2011 Broadcasters' Calendar available from Pillsbury

Here is a good resource for broadcast station owners and managers. The
2011 Broadcasters' Calendar is available from Pillsbury. Click HERE. Thanks to the Nevada Broadcasters for the heads up!

George
Media Services Group

Lew Dickey removed from Farid's Christmas card list

The news today that Citadel has rejected two offers from Lew's Cumulus Media certainly breaths some new life into what has been a very slow station trading year. It also represents the opening act to what will be a fascinating show.

Lew Dickey has plenty of fans as well as detractors. And I’m squarely in the camp of the former. Yes, he’s been a great customer over the years (he bought over a hundred stations through Media Services Group), but there is more to it than that.

Lew is a broadcaster. He was literally raised in the business. He has seen it from all sides (and is probably one of the best researchers ever to serve the industry -- pre-Cumulus). He knows how to run a radio station and is as comfortable doing so in Atlanta sized markets as he is in Savannah sized markets.

And he’s smart. Not just well educated (B.A. from Stanford and MBA from Harvard), but radio street-smart. If he succeeds in his effort to acquire Citadel, he will know what to do with it and how best to integrate the two very different cultures.

I believe that Lew has had his eye on Citadel for a long time. And now that it has emerged from bankruptcy court with a squeaky clean balance sheet, and station prices are at a decade’s low level, what better time?

Plus, Lew never took my stock in his company to zero.

The drama will be fun to watch. If Lew is successful, look for some new station acquisition opportunities in the new year. For one thing, the deal will likely require some spin-offs (in markets where both companies compete). For another, transactions like this have a way of fostering new, unrelated deals. They establish a pricing comparable. Potential buyers and sellers will pay close attention to the multiple on the deal.

Last but not least, Merry Christmas and Happy Holidays to all! Let’s have a prosperous 2011.

George
Media Services Group

Two more transactions announced

Media Services Group has announced a couple of transactions. Though small deals, they provide evidence that the deal market is slowly but surely coming back to life.

1) Fort Wayne, IN Area FM Station Is Sold

Godwin-Starkes Property Management, LLC, an Indiana limited liability company has agreed to purchase the assets of WNUY-FM licensed to Bluffton, IN from Independence Media of Indiana, LLC, a Delaware limited liability company and IM IN Licenses, LLC, an Delaware limited liability company. Godwin-Starkes Property Management, LLC through an affiliated company, owns WQSW-LP Fort Wayne, IN.

The purchase price is $350,000.

Bob Heymann of the Chicago office of Media Services Group and Stephan Sloan of
Media Services Group’s Providence office served as the exclusive brokers representing the seller in this transaction.

2) Tennessee Temple University has agreed to purchase the assets of Radio Station WUUS (AM), licensed to Rossville, GA (serving Chattanooga, Tennessee), from 3 Daughters Media, Inc. for $175,000.

Eddie Esserman of Media Services Group’s St. Simons Island, GA, office represented Tennessee Temple University in this transaction.

Both transactions are subject to FCC approval.

Congratulations to Bob, Stephan and Eddie on getting deals done in a tough financing environment!

George
Media Services Group

Great article in RBR on the FCC assignment and transfer process

Today's RBR ran a great article on the FCC transaction approval process. Erwin Krasnow, preeminent FCC attorney, interviewed the FCC's Taft Snowdon, Supervisory Attorney, Audio Division, Media Bureau. Thanks to my partner Bob Heymann for calling it to my attention.

Click HERE for the link.

George
Media Services Group

Two more station transactions close

Although the pace of station trading remains slow, Media Services Group closed two more transactions last week.

M&M Broadcasters closed on the purchase of KRHC AM/KBEY FM, Burnet;
KHLE FM, Kempner; and KHHG FM, Hamilton; all Texas, from Munbilla Broadcasting Properties, LTD.

Bill Whitley of the Dallas office of Media Services Group served as the exclusive broker for this transaction.

Big Toe Communications, LLC completed the acquisition of the assets of radio stations WHPI-FM, Glasford, IL; WPIA-FM, Eureka, IL; WZPN-FM, Farmington, IL and
WWCT-FM, Bartonville, IL, from Independence Media Holdings, LLC.

Stephan Sloan of Media Services Group’s Providence office represented the seller in this transaction.

Well done Bill and Steph!

George
Media Services Group

New white paper: Financing Broadcast Properties 101

If you are looking for a primer on the basics of financing a radio or television station purchase, please check out our white paper: "Financing Broadcast Properties 101"

You can click here for the free download (email registration required): Financing Broadcast Properties 101

George
Media Services Group

BBN Closes Tennessee FM

Bible Broadcasting Network, Inc. has closed on its acquisition of WDYN-FM, Chattanooga, TN, from Tennessee Temple University.

Eddie Esserman of Media Services Group represented Tennessee Temple University in this transaction.

Congratulations Eddie!

George
Media Services Group

Radio station owners fall into two camps: Pick one!

The last two years in the radio business have not exactly been a walk in the park. Defaults, bankruptcies and receiverships have been rampant. A ton of equity vaporized in a sea of debt. It has not been a good time for station owners, especially those "faint of heart" or with highly leveraged balance sheets.

All of this has precipitated a lot of gloom and doom talk on Wall Street, in the industry trade publications, and in the convention hallways, suites, and bars.

From my perch, it seems that station owners fall into one of two broad categories:

1) Those who believe that radio's best days are behind it and that the end is near, or

2) Those who believe that the current low station prices present the buying opportunity of a lifetime. The business will recover and even thrive in the new environment.

Let's look a little more closely at each assumption:

1) Radio is dead. Long live Radio!

• Old media is over. New media wins.
• Radio has lost the kids.
• We're too little, too late to the digital party.
• Who needs a transmitter when you can stream?
• There are too many "cooler" new media options.
• Who buys radios when you can buy a smartphone or iPad for your information and entertainment?
• The Internet will soon occupy the dashboard.

2) Shopping at the bargain rack!

• Radio is still a high cash flow business.
• We can and will compete in the digital world.
• Fortunes were made in the last major downturn (think Lowry Mays).
• Regulatory relief may be the catalyst for reigniting the business (think elimination of the subcaps).
• Newspapers have lost their strangle-hold on retail business.
• There is no better megaphone for generating web traffic than radio.
• Radio still drives customers on Main Street.
• HD holds long-term promise.
• In the face of competition, radio has maintained its ubiquitous reach.

Conclusion

Pick a camp. Now.

Yeah, this sounds self-serving (after all, I am a broker). But, it is now time to place your bet. Here's my logic:

If you're in the "Radio is Dead" camp, the best thing you can do is cut your losses. With station values headed south, your station(s) will never be worth more than today's valuation. If you're under water with your bank, hand 'em the keys. Get out now while you can.

If you believe that you can buy good radio businesses from the bargain rack, then step up. You will buy solid businesses at historic lows. The seller's pain will be your gain. Get on board before prices take off. Build great clusters and hire from the incredible talent pool stranded on the beach. There is no better time than now.


It is time to select the scenario you believe will pan out in radio's future. To do otherwise is to leave your personal future to fate. Hold 'em or fold 'em. One school will be right. The other . . .

Those are my thoughts. What are yours?

George
Media Services Group

Inside Radio (http://www.insideradio.com/) published a story called "Digital radio advocates spread the gospel to the wider internet world" this morning. They included a link to a report prepared by the Interactive Advertising Bureau (IAB). If you're in the streaming audio business, it is an important piece (and may be useful to your sales departments).

Click HERE to get the report.

George
Media Services Group

Thoughts from the 2010 Radio Show

I'd like to share a few thoughts from last week's Radio Show. Though I have heard that overall attendance was up, there were fewer station owners on hand than usual. However, the FCC lawyers turned out in force, playing with a home court advantage.

The meeting was decidedly more upbeat than the last two years' shows (though that is not saying much considering the gloom and doom we've been through). Station revenues are up year-over-year and it has been a long time since we could make that claim.

On the station trading front, our suite activity was robust. There still aren't a lot of deals getting done, but at least the talking has resumed (after eighteen months of virtual silence). The missing ingredient continues to be bank financing. Despite renewed optimism about the prospects for the radio industry, there was little optimism that the bankers were returning any time soon. Trading will remain lackluster until the banks embrace the industry again.

Let's hope that next year's Radio Show in Chicago is a time for celebration.

George
Media Services Group

FM Auction 91 List

Click HERE for the FCC Auction 91 list.

George
Media Services Group

A climb up the tallest tower

This video doesn't really have much to do with the theme of this blog, but anyone who has been involved with broadcast towers will find it interesting. In my case, with a fear of heights, it was downright terrifying. Thanks to Eddie Esserman for sending it to me.

A guy climbs a 1,768' tower (video): http://video.yahoo.com/watch/8244494?fr=yvmtf

George
Media Services Group

When to Hire a CFO

Good article from Anne Field (Business Insider) on "When to Hire a CFO":

https://www247.americanexpress.com/MoblOpenWeb/articles.do?TargetID=when-to-hire-a-cfo-anne-field&showOnOne=true

George
Media Services Group

Robert Prather of Gray Television talks with B&C

B&C interview with Robert Prather: http://www.broadcastingcable.com/article/457293-Prather_Calls_for_Unity_on_Mobile_DTV.php

George
Media Services Group

Who says radio isn't fun any more?

Who says radio isn't fun an more? Here is WDHA (Morristown, NJ) market manager Nancy McKinley.

Rumor has it that an NTR Revenu line item has been added to her 2011 budget: Crop Dusting

George
Media Services Group

More news-talkers moving to FM

Last week's announcement that heritage, big signal, Atlanta News-Talker WSB-AM (750 kHz) was adding an FM simulcast is yet another benchmark in the growing trend of talkers migrating to the FM band. It follows similar moves by KSL in Salt Lake City and KCBS in San Francisco. While these appear to be smart moves, I believe that they sound a large warning signal for AM station values in the future.

A strong case could be made that the big AM News-Talkers like WSB have kept the AM band alive. News-Talk listeners have been content to seek out their programming on the AM band. If all of the major AMs throw in the towel for the FM band, who will be listening to AM? My guess is that AM will be dominated by niche players in the future: foreign language, religious, and other specialty programming.

Station prices are based on supply and demand. It looks like AM supply will be increasing at the same time that demand is decreasing.

Those are my thoughts. What are yours?

George
Media Services Group

Inc. magazine's business plan presentation

If you are working on a business plan (hopefully for station acquisitions!), Inc. magazine has a good resource: Business Plan Presentation. It is a basic PowerPoint template which may serve you well as a starting point for your presentation. At worst, it would serve as an antidote for writer's block.

George
Media Services Group

Have your tried mind mapping? (Article from Inc. magazine)

Here is a good article from Inc. magazine on mind mapping. I have found the concept to be very useful for project management; there are a lot of ways for entrepreneurs to put it to effective use.

I use software from Mindjet (MindManager) and can recommend it highly. For project management, ResultsManager is a great add-in.

George
Media Services Group

MSG transactions for the first six months of 2010

The bad news is that is was a very slow first half of station trading. The good news is 1) it was a lot more active than a year ago, and 2) things are shaping up nicely for the second half. Here are the transactions announced by Media Services Group for the first six months (Note: we used BIA estimates of revenue):

Sale Announced: 01/10
Calls: WMNE-AM (now WHTY-AM)
Buyer: Travis Media
Seller: Radio Disney
Market: West Palm Beach-Boca Raton
Market Rank: 47
Price: $500,000
Gross Revenue (BIA): $150,000

Sale Announced: 3/10
Calls: FM CP
Buyer: Chadrad Communications Inc.
Seller: Big Cat Broadcasting, LLC
Market Rank: Unrated
Price: $85,000
Gross Revenue (BIA): N/A

Sale Announced: 2/10
Calls: KCUV-FM, KJAC-FM
Buyer: Moreland Properties, LLC
Seller: NCR Broadcasting Inc.
Market: Denver-Boulder
Market Rank: 20
Price: $5,000,000
Gross Revenue(BIA) : $800,000

Sale Announced: 3/10
Calls: KDJQ-AM
Buyer: Iglesia Misionera Pentecotes, Inc.
Seller: KDJQ, LLC
Market: Boise, ID
Market Rank: 100
Price: $325,000
Gross Revenue (BIA): N/A

Sale Announced: 4/10
Calls: WCKZ-FM, FMW204BF
Buyer: Star Educational Media Network
Seller: Northeast Indiana Public Radio
Market: Orland, IN
Market Rank: Unrated
Price: $225,000
Gross Revenue (BIA) : N/A

Sale Announced: 5/10
Calls: AM CP
Buyer: Acme Broadcasting III
Seller: Pamplin Broadcasting Inc.
Market: Reno, NV
Market Rank: 121
Price: $20,000
Gross Revenue: N/A


Sale Announced: 7/10
Calls: WHPI-FM, WPIA-FM, WZPN-FM, WWCT-FM
Buyer: Big Toe Communications, LLC
Seller: Independence Media Holding, LLC
Market: Peoria
Market Rank: 150
Price: TBA
Gross Revenue: $1,350,000

George
Media Services Group

A number of broadcasters support the AM/FM Subcaps

A number of broadcasters teamed up to file reply comments with the FCC seeking repeal of the AM/FM subcaps on July 26. The coalition represents some 668 stations in markets of all sizes. My two broadcasting companies (Monticello Media and MSG Radio) as well as our brokerage firm signed onto the comments.

If the subcaps are repealed, it will result in new capital coming into our capital starved industry. I predict that a number of broadcasting companies may be saved from bankruptcy if the subcaps are removed on a timely basis.

The subcaps are no longer (if ever) justified. You can read the details in the Reply Comments. Essentially, if you operate in a market where ownership of four FMs and two AMs is allowed (or four AMs and two FMs), the removal of the subcaps would allow you to own six stations, regardless of flavor. If they are repealed, unprofitable clusters can swap/trade/buy/sell and improve their strategic and financial positions.

Repealing the subcaps will awaken a stagnant industry, introduce fresh capital, and open doors for new minority ownership. Let's hope that the FCC sees the wisdom of eliminating an antiquated burden on broadcasters.

Click here for the filing: Reply Comments

That is my opinion. What is yours?

George
Media Services Group

Syd Small of Acccess.1 passed away last weekend

Our condolences go out to the family, friends, and colleagues of Syd Small, who passed away last weekend. Syd was President and CEO at Access.1, where he ran radio stations and networks. He may be best known for operating WWRL in New York, which he ran for almost 30 years.

Here is the story from NYDailyNews.com.

Syd was a good guy. He will be missed.

George

Radio industry second quarter revenue results

Here is a look at second quarter revenue from around the radio industry:

FMQB

George
Media Services Group

Dave Martin's post on "Eating your own dog food" (station website)

David Martin has a good post about station websites on his N=1 blog. Click on:

"Eating your own dog food"

George
Media Services Group

Time to set appointments for the Radio Show in Washington

The Radio Show comes to Washington, DC, September 29 through October 1. This year's show is a joint undertaking between the NAB and RAB. Media Services Group will be located at the headquarters hotel, the Grand Hyatt Washington.

If you would like to set up an appointment to meet, please drop me a line at:

mailto:george@mediaservicesgroup.com

I hope to see you in DC!

George
Media Services Group

Radio stations for sale with seller financing

Station trading activity continued to be slow in the first half of 2010, though vastly ahead of last year’s anemic pace. The lack of bank debt continues to stifle transactions, though there are some seller financed opportunities popping up.

We have three such opportunities, any one of which might fit a first time buyer profile. Cash down payment requirements vary, beginning around $250,000 for a qualified buyer. The stations are located in NC, VA, and WV. Two of the opportunities are in rated markets. Contact me if you would like to look more closely.

We also have a two-FM cluster with some cash flow in a rated Midwest market.

If you belong to LinkedIn and haven’t already joined our group “Radio/TV Station Buyers,” you can click here to do so: Radio/TV Station Buyers

George
Media Servces Group