Happy New Year!

Happy New Year to you and your family.

May 2010 see the station transaction market move into Fast Forward!

George
Media Services Group

the live feed: Business model for broadcast TV unraveling

Good piece from James Hibberd's "the Live feed" on broadcast TV's future:

http://www.thrfeed.com/2009/12/business-model-for-broadcast-tv-unraveling-.html

George
Media Services Group

Erwin's Medicine for the Holidays"

FCC attorney Erwin Krasnow has posted his "medicine for the holidays" collection of Holiday Humor.

Go to:

http://gsbholidayhumor.tumblr.com/

You can listen to three mp3s, namely, this year's edition (2009 Holiday Humor) and editions from 2008 and 2007.

George
Media Services Group

Meet the Media Services Group partners: Bill Whitley

From the "Palace in Dallas" comes the one and only Bill Whitley.

When Bill isn't tending cattle at the ranch just outside scenic Seymour, TX, he runs our Dallas MSG office. We worked together back in the Chapman Associates days. When Media Services Group launched twenty years ago, Bill went "independent" for a few years; but he eventually saw the err of his ways and signed on with us eleven years ago.

Bill has been in the broadcast brokerage field for over thirty years. From his Dallas base, he has been active nationally with an emphasis on media properties in the southwest. (None of the rest of us dare do any business in Texas or adjoining states without asking Bill's permission to enter first). Bill has completed over $300,000,000 in broadcasting transactions and personally handled an estimated three hundred and fifty appraisal assignments.

Prior to his brokerage career, Bill worked in television production in Dallas-Fort Worth. In radio, he held sales and management positions in Temple, Dallas, and Little Rock.

Bill has also served as a receiver for broadcast properties in Texas and Louisiana. He has worked with trustees, debtors, creditors and the courts in Chapter 11, Chapter 7, receiverships, and foreclosure proceedings in both a consultant and broker role. He has served as an expert witness in court proceedings relative to broadcast station values in Texas, New Mexico and Arkansas. He has served as a guest lecturer at several universities and has been a panelist on valuation seminars for state broadcast associations.

"Wild Bill" Whitley holds both Bachelor and Master’s Degrees in Radio-Television from his beloved Texas Christian University. "Go Horned Frogs!"

George

Media Services Group

http://www.mediaservicesgroup.com/location.cfm?id=3

New poll on radio station pricing added to blog

Let's try a little experiment. I am asked daily about station trading market pricing (after all, that is my day job). Station buyers and sellers want to know what stations are worth. So I thought it might be interesting to poll our readers on the subject. Though not scientific, it might prove interesting, as our readership tends to be station owners, managers, staff and other folks interested in the broadcast trading market.

To participate, find the poll on the upper right-hand-side of the blog and pick your choice (ranging from five times to nine times).

Here is a related post on the subject of station pricing ("What's it worth?"): http://georgereedradiotv.blogspot.com/2009/10/whats-it-worth.html

Thanks in advance for your participation!

George
Media Services Group

How far does that radio station reach?

If you've ever wondered about the real service area of an FM radio station, here is a chart which shows the 70 dBu ("City Grade") and 60 dBu contour mileages, assuming various antenna heights: http://216.134.214.83/articles/Avg%20%20FM%20Service%20Ranges[1].pdf


Thanks to Jeff Brock, consulting engineer at Graham Brock for updating my chart! http://www.grahambrock.com/


George
Media Services Group

What Citadel could have done

It is easy to be a "Monday Morning Quarterback." And yes, hindsight is 20-20. But there are steps which Citadel could have taken after the ABC deal closed but before the credit market tanked. They could/should have:

• Sold off the network/syndication business. That would have raised a pile of cash and allowed management to focus on running the radio business.

• Bundled their tower assets and sold them as a package to a tower consolidator. Towers were trading a significantly higher multiples than radio stations during that time (and still are).

• Drawn a line at market # 50, and sold all of their smaller markets to entrepreneurs (who were lined up to buy at the time). Not unlike CBS, Citadel's core competencies are best suited to major market operations.

• Negotiated a debt for equity swap with their lenders, conditioned upon (and priced based upon) all of the above occuring.

Those are my thoughts. What are yours?

George
Media Services Group

MediaPost quotes Borrell Associates report: Auto ad spending on the rise

"According to a new report from Borrell Associates monitoring the pulse of local ad spending by U.S. auto dealers, dealer associations, and manufacturers, US auto manufacturers will increase their online local ad spending by 14% in 2010, while new- and used-car dealers will increase their ad spend online by 8.6%. The total effect will result in an 11.4% increase in new-vehicle online ad spending next year.

Overall, Borrell Associates predicts that US ad spend for new cars will rise to a total of $19.2 billion from the low of $18.4 billion in 2009, experiencing a 4% growth rate across all media. These numbers represent declines from 2008 spending, following a precipitous drop in automotive ad spend of 31% in the first half of 2009, during which Chrysler and GM declared bankruptcy and the recession forced a significant decline in new auto sales."

See the MediaPost Research Brief here: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=117858

George
Media Services Group

Merry Christmas to all!

Merry Christmas to you and yours. May this special day be filled with blessings.

George, Loree, Cara, Megan & Shannon

Five things you can do today to launch a successful 2010

Here are five things you can do today (or Monday after the holiday) to launch the New Year:

1. Place sales recruiting ads on-air, with your EEO sources, and in LinkedIn Jobs (all at no cost) to hire two new salespeople. Budget permitting, put classified ads in the trades.

2. Set up Facebook Pages and Twitter accounts for each of your stations and link them to your websites. Put someone in charge of keeping them relevant (even if it is you!).

3. Schedule face-to-face appointments with your five biggest advertisers to find out about their needs in 2010.

4. Dump "national" PSA's and replace them with PSA's from local organizations.

5. Invest in sales training (available through your state association, consultants, or the RAB).


George
Media Services Group
http://www.mediaservicesgroup.com/location.cfm?id=3

Meet the Media Services Group partners: Jody McCoy

Jody McCoy runs MSG's office in Colorado Springs. Early in his broadcast career, Jody was successfully involved in radio and television sales, sales management, and general management of stations. Former employers included Turner Communications, Group W, and Jefferson-Pilot Communications. He has also participated in FM radio station ownership in Kansas, Michigan, and Colorado. He is currently the president of Optima Communications, licensee since 1989 of KRDO 105.5 FM, serving Colorado Springs.

Jody entered the broadcast brokerage business in 1992 and since that time has brokered the sale of hundreds of stations worth hundreds of millions of dollars. He has experience as an expert witness regarding station values and other broadcast issues. He has worked on technical upgrades for radio stations, including having upgraded KRDO from a class A to a C3 to its current status as a C2. Jody has also been an adviser to clients on Local Marketing Agreements and Joint Sales Agreements.

As an operator, owner, and broker, Jody has the experience and knowledge to provide effective guidance to banks, investors, and company management in workouts and restructuring assignments.

His academic background includes a B.A. from the University of Virginia, and a M.A. in Communications Management from the University of North Carolina at Chapel Hill. He has also completed the courses of the Mass Media Institute at Stanford University, the National Association of Broadcasters Sales Management at the Wharton School of the University of Pennsylvania, and the Young Executives Institute at the Kenan Flagler Business School at UNC Chapel Hill.

Eric Rhoads: Bankruptcy: Music To My Ears

Eric's insight into the Citadel bankruptcy:

http://ericrhoads.blogs.com/ink_tank/2009/12/bankruptcy-music-to-my-ears.html

I agree with him that bankruptcy is pushing the radio "reset" button. "Imagine what we can do if we actually start promoting again and start serving our audiences with deep conviction and localism."

Take a minute and read his post.

George
Media Services Group
http://www.mediaservicesgroup.com/location.cfm?id=3

EMF closes two purchases

Media Services Group's Jody McCoy announces two closings with Educational Media Foundation:

KABW-FM from College Creek Media http://www.mediaservicesgroup.com/press.cfm?id=1379

KXPC-FM from Portland Broadcasting http://www.mediaservicesgroup.com/press.cfm?id=1380

Good work, Jody!

New feature: Subscribe via email

We added a new feature to the blog. You can now subscribe via email. Just type in your email address in the "SUBSCRIBE VIA EMAIL" box on the upper right-hand-side of the page.

George

We have our work cut out for us

According to MediaPost, a recent survey of small businesses reports the following:

• 74.1% plan to increase their use of email marketing in 2010
• 68.3% plan to increase their use of social media
• 79.6% are not planning to use TV
• 72.7% will not use radio

See the story here: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=118122

George
Media Services Group
http://www.mediaservicesgroup.com/location.cfm?id=3

Who Killed Citadel Broadcasting? (New York Times DealBook)

What a shame. Read the story:

http://dealbook.blogs.nytimes.com/2009/12/21/who-killed-citadel-broadcasting/?src=twt&twt=nytimesdealbook

Message from David O'Connor about upcoming FCC media ownership workshop

The Media Bureau has announced it will hold its next media ownership workshop on January 12, 2010 at 9:00 a.m. in the Commission Meeting Room as part of the Commission’s 2010 quadrennial review proceeding. The workshop will focus on the current financial and economic conditions and marketplace factors affecting the media industry and how the FCC should take these into account as it conducts its review process.

Specifically, the forum will examine whether:

-- The media ownership rules affect the financial health of broadcasters

-- Lending or investing institutions consider the rules in their funding practices

-- Economic changes affecting the media marketplace are cyclical or permanent

-- There is a need to balance financial conditions in the media industry with other policy goals when conducting the Commission’s ownership review and, if so, how that should be done

The workshop will also explore how new media are affecting broadcasters, the lending and investment practices in traditional media, and how market size affects financial issues related to broadcasting.

The forum will consist of two panels. The first will be comprised of smaller broadcasters, or broadcasters that compete in smaller markets, and representatives of financial institutions that serve them.

The second panel, consisting of larger broadcasters or broadcasters that compete in the larger markets, will also include representatives from financial institutions that serve these broadcasters.

See the links below for additional information.

MEDIA BUREAU ANNOUNCES MEDIA OWNERSHIP WORKSHOP ON FINANCIAL ISSUES.News Release. (Dkt No 09-182 ). News Media Contact: Mania Baghdadi or Amy Brett at (202) 418-2330 MB . Contact Janice Wise at (202) 418-8165

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-295279A1.doc

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-295279A1.pdf

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-295279A1.txt

David A. O'Connor

Partner

Wilkinson Barker Knauer, LLP

2300 N Street, NW

Suite 700

Washington, DC 20037

Direct: 202-383-3429

Main: 202-783-4141

Fax: 202-783-5851

E-mail: mailto:doconnor@wbklaw.com

And the hits just keep on coming: NextMedia

NextMedia files for bankruptcy. Story at Radio-Info:

http://www.radio-info.com/?utm_source=Subscribers&utm_campaign=11dc08fd4a-eNews_Alert&utm_medium=email

10 in '10 (my predictions for the broadcasting industry in 2010)

‘Tis the season for crystal ball gazing. Here’s what mine (albeit a littly foggy) suggests for 2010:

1. More bankruptcies and bank workouts

I predict a couple of major bankruptcies, likely pre-arranged, and more than a couple from smaller broadcasting companies. (Note: I wrote this post last week before the Citadel news broke yesterday). Banks will continue to try to work with good company management groups, but will move to take over companies perceived to be burdened with weak management.

2. Prices will hover in the 6x to 8x BCF range (with occasional outliers both above and below).

3. Seller financing will return to small market deals. Banks will remain on the sidelines relative to new lending.

4. Social media will become more crucial to station marketing

5. Big radio companies will become smaller, focusing on top 50 markets and spinning off their smaller markets.

6. The entrepreneur will return (buying those markets spun off by the big boys).

7. Interactive revenue will post double-digit growth.

8. Broadcast groups will attempt to clean up and “right size” their portfolios (as opposed to point # 5, this relates to groups peeling off non-performing stations in markets where they will continue to operate).

9. FM sticks will trade at $3 to $6 per pop (based on the 60 dBu contour).

10. AM sticks will trade at less than $1 per pop (based on the 2.0 mVm contour)

RBR recently ran an article on 2010 which in addition to a few of my thoughts, included those of others in the industry. Check it out here:

http://www.rbr.com/features/intel_briefs/19396.html

So what do you think?

George
Media Services Group
http://www.mediaservicesgroup.com/location.cfm?id=3

Citadel files Chapter 11

According to Inside Radio, Citadel has filed a "prearranged" Chapter 11 reorganization plan with a New York bankruptcy court. Their full story is here:

http://www.insideradio.com/Article.asp?id=1632941&spid=32060

Congratulations to Tribune and Randy Michaels

As most of the broadcasting industry knows, Randy Michaels was named chief executive at Tribune a couple of weeks ago, succeeding Sam Zell who stays on as chairman. Randy also got a seat on the Board. He has been with the company since it went private in 2007, and COO since May, 2008.

If anyone can steer Tribune out of chapter 11 and back into prosperity, Randy can. He has a platform which includes WGN radio, 23 TV stations, and more than 50 web sites. I hope that the Board and the banks turn him loose to do his thing. If so, don't bet against him.

George

Media Services Group

http://www.mediaservicesgroup.com/location.cfm?id=3

Broadcast industry news

We have assembled a web page of RSS feeds from the broadcasting industry. It is a great way to get your morning news "fix" quickly. Click here and add us to your bookmarks:

http://www.mediaservicesgroup.com/index.cfm?pg=newsinfo

George
Media Services Group
http://www.mediaservicesgroup.com/location.cfm?id=3

Meet the Media Services Group partners: Bob Heymann

Bob Heymann is a hard core Tar Heel fan. He is also a darn good broker.

Highlighting my partners on the occasion of MSG's 20th anniversary, I would like to focus on Bob, who runs our Chicago office. Prior to opening that office, Bob spent 24 years brokering radio and TV stations from coast to coast with a total aggregate value in excess of $500,000,000.

A few of his record setting transactions include:

•Sale of WNIB-FM (now WDRV) Chicago for $165,000,000
•Sale of WPNT-FM (now WILV) Chicago for $75,000,000
•Sale of KOMA AM&FM Oklahoma City for $54,000,000

Among his other business enterprises, Bob was co-founder and chairman of the nation’s first broadband cable system and chairman of the largest telecom information company partnered with Pacific Bell (now AT&T).

Prior to beginning his brokerage practice, Bob managed KQAK San Francisco and previous to that, he held management positions and consulting relationships with some of the largest broadcasters in America including NBC, CBS, and Evergreen Media.

Bob got into broadcasting early (becoming interested at 14 years old!) and was one of the youngest people ever to receive a First Class Radio Telephone Operator License from the FCC.

Bob has a B.S. degree from the Kenan-Flagler School of Business at his beloved University of North Carolina. He regularly makes the trek to Chapel Hill to attend ballgames. Go Heels!

George

5-step program to a better Public Inspection file (courtesy of Graham Brock)

This is from Graham Brock's website: http://www.grahambrock.com/public_file.htm

"Public Inspection Files have been a sore spot with broadcasters for a long time because no one seems to know what is really supposed to be in it, nor does anyone bother to keep it updated. If you have ever looked at the Rules and tried to determine what is supposed to be in the Public Inspection File, you'll understand why this is such a sore subject. In almost all of the Due Diligence Inspections we do, we find inadequate Public Inspection Files. The most common excuse is, 'Well, I didn't know what went in there.'

So, with that said, we have attempted to compile a "user friendly" Public Inspection File List and have created a 5-Step Program To A Better Public Inspection File. This list has been complied from the FCC's Rules & Regulations, the FCC's Web Site and the FCC's Self-Inspection Checklist. We have tried to be as thorough and as accurate as possible, however, it is your responsibility to contact your Communications Attorney to ensure compliance with the Commission's Rules."

If you're charged with maintaining your station's Public Inspection file, check it out. Call Stu or Jeff with any questions (912) 638-8028.

George
Media Services Group
http://www.mediaservicesgroup.com/location.cfm?id=3

Stations for sale: "And now a word from our sponsor. . ."

In my media brokerage practice, with an occasional exception, I generally represent sellers. Many of our station listings are kept very quiet; stations owners are ultra-sensitive to word leaking about their stations being on the block.

But we have a little more latitude with some opportunities; still confidential, but we're able to talk about them publicly on a "blind" basis. If any of these situations fit what you're looking for, please send an email (mailto:George@MediaServicesGroup.com):

• New York DMA big population coverage AM stations
• North Carolina FM cluster (possible seller financing)
• Virginia FM cluster (possible seller financing)
• West Virginia AM/FM cluster (possible seller financing)
• Midwest top 100 market two-FM cluster
• Florida video production studio
• AM/FM in southeastern resort market
• AM move-in to Montgomery (possible institutional financing)

Finally, I would like to invite you to regularly check our "Classifieds" section of the Media Services Group website: http://www.mediaservicesgroup.com/index.cfm?pg=cla

George
Media Services Group
George@MediaServicesGroup.com
(904) 285-3239
http://www.mediaservicesgroup.com/location.cfm?id=3

How to follow this (or any other) blog

If you would like to keep track of this blog (or most others), you generally have several options:

1. You can subscribe to the RSS feeds. Click on "Subscribe To" (right column) and you'll be given a choice to "Add to Google," "My Yahoo," etc. You can subcribe to the posts and/or the comments. This is probably how most people track their blogs.

2. You can "Follow." See the "Followers" section below right. Click on "Follow." You will then be prompted to select Google, Twitter, or Yahoo. I prefer to use the Google Reader. Don't have a Google account? Click "Create a Google account." It just takes a few seconds and is a pretty handy tool.

3. Finally, and my preference, you can use Google Reader. Just click "Add a subscription" in the upper left hand side of your screen, and past in the URL (http://georgereedradiotv.blogspot.com/).

Of course, you can alway just bookmark your favorite blog pages directly into your browser.

George
Media Services Group
http://www.mediaservicesgroup.com/location.cfm?id=3
mailto:George@MediaServicesGroup.com

Looking for radio station coverage maps?

If you're looking for free and quick radio station coverage maps, check out radio-locator http://www.radio-locator.com/.

Of course, Media Services Group clients can just call and request them (we use both V-Soft and the BIA databases).

George
http://www.mediaservicesgroup.com/location.cfm?id=3

Radio on Twitter

If you're new to Twitter and interested in following the radio industry, here is quick-start. Twitter recently added a "Lists" feature which allows users to group micro-bloggers into category specific lists. So now you can follow an entire list by simply clicking on it from your Twitter account.

You can follow me at: http://twitter.com/georgereedradio

I have a list of FCC attorneys: http://twitter.com/GeorgeReedRadio/fcc-attorneys

Other radio/media related lists which might be of interest:

http://twitter.com/Tachman/radio

http://twitter.com/johnschick/media-marketing

http://twitter.com/SteveGaines62/cville

http://twitter.com/radioguy49/radio

http://twitter.com/mediadude/radio

http://twitter.com/radioinsight/radiopeeps

http://twitter.com/mfhiatt/radio

http://twitter.com/chagota/radio-et-al

http://twitter.com/topramen/radio

http://twitter.com/ethernick/broadcasting

http://twitter.com/RicoG/radio-fools

http://twitter.com/StreamTheWorld/radio-industry

http://twitter.com/BruceBarber/radio

http://twitter.com/djmarc/ontheradio

http://twitter.com/MarkEdwards/broadcasting-buddies

http://twitter.com/KennedyCS/radio

http://twitter.com/iradiosales/faves

http://twitter.com/RL_Bynum/radio

http://twitter.com/red_and_nater/radio-tv-peeps

There are plenty more where these came from, but you have to start somewhere!

If you're brand new to Twitter, you might find this earlier article helpful: http://georgereedradiotv.blogspot.com/2009/10/hello-my-name-is-george-reed-and-i.html

George
http://www.mediaservicesgroup.com/location.cfm?id=3

Meet the Media Services Group partners: Eddie Esserman

Media Services Group just celebrated our 20th birthday. During that time, we have helped our clients buy and sell a lot of radio and TV stations, with transaction volume in the billions of dollars. It all started two decades ago when several brokers with Chapman Associates, myself included, decided to set out on our own and form MSG with a laser focus on client service. Several credit crunches and recessions later (along with a boom or two), we're still at it.

Over the course of the next few months, I want to highlight in these pages the guys I work with at MSG. We have a great team, and I am proud of my association with each and every one of them.

What better partner to start with than the one I've known the longest? Eddie Esserman and I met in Atlanta over 30 years ago; back then, we were kids (and competitors) in Atlanta radio. He was still relatively fresh out of Georgia Tech and a stint in the record business (get him to tell you his Willy Nelson story some time).

Like many of us, Eddie began his broadcast career in high school as an announcer. With a keen interest in engineering. he holds a General Radio Telephone license, having earned a First Class Radio Telephone license as a teen (and is still a practicing "ham").

After college, he returned to broadcasting in the programming department for the Pacific and Southern group of stations, migrating to the sales side and managing sales departments for two Atlanta stations. He became the Vice President and General Manager for Shamrock Broadcasting’s Atlanta outlet, WFOX.

In the mid 1990’s Eddie managed one of the country’s first large market duopolies (in San Francisco) for Shamrock. He pursued ownership after leaving Shamrock in 1995 and owned and operated in Macon and Savannah (I was proud to be his exclusive broker on those deals). After selling those stations, I talked him into joining us at MSG.

In addition to managing our office on beautiful St. Simons Island, GA, Eddie owns stations in nearby Brunswick, GA and not-so-nearby south Texas. Together, we are partners in a tower company (USAntenna, Inc.) with towers in the Southeast.

Eddie is a frequent faculty member of the NAB’s Education Foundation Broadcast Leadership Training Program. He has testified as an expert witness in bankruptcy matters and been a court appointed broker. And he is a great guy.

Catch Eddie's blog ("Esserblog") here: http://www.eddieesserman.blogspot.com/

George

Group Head to You Tube hit

Tom Taylor ran a story in Friday's "Taylor on Radio-Info" about John Chaffee. John used to run Malrite (and I still hit him up once in a while to get back into the radio business). Since John left the radio business, he has apparently returned to his song writer roots and now has a You Tube hit ("Play By the Rules"). And it is starting to cross over onto mainstream country stations!

Check it out:

http://www.youtube.com/watch?v=gZwIPnLZd6w

George
Media Services Group
http://www.mediaservicesgroup.com/location.cfm?id=3

Media Services Group announces the sale of KAKS-FM, Fayetteville, AR

Carroll County Broadcasters has reached an agreement to purchase KAKS FM serving Fayetteville, Arkansas from Davidson Media Arkansas Stations LLC. Carroll County Broadcasters is headed by Jay Bunyard who owns 16 Arkansas radio stations. Davidson Media is headed by Felix Perez ,CEO and owns 37 radio stations. The sale is pending FCC approval.The purchase price is $1,110,000.

Bill Whitley of the Dallas office of Media Services Group served as the exclusive broker for this transaction. http://www.mediaservicesgroup.com/press.cfm?id=1378

Radio/TV Station Buyers group on LinkedIn adds new Subgroups

We have added new Subgroups to our LinkedIn group "Radio/TV Station Buyers" http://www.linkedin.com/groups?gid=2353823&trk=myg_ugrp_ovr:

• Stations for Sale


• Debt financing


• Equity investors


• Non-commercial


• Transaction services providers

If you are a member, please join and participate in whichever Subgroups are appropriate. If you're not a member (and interested in buying and running radio or TV stations), please join us!

George
http://www.mediaservicesgroup.com/location.cfm?id=3

Kellar Radio Talent Institute launches new website

I have discussed the Kellar Radio Talent Institute (formerly knows as the Kellar Radio Farm System Institute) at Appalachian State University before. Run by world-class consultant Dan Vallie, the Institute is a fabulous training ground for radio talent, including radio sales talent. It is the first program of its kind in the world.

I spoke to the group last summer (http://www.kellarradiotalentinstitute.appstate.edu/video/GReed.swf) and was impressed by the dedicated kids in the room and the program which Dan assembled.

Station operators are forever complaining about the difficulty in recruiting sales talent; here is a resource. Check it out: http://www.kellarradiotalentinstitute.appstate.edu/index.html

George

Media Services Group

http://www.mediaservicesgroup.com/location.cfm?id=3

Eric Rhoads: Liberating This Chained Industry The Good and Bad News About Radio and the Coming Renaissance

Eric dishes out the good news and the bad news for the radio industry in his latest blog post. He says that it will be a wild ride in the future, but worth the effort.

"When things appear their darkest and coming storms create further disruption, we must stay focused on the idea that with storms comes a cleansing and dramatic change."

"One thing is for sure: Returning to the past won't work. Though elements of the past that have been ignored will become critical to continued survival and success."

"My gut tells me that radio is about to experience a renaissance."

Read Eric's blog post here:

http://ericrhoads.blogs.com/ink_tank/2009/12/liberating-this-chained-industry-the-good-and-bad-news-about-radio-and-the-coming-renaissance.html

George

Florida video production company for sale

I am working on an interesting project a little off my normal path: selling a Florida video production studio. Located in an attractive beach community and convenient to Miami, Orlando, Tampa and Jacksonville, the studio features new state-of-the-art HD gear and full 3D virtual set capabilities.

The studio is less than a year old and has a growing base of business with infomercials, commercials, training videos, music videos, TV and online productions. Real estate and two motor homes are included.

If you're looking for a business to grow with the boom in video, email your contact information to me at mailto: George@MediaServicesGroup.com

Disclaimer: I am a licensed Florida Real Estate Broker

George

NYT DealBook: Tough Times Turn Newspaper Lenders into Owners

Insight into some of the issues facing broadcast lenders as well.

http://dealbook.blogs.nytimes.com/2009/11/30/tough-times-turning-newspaper-lenders-into-owners/

Happy Thanksgiving!

Enjoy your family, food, and football, but remember that this is a time to give thanks for all that we have. Happy Thanksgiving!

See you next week,

George

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

Comments:

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.

Bank Street Group's Scott Singer discusses "The Future of Big Media" on CNBC

Scott Singer, Managing Director and Head of Media & Entertainment at Bank Street Group appeared on CNBC last week to discuss "The Future of Big Media." See it here:

http://www.cnbc.com/id/15840232?video=1336134455&play=1

Radio/TV Station Buyers group on LinkedIn tops 150 members

Radio/TV station trading is alive and well (at least online)!

Six weeks or so ago, I started a group on LinkedIn (Radio/TV Station Buyers) devoted to members interested in radio and television station trading. Since, the group has expanded to over 150 members, surprising given the dismal economy and barely accessible credit markets.

Group members are encouraged to particpate in industry discussions, and post relevant news and jobs. If you're not yet involved, bookmark this site and join us:

http://www.linkedin.com/groups?gid=2353823&trk=hb_side_g

If you know other broadcasters (or prospective broadcasters) who might benefit from our group's contacts and information, please invite them to check us out.

George
Media Services Group
http://www.mediaservicesgroup.com/location.cfm?id=3

Eric Rhoads: The Sky Is Not Falling . . . Everywhere

A good message from Radio Ink's Eric Rhoads: "The Sky Is Not Falling . . . Everywhere"

http://ericrhoads.blogs.com/ink_tank/

By the way, Eric's blog is a great one to follow if you're in the radio business.

George

"Time" magazine article on Larry Wilson: "Rescuing Radio"

If you're a fan of radio, and/or a fan of Larry Wilson, this is a must read:

http://www.time.com/time/magazine/article/0,9171,1933204-1,00.html

FCC Attorney (and great guy) Wade Hargrove honored at UNC-Chapel Hill

Last night, I attended a gathering of some 150+ of Wade Hargrove’s friends, family, clients and colleagues who came together for a surprise dinner at the Carolina Inn in Chapel Hill. Wade walked into the room to a standing ovation and glaring TV camera lights, only to then learn that he was the namesake for “The Wade H. Hargrove Communications Law and Policy Colloquium.” The Hargrove Colloquium will attract prominent figures from the media industry, law and government to deliver high-profile public lectures and interact with students and faculty.

Wade, a graduate of Chapel Hill and now a university Trustee, is the driving force behind the UNC Center for Media Law and Policy. It is a national forum where media industry leaders and legal scholars and practitioners meet to discuss emerging issues at the intersection of media and law.

The evening was sponsored by the North Carolina Association of Broadcasters, the North Carolina Cable Telecommunications Association, the Hearst Corporation, the University of North Carolina School of Journalism and Mass Communications, and the UNC School of Law. Wade, a partner at Raleigh based Brooks Pierce (http://www.brookspierce.com/lawyers-wade-hargrove.html), has been NCAB’s executive director and counsel for more than 39 years, NCCTA’s general counsel for 30 years, and Hearst’s regulatory counsel for 20 years.

Dean Jean Folkerts of the School of Journalism and Mass Communications emceed the event which featured some great Wade Hargrove stories, courtesy of Carl Venters, Jack Stanley, Mark Prak, and David Barrett. A shocked and emotional Wade Hargrove graciously accepted the honor (Wade’s a great speaker even when it is impromptu).

The $200,000+ seed money for the Colloquium came from the ABC Television Affiliates Association, Capitol Broadcasting, the FOX Television Affiliates Association and a host of Wade’s fans. A “Who’s Who” list of TV operators was on hand for the occasion.

I want to add a personal note. I’ve known Wade for a long time and have witnessed first-hand his dedication to broadcasters, large and small. While he enjoys a fabulous reputation nationally, with an impressive client list, he works tirelessly for broadcasters in his beloved North Carolina. He deserves the many accolades he received last night. And fitting Wade’s other passion of music, the evening culminated with the performance of a red hot bluegrass band.

Congratulations Wade!

George

Hello. My name is George Reed, and I Tweet.

So here you are reading a blog. If you’re like me, not long ago you scoffed at “bloggers” and “blogging” as something done by the fringe elements with too much time on their hands. Who do they think they are?

But times have changed. Blogs have become a useful tool for news, opinion, and idea dissemination. Twitter (http://twitter.com/) is simply a mini-blog, limited to 140 characters. And it has taken off like a rocket, more so with the “grownups” than the kids. It is widely used by professionals. The benefits of Twitter to me and my brokerage practice increase daily, as more and more of my clients, customers, and other industry professionals add their voices to the Twitter universe.

I signed up for Twitter (@GeorgeReedRadio) within the past year just to learn what it was all about (I launched this blog for the same reason). The benefits soon became apparent and I now follow just under 300 people (with just under 250 following me). The people I follow generally fall into these categories:

* Clients, customers, and prospects
* Media and marketing opinion leaders
* Broadcasting related groups (NAB, state broadcasting associations, trade publications, consultants, FCC law firms and lawyers)
* General business
* Businesses and contacts in Charlottesville (where I own stations)
* Friends and family
* My radio stations (and those of my competitors)
* Radio personalities
* Local news and weatherNews on my other hobbies and interests

By following these Twitterers, I stay up to date on all kinds of useful, relevant information, often using links in the Tweets for follow-up. If I spot something which I think might be useful to my own Followers, I “re-Tweet” it. One of the keys to using Twitter effectively is to only Tweet what you think is relevant to your own Followers. I often Tweet links to interesting articles or websites, links to my blog if I have posted something useful, and re-Tweets of timely industry news items. Mashable has a great Guide Book for anything you might want to know about Twitter (http://mashable.com/guidebook/twitter/).

If you own and operate radio stations, your air personalities should be on Twitter. It allows them to expand their brand and your station’s brand. Follow a few DJ’s and you’ll see what I mean.

Try it out. It only takes a minute to set up an account. After you have set it up, pick out a few interesting people to follow (you can use Twitter’s Search function). Feel free to go to my account (http://twitter.com/GeorgeReedRadio), click on “Following,” and click on names which look interesting to you; you will be given the choice to “Follow” at the top of each profile. Here are a few ideas to get you going:

@GuyKawasaki
@borrellassoc
@chrisbrogan
@FCC
@garyvee
@mashable
@mramsey1
@nielsenwire
@nytimesbusiness
@Scobleizer
@webby2001
@WSJMedia

If the benefits become apparent (and I suspect that they will), you might want to consider Twitter software for your smart-phone (I use Twitterrific on my iPhone) and a more enhanced platform for your office computer (I use TweetDeck, available for free download http://www.tweetdeck.com/beta/download/).

See you on Twitter!

George
Media Services Group
http://www.mediaservicesgroup.com/location.cfm?id=3

"What's it worth?"

The two most common questions in a media broker’s life are:

1) What is my station/cluster/company worth?

2) What is HIS station/cluster/company worth?

Good brokers can usually respond quite accurately. But those questions have been a lot more difficult to answer over the last year. Liquidity vaporized, multiples dropped, and the bid/ask spread widened. If a buyer will buy and a seller will sell at 7x Broadcast Cash Flow (“BCF”), but there is no capital available to complete the transactions (or the assets are secured by an 8x bank loan), is the business really worth 7x?

While year-to-date radio transaction volume is a fraction of last year’s (which, in turn, was a fraction of the year before’s), let’s look at what actually DID sell so far this year. I queried our BIA database for all 2009 sales greater than or equal to $5 million which included at least one FM facility. From the resulting list of transactions, I eliminated two (one which was not an “arms-length” deal and one which was a “move-in” play) and added one (which was actually announced in late 2008, but closed in 2009). These ten deals should give us a good idea of station pricing in 2009:

1) Denver 12/08 CBS to Wilks
2) Hartford 02/09 Aloha Station Trust to Red Wolf
3) Portland # 1 05/09 Rose City to Alpha (Larry Wilson)
4) Las Vegas 05/09 Beasley to Royce
5) Pittsburgh 05/09 Sheridan to St. Joseph Missions
6) San Francisco 07/09 Flying Bear to Royce
7) Indianapolis 07/09 Oasis to EMF
8) Portland # 2 08/09 CBS to Alpha
9) New York 07/09 New York Times to Univision
10) Boston 09/09 Nassau to WGBH Educational

Let’s examine each of these in more detail. At the end, we will attempt to draw some conclusions. In each case, I used data from BIA except for Agency Commission (assumed 12% of gross revenue) to estimate Net Sales, and BCF Margin (where I used a hypothetical percentage which would be consistent with the reported revenue). For “stick” deals, I looked at the Cost per Pop as the primary metric. The Pop Count represents the number of persons under the 60 dBu contour for FM stations, and the 2.0 mVm contour for AM’s.

1) Denver

Sale Announced: 12/08
Calls: KIMN-FM, KWLI-FM (now KWOF-FM), and KXKL-FM
Buyer: Wilks Broadcast Group
Seller: CBS Radio
Market Rank: 21
Price: $19,500,000
Gross Revenue: $14,400,000
Net Revenue: $12,672,000
BCF Margin: 40%
BCF: $5,068,800
Multiple: 3.9x
Comments:

I believe that the actual net revenue was closer to $10,000,000; at a 30% margin, you get BCF of $3,000,000. Under these revised assumptions, this would be a 6.5x deal. Even at a much lower cash flow, Jeff Wilks and his venture partners at Wicks made a great purchase. These are three good technical facilities with significant revenue.

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2) Hartford

Sale Announced: 02/09
Calls: WURH-FM (now WMRQ-FM)
Buyer: Red Wolf (John Fuller)
Seller: Aloha Station Trust
Market Rank: 50
Price: $7,900,000
Pop Count: 2,180,405
Cost per Pop: $3.62
Comments:

The Seller is Clear Channel’s Aloha Trust. The station is in the New Haven market but also reaches into Hartford. I evaluated this deal as a “stick.”

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3) Portland # 1

Sale Announced: 12/08
Calls: KXL-AM and KXTG-FM
Buyer: Alpha Broadcasting LLC
Seller: Rose City Radio Corp.
Market Rank: 23
Price: $11,000,000
Gross Revenue: $7,750,000
Net Revenue: $6,820,000
BCF Margin: 30%
BCF: $2,046,000
Multiple: 5.4x
Comments:

This deal gave Larry Wilson his platform in Portland (upon which he has subsequently grown; see below). This cluster originally was purchased for $55,000,000; by my reckoning, that is a $44,000,000 haircut.

The Seller is owned by radio veteran and Microsoft co-founder Paul Allen. Larry Wilson, founder of Citadel, is returning to the business after an eight year hiatus.

The combo is home to the NFL Seattle Seahawks, University of Oregon Ducks football, and the NBA Portland Trail Blazers. Both pro teams are owned by Paul Allen.

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4) Las Vegas

Sale Announced: 05/09
Calls: KYCE-FM (now KFRH-FM) and KBET-AM
Buyer: Royce International
Seller: Beasley Broadcast Group
Market Rank: 33
Price: $15,250,000
Pop Count: 1,376,084 (FM)
Cost per Pop: $10.90 (This assumes that the AM was worth $250,000
Comments:

Ed Stolz bought the AM plus the KYCE facility (but not the country format). Instead, he got the CHR format from KFRH (with country flipping to KFRH). I evaluated both stations as “sticks.” This high Cost per Pop is reminiscent of numbers from a few years back, and is an outlier in my analysis. Absent any additional facts on this transaction (such as perhaps some valuable real estate), it looks like George Beasley made a good sale.

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5) Pittsburgh

Sale Announced: 05/09
Calls: WAMO-FM (now WAOB-FM), WAMO-AM (now WAOB) and WPGR-AM (dark)
Buyer: St. Joseph Missions
Seller: Sheridan Broadcasting
Market Rank: 24
Price: $8,900,000
Pop Count: 1,761,970 (FM)
Cost per Pop: $4.48 (This assumes that the AMs were worth $1,000,000)
Comments:

These stations were taken non-commercial with new formats. I evaluated them as sticks, assigning a $1,000,000 value to the two AM’s. Seller Sheridan Broadcasting also operates the American Urban Radio Network.

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6) San Francisco

Sale Announced: 07/09
Calls: KNGY-FM (now KREV-FM)
Buyer: Royce International
Seller: Flying Bear Media
Market Rank: 4
Price: $6,500,000
Pop Count: 2,287,314
Cost per Pop: $2.84
Comments:

This station was originally purchased for $33,700,000; another big haircut on our list. And the sale price represents the lowest Cost per Pop on our list, a great buy for Ed Stolz.

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7) Indianapolis

Sale Announced: 07/09
Calls: WKLU-FM
Buyer: Educational Media Foundation
Seller: Oasis Radio Group
Market Rank: 40
Price: $4,750,000
Pop Count: 1,049,007
Cost per Pop: $4.53
Comments:

Based on the Cost per Pop, Russ Oasis did well on this sale. He sold his real estate separately for $1,550,000.

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8) Portland # 2

Sale Announced: 08/09
Calls: KCMD-AM, KINK-FM, KUFO-FM, and KUPL-FM
Buyer: Alpha Broadcasting LLC
Seller: CBS Radio
Market Rank: 23
Price: $40,000,000
Gross Revenue: $23,800,000
Net Revenue: $20,944,000
BCF Margin: 40%
BCF: $8,377,600
Multiple: 4.8x
Comments:

This is the icing on the cake for Larry Wilson’s effort in Portland. My guess is that the actual cash flow is lower than in the above analysis, probably closer to $7,000,000. That would yield a 5.7x multiple. This gives Larry a 26.6% revenue share of the market.

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9) New York

Sale Announced: 07/09
Calls: WQXR-FM
Buyer: Univision
Seller: New York Times Co.
Market Rank: 1
Price: $45,000,000
Pop Count: 15,354,286
Cost per Pop: $2.93
Comments:

WQXR was New York’s oldest classical music station. Univision is really paying $33,500,000 plus their WCAA-FM (Newark) facility. The Seller is keeping Univision’s cash, but flipping the WCAA facility and classical format to WNYC Radio for $11,500,000. WNYC Radio is operating 105.9 mHz as a non-commercial station. Univision retains their original WCAA call letters.

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10) Boston

Sale Announced: 09/09
Calls: WCRB-FM
Buyer: WGBH Educational Foundation
Seller: Nassau Broadcasting I
Market Rank: 10
Price: $14,000,000
Pop Count: 3,913,794
Cost per Pop: $3.58
Comments:

I sold the original WCRB (now WKLB), albeit a much better technical facility, in 2006 for $100,000,000. My how things have changed! This sale was forced by Nassau’s lenders. The buyer, WGBH Educational Foundation, also owns public station WGBH-FM and digital PBS affiliates WGBH and WGBX in Boston.


To summarize, these comps tell a pretty consistent pricing story. Trading volume remains anemic and pricing soft. While I believe that cash flow multiples have bounced off of the bottom, I am seeing bids around 6x and asking prices around 8x. Sticks are trading around $2.50 to $3.50 per pop.

There is virtually no senior debt available for transactions, and until that changes, I do not look for significant pricing improvement. There is also the possibility of a glut of station inventory in the event that one (or more) of the major public companies implodes and restructures, forcing asset sales.

On the plus side, there has been improvement in the values of public broadcasting stocks and bonds, and there is some private equity on the sidelines.

“So what is my station worth?”

George

http://www.mediaservicesgroup.com/location.cfm?id=3

Jerry Del Colliano: The Disney Media Solution

You may not always agree with Jerry, but he will make you think. Here is an interesting piece on Disney/Steve Jobs and how their ideas could be applied to running radio and TV broadcasting companies:

http://insidemusicmedia.blogspot.com/2009/10/disney-media-solution.html

Gary Vaynerchuk Saves the Radio Industry!

Who?

The turnaround of the radio industry begins when its leaders define and adopt a game winning strategy. The tactics (HD, interactive revenue, NTR, etc.) come later.

I believe that a key to at least one game winning strategy lies in Crush It!, Gary Vaynerchuk’s new book on social media. (http://garyvaynerchuk.com/post/107300929/crush-it-why-now-is-the-time-to-cash-in-on-your) And I encourage every radio pro in the country to find a copy of the book, read it, and brainstorm ways to apply Gary’s social media brand-building techniques to the local media businesses of radio and TV.

Gary took his immigrant father’s liquor store from $4 million in revenue to $50 million in eight years. In 2006, he built his personal brand into a multi-million juggernaut using social media (cost: $15,000, plus countless hours of effort).

Imagine if every personality on your radio and TV station(s) devoted significant time and effort to building their personal brands in your market(s). The process described in the book is really quite simple. It is the energy and commitment devoted to the process which makes it successful. While many station personalities (at least those remaining employed in local radio and TV) blog and have Facebook pages, few, if any, utilize all of the brand building techniques described in the book.

We’re already generating meaningful local content. Why aren’t we making all of it available on podcasts? Why aren’t we feeding live video from our morning shows? Why doesn’t every station employee have a Flip cam to capture and broadcast on the Internet the pulse of our communities?

Sure, many DJ’s and TV personalities are blogging. But is the station really committed to building those blogs? Have we devoted any resources to their effort? Or are we simply content to have them knock out a few paragraphs during their next music sweep?

Gary’s book describes how he built himself into a multi-million dollar brand. And while it took (takes!) incredible effort, it wasn’t (and isn’t) rocket science.

Chapter One: “Passion is Everything.” Are your station personalities burning with the passion to become the #1 brand in their local market, or are they trying simply to be #1 in Arbitron or Nielsen?

This isn’t a paid endorsement. I bought the book. I know that there are a lot of really smart, creative, and talented pros in the broadcasting business. But we’re stuck in the rut of doing the things the same way that always worked in the past. That will not get the job done today or in the future. Pick up a copy of this book today and think through how you can employ its techniques in your station(s) beginning tomorrow. Crush It! is a “quick” read…it is a “must” read.

George

Media Services Group

http://www.mediaservicesgroup.com/location.cfm?id=3

Broadcast Tower Market Looking Up

At the right selling multiple of Tower Cash Flow ("TCF"), selling your broadcast tower(s) can be a great way to raise cash. (Note: TCF is your revenue minus operating expenses such as ground lease, utilities, property taxes and monitoring).

For much of the last year, broadcast tower assets languished at low multiples of TCF with few, if any buyers. Tower companies in general were capital constrained like every other business, and if they did buy something, it was usually wireless towers. Many tower companies expressed concerns about the creditworthiness of broadcaster tenants. I saw some offers at 3x to 5x TCF, but no takers.

Fast forward to today. Many broadcasters and sitting on great FM tower assets and the market is beginning to heat up. While capital is still tight, "vertical real estate" is a scarce commodity. Multiples have been bid up into the 8x to 10x range. With tower consolidators getting back into an acquisition mode, station multiples in a lower range than towers, and with "cash being king," now might be a good time to consider selling your towers. I would be happy to confidentially discuss your options with you.

If you would like more information on maximizing the value of your broadcast towers, I strongly recommend that you pick up a copy of Erwin Krasnow's and Henry Solomon's book, "Broadcast Towers - A Step-by-Step Guide to Making Money on Vertical Real Estate." You can order it from the NAB Store (http://www.nabstore.com/books.html).

George

Media Services Group

BIA Kelsey presentation from the NAB Radio Show: Winning Strategies for Local Radio - National Trends, Local Opportunities

At the recently concluded NAB Radio Show in Philadelphia, BIA/Kelsey offered a session on the future opportunities in local radio. BIA/Kelsey is sharing their presentation here:

http://www.bia.com/BIA-NAB-Session/Winning-Strategies-Local-Radio-09242009.pdf

George

Media Services Group

Station trading coming back to life?

Just a week ago, I formed a new group on LinkedIn (Radio/TV Station Buyers). I posted a few discussion topics, added some news feeds, and emailed a handful of broadcasters on LinkedIn to join. The "mission" of the group is simple:

"Dedicated to assisting broadcasters and first-time-buyers to successfully value, structure, finance, and purchase radio and television stations.

Members are encouraged to share news, information, and ideas on acquiring radio and television station businesses."

Now, just seven days later, the group has 73 new members. Many are existing station owners; some are broadcasters looking to acquire their first station. Frankly, I'm astounded. Reading the daily headlines, one gets the impression that broadcasting is "over." Certainly, we have our challenges, compounded by a soft economy, an even softer ad market, and an absolute lack of credit. But if the rapid growth of our little group on LinkedIn is any indication, there is still plenty of interest out there in building broadcasting businesses.

If you fall into that category, join us on LinkedIn:

http://www.linkedin.com/groups?home=&gid=2353823&trk=anet_ug_hm

And finally, as with any social group, it is only as good as the input from its members. Please contribute your thoughts, news and ideas. We all want to hear from you.

George

Media Services Group

Eric Rhoads: What Radio Will Avoid -- That Could Save It

Good blog entry from Eric Rhoads:

http://ow.ly/15Tjhj

My New Group on LinkedIn: Radio/TV Station Buyers

If you are "LinkedIn," and are interested in buying a radio or TV station(s), join our new Group:

Radio/TV Station Buyers

It is a forum for news, ideas, and information on the station trading process and market. Click here: http://www.linkedin.com/groups?gid=2353823&trk=hb_side_g

And please be an active contributor!

And yet more from the NAB: Larry Rosin's speech which got a lot of buzz

"We are fast becoming an industry of old men and an industry with a glaring HR crisis."

". . . this is at least the twelfth straight NAB Radio show with mostly the same increasingly older men saying that radio needs to develop a digital strategy."

"We will start aggressively recruiting the best podcasters, the best talents from YouTube or whatever other new media stars we can find and say: "Take six months, hone your craft further on our HD stations - don't worry no one is listening any way -- and invent the future of our medium."

http://www.infinitedial.com/2009/09/radios_stimulus_package.php

More from the NAB Radio Show Panel: Tom Webster

Tom Webster (Edison Research) adds his thought-provoking comments from the NAB Radio Show:

http://www.infinitedial.com/2009/09/radios_looming_crisis_is_not_d.php

From ESSERBLOG (Eddie Esserman): All the Emperors Had NO Clothes

Eddie's thoughts from the NAB Radio Show: http://eddieesserman.blogspot.com/

Mark Ramsey's Presentation at the NAB Radio Show

Mark was on a great panel at the NAB Radio Show (which included Bill Figenshu, Larry Rosin, John Parikahl, John DeBella, Fred Jacobs, Ed Christian, and Heidi Raphael). Here is a video of his presentation, which includes the suggestion to drop Arbitron:



http://www.hear2.com/2009/09/should-radio-drop-arbitron.html

Guy Kawasaki's 10-20-30 Rule of PowerPoint

While this doesn't relate directly to the Radio/TV business, if you make presentations (and most of us do), check it out (video less than 2 minutes):

http://holykaw.alltop.com/my-102030-rule-of-powerpoint

Lew Paper's New Book: Perfect-Don Larsen's Miraculous World Series Game and the Men Who Made it Happen

Many of us know Lew Paper as a respected FCC attorney (and host of the Dickstein Shapiro Financing conference at every NAB Radio Show for the last 20 or so years). But you may not know that Lew is an author. And he has a new book coming out today:

Perfect-Don Larsen's Miraculous World Series Game and the Men Who Made It Happen

It is the story of baseball's only World Series no-hitter. Check it out at: http://www.lewpaper.com/

Lew, I ordered my copy . . . good luck with it!

George

Good review of the comments from the Dickstein Shapiro conference at the NAB Radio Show

http://www.radioconventions.com/radio-industry-interest/nab-conference-looks-at-radios-recovery/

Thoughts, Observations, and Opinions from the 2009 NAB Radio Show

W. C. Fields is reported to have said, "I once spent a year in Philadelphia, I think it was on a Sunday." If you attended the NAB Radio Show this week in Philly, you, like I, can relate. I flew up on Tuesday to attend our Media Services Group meeting, and returned home Friday night. In between, I met with a number of MSG clients, customers, friends, competitors and various industry contacts at our suite in the Marriott, in the convention meeting rooms, and in the various hospitality functions throughout the convention. Here are a few thoughts and observations on the state of the radio industry as viewed through the Radio Show prism.

In general, the convention exceeded my expectations, though they were low . . . very low. This is the most challenging time in my 37 years in the broadcasting business. Station brokerage is my day job, and it is no secret that station trading ground to a halt a year ago. That said, there appears to be a bit of a thaw. While we will not likely return to anything resembling "normal" anytime soon (at least until senior debt returns), there are a few deals in the works and buyers and sellers are starting to talk again. In fact, "Inside Radio" ran this observation as its lead story on Wednesday (http://ftp.media.radcity.net/zmst/daily/C3886.pdf).

As always, Lew Paper's annual seminar for radio dealmakers ("Dickstein Shapiro's Broadcast Financing 2009: Surviving the Meltdown") was standing room only, and set the tone for the week. Most of the panelists (bankers and group heads) seemed to agree that we were probably at the bottom of the cycle, that we have seen the worst. Lew Dickey had the line of the morning when he suggested (paraphrasing) that lenders feared "Chapter 22, which is Chapter 11 twice." I also heard the phrase "kicking the can" repeated from the lenders. That describes a restructuring that essentially puts off any write-downs/foreclosures for some period of time, usually a year. The theory is that the buyer gets to buy time, and that the real restructuring will occur at some point in the future, presumably when the economic outlook is rosier. It looks like there will be a great deal of can kicking.

Interactive revenue and using social media seemed to be the themes of many of the panels. And radio seems to be playing "catch-up." That is better than not playing at all. It is definitely time to reinvent. Insanity is defined as doing the same thing over and over, and expecting a different outcome. Doing what we've always done will not cut it. Several of the group heads acknowledged that the industry quit investing in talent, research and marketing, that we got "fat and happy." That sounds to me to be the first step toward the cure.

Unfortunately, I missed the Marconi Awards this year due to another commitment, but kudos to KKOB-AM for 2009 Legendary Station, as well as to the other station winners.

Alexis Glick (FOX Business Network) delivered the keynote at the Friday luncheon, also suggesting that maybe we have seen the worst. Saga's Ed Christian received the National Radio Award. He is a very worthy recipient for his tireless efforts in promoting the industry. Congratulations to Ed!

All in all, it was a good week. Attendance was off, but that was to be expected. In spite of that, we had a steady stream of meetings with station buyers, sellers, and bankers in our suite all week. Next year's show will be in Washington, DC. Even with all of the pressure to reduce expenses, the Radio Show is a good investment of both money and time. If you didn't make it to Philly this year, try to get to DC in 2010. Hopefully, we will have some successes to celebrate by then!

George
Media Services Group

My Current Article in "Radio World": Restructuring Radio: Is Anyone Listening?

Here is a link to my current article in "Radio World" (Who Wins, Who Loses in the Coming Restructuring):

http://www.nxtbook.com/nxtbooks/newbay/rw_20090923/#/42

NAB Radio Show

The NAB Radio Show is this week in Philadelphia. With the turmoil in the economy in general, and the broadcasting industry specifically, it should prove to be an interesting conference. Many of the panels address interactive issues, and that is good. Interactive is one of the paths to broadcasters' return to prosperity.

On the trading front, we have noticed a pickup in activity. At least our phones are ringing again after a long hiatus. The entire Media Services Group crew will be in residence at the Marriott for the Radio Show. Please stop by and see us (suite # 708). It is always best to call or email for an appointment in advance, as calendars are pretty full.

I hope to see you in Philly,

George

Excerpt from Mark Hubbard's book: Business Wise Guide

Veteran radio guys (and gals) have good stories. Comes with the territory. I have read several chapters from entrepreneur, executive, consultant, teacher, and radio guy Mark Hubbard's new book (Business Wise Guide). It is a great read. You can order a copy at http://www.corbypublishing.com/. Enjoy:

Chapter 43

One thing could be better

There are special moments of human interaction that are unexpected, unforgettable and unique. I’m about to tell a story about one such occurrence in my life. It is an event that I’m determined to write about while I’m still of sound mind. Should I ever be confined to a nursing home and I were to tell this story, I’d very quickly be labeled as demented.

Early in my business career I was very fortunate to become a part of the senior management team at Taft Broadcasting, a public company based in Cincinnati that was so rich in assets that it was the subject of an unwelcome takeover in 1987. All of us, about 50 strong, that were part of this management team lament that this happened. Part of the distinctive culture of this company was the semi-annual management meetings that were held at attractive resorts which were designed for information sharing, innovation and team building. And, those goals were achieved. As proof, this same group of individuals, now scattered to the four winds, makes an effort to recreate those meetings every year – no business purpose intended. The team building was that strong.

This is the story about one of those management meetings, held in 1985 at the Homestead, a well-known resort in Hot Springs, Virginia. Part of the story relates to the difficulty that travelers from around the country had in reaching Hot Springs. There is a small airport and only a handful of commercial flights, all puddle-jumpers. So, to address this problem the company enlisted our corporate pilots to shuttle managers from headquarters in Cincinnati to Hot Springs a day before the meeting. It all worked quite well because we had flexible schedules and if you arrived a little early there was always a golf course to mitigate the discomfort of leaving home a little early. The return trip was a little more challenging, since everyone wanted to get back to their normal lives immediately after the meeting was over. So, there was a bit of a scramble for seats back to Cincinnati. Those of us with less time and grade were designated for later flights, a feature of being lower on the totem pole. But then an interesting thing happened.

Our corporate pilots were arranging all the details. One member of our Board of Directors, also from Cincinnati, had flown his own plane into the small local airport. He volunteered to take three of us back home in his four-seat Beech Bonanza. This plane was a single-engine prop job, and much slower than the Learjet that was being used to ferry the top brass. So, it was arranged and I was assigned to this flight with my friends Benjie Diesbach and Nick Miller. An hour and a half crammed into a tiny plane, with no toilet, over desolate mountain terrain with a single private pilot and no back-up. You might wonder why I would fondly remember an event like this. Oh, did I mention that the board member, our pilot, was Neil Armstrong?

As a little background, it must be mentioned that all of us in the company had become friendly with Neil over the years. For a couple times a year we were all just part of the same “band of brothers,” with a couple “sisters” thrown in. So Neil was someone that we knew in business, at social events and on the golf course. Before you ask, I’ll also tell you that Neil Armstrong is a wonderful person. His intelligence and good judgment is only eclipsed by his humility. In fact, if you met Neil and you didn’t know in advance who he was and that he was the first man to walk on the Moon, you’d never be able to guess it. He has shunned publicity, signs no autographs and is embarrassingly modest about achieving one of the most memorable feats in the Twentieth Century (along with Buzz Aldrin).

Neil was also an accomplished combat and test pilot before becoming an astronaut. So, all things considered, we thought we were in pretty good hands when we crammed ourselves into his plane. We were advised by our pilot to take one final bathroom visit before we departed. The voice of experience was speaking. The next thing I remember was rolling down the runway and just as the plane lifted we were looking over a deep valley. The airport in Hot Springs is short, and it was built by flattening the top of a mountain. This was as close to a carrier takeoff as I’ll probably ever experience.

For almost three hours the conversation was relaxed and cordial. All of us were trying to remember every move our esteemed pilot made and all the things that were said, to tell our grandchildren. Sadly, today I can’t remember all that much. We eventually made it to Lunken Airport in Cincinnati. Before Neil took off for his own airstrip in nearby Lebanon, Ohio, I remember that he did a full inspection of his plane, the discipline of years of military training. Impressive. Then we watched in awe as he taxied down the runway and flew off.

Just as the plane was disappearing into the clouds my friend Nick uttered one of the most incredible things. He said: “Only one thing could have been better than that.” Benjie and I glanced at him, incredulous. What could have been better than that? His answer: “We could have crashed and lived.” That’s the part of the story that they’ll never understand in the nursing home.

But it raises an interesting business point. I’ve witnessed some incredible successes over the years. Some were enterprises that I’ve been part of. Some relate to the success of friends. Some were pure dumb luck that couldn’t be explained by any rational person. In almost every case there is one person who isn’t quite satisfied. There is someone who thinks that with a little more luck or effort things could have turned out even better. Certain people are just never satisfied.

The purpose of this chapter is to tell you not to be one of those people. Enjoy success and good times when life favors you with a memorable moment. Make those moments special for all the people around you. They are incredible opportunities for teams to bond forever. And if you are able, create those moments for other people. They will not forget the time or the place, or the person who made them possible.

My friend Benjie now owns the very same airplane that Neil Armstrong owned and flew us in. Nearly 25 years later, Neil is still going strong. He tells us that he has flown over 100 different aircraft. He counts Apollo 11 as only one of those. My friend Nick is still the subject of friendly ridicule. This is because, all along, we knew he was kidding!

Copyright, Mark O. Hubbard, 2009