radio stations so that their new songs would be played on the air?
Of course, I doubt if any of them would want a 1,000-watt directional daytimer that drops to 24 watts at night, or anything on the AM band, for that matter.
Actual station owners who are famous for making their money elsewhere include:
* Pat Sajak. The "Wheel of Fortune" host owns small stations in the mid-Atlantic region, including at least one AM station with similar facilities to WZUM.
* Stephen King. The world-famous horror author owns stations in his home area (Maine), including an FM rocker known on the air as "Stephen King's Rock n' Roll Station" (WKIT/100.3).
http://zoneradio.com/wkit/index.shtml
His AM there (WZON/620) was the Bangor market's sports station until a recent flip to progressive talk.
* Pat Sajak. The "Wheel of Fortune" host owns small stations in the mid-Atlantic region, including at least one AM station with similar facilities to WZUM.
* Stephen King. The world-famous horror author owns stations in his home area (Maine), including an FM rocker known on the air as "Stephen King's Rock n' Roll Station" (WKIT/100.3).
http://zoneradio.com/wkit/index.shtml
His AM there (WZON/620) was the Bangor market's sports station until a recent flip to progressive talk.
OhioMediaWatch said:
Thanks for those examples. I wasn't aware of them. I was only guessing that there might be owners like that. It could come to pass that there might be more "vanity" radio stations like those than regular commercial radio stations someday.
Does the guy who took over operation of what used to be WPTT and turned it into WMNY fit that model? And is it still operating as WMNY?
No guy took over operation of WMNY, it is still owned by Renda. There is a guy leasing the afternoons which does sortof fit the format on there. Basically he just likes the ego trip hearing himself mumble on the air while wasting his money.
PGHsalesguy said:
I didn't realize that guy on the afternoons was just leasing afternoon time. I thought he was a Renda-hired consultant brought in to take charge of operations.
Parttimer said:
No wonder they're in such deep doo-doo. Paying ten times cash flow is a stupid thing to do in any industry, but especially in a declining market.
Talk_Dude said:
Understand it wasn't declining when they paid that much, but still, their willingness to pay was based on some badly flawed assumptions about how much they could grow revenue. Some of it was just projection, some of it was assumptions of creating a monopoly. They didn't realize people wouldn't pay in ad rates what they wanted to charge, nor did they forsee the trends in new media.
The bottom line is, as you said, deep doo-doo.
Talk_Dude said:
It should be noted here that both Sajak and King are considered professional radio operators, and probably shouldn't be considered "vanity owners".
Sajak has a few small AM stations in Maryland, I believe, and actively runs them.
So does King with his 3 station cluster in Bangor. He actually fought a university there, trying to retain play-by-play rights to their games when they moved to another operator in the market.
Not exactly "a bored rich guy playing radio" in either case.
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