Tuesday, November 24, 2009

New station comp in our "What's it Worth?" series

Last month, I profiled the ten most meaningful radio transactions (with sale prices of $5 million or more) in 2009, in an attempt to focus in on current station values. (See http://georgereedradiotv.blogspot.com/2009/10/whats-it-worth.html).

Today, I add one more to the list, Bill Saurer's Principle Broadcasting's purchase from the Aloha Station Trust of KCNL in San Jose):

Market: San Jose

Sale Announced: 11/09

Calls: KCNL

Buyer: Principle Broadcasting

Seller: Aloha Station Trust

Market Rank: 35

Price: $5,000,000

Pop Count: 2,032,316 (BIA)

Cost per Pop: $2.46


This sale represents the lowest cost-per-pop for the year; it should be a good purchase for Principle. So does that mean that station values continue to fall? I don't think so. I maintain that the "market" is 6x to 8x BCF for cash flowing stations, and $2.50 to $3.50 per pop for FM sticks. Trading discussions continue to pick up, and a number of sellers are now willing to provide seller financing. That bodes well for a pickup in trading activity in first quarter of 2010.