Eric Rhoads and Deborah Parenti staged their fifth annual Radio Ink Hispanic Radio Conference last week in Coral Gables.  I attended to catch up on the growth story of Hispanic media in general, and radio in particular.  It was my return visit, having last participated five years ago.  They put on a great event at a wonderful venue (The Biltmore).

Geraldo Rivera (Cumulus Media Networks and the Fox News Channel) keynoted with an impassioned presentation on immigration reform.  There were a number of excellent panels.  Larry Rosin of Edison Research showed that Hispanic targeted media is benefiting from positive demographic trends.  It appears to me that Hispanic radio will continue to be a growth business well into the future.

The show was well attended and provided an opportunity to say hello to a number of friends.  You may want to consider putting it onto your calendar for next year.

George
Media Services Group

Radio Ink's editor Ed Ryan with Geraldo

JVC Media to purchase Asterisk Communications' Florida Radio Group

JVC Media, the leading independent, locally owned radio broadcaster on Long Island, has entered into an agreement to buy Asterisk Communication’s five Florida FM  radio stations, WTRS, WMFQ, WXJZ, WBXY and WYGC.  JVC owns 4 FM radio stations on Long Island, WPTY, WBON, WJVC, WRCN and operates Long Island Events, which manages the 7,000 seat outdoor entertainment venue known as the Pennysaver Amphitheater.  JVC was formed by broadcasting veterans John Caracciolo and Victor Canales and is backed by Northwood Ventures. 

102.3 WTRS is a heritage Country station serving the Gainesville/Ocala Florida market with a legendary track record of success and community involvement.  Hot AC WMFQ, Q92 serves North Central Florida as one of the top rated music stations in the area thanks to its great signal and award winning staff. WXJZ is a unique FM station serving the Gainesville area with a smooth FM music mix format that has developed a deeply devoted following. WBXY and WYGC, both Gainesville FM stations make up the rest of this market dominating cluster.

JVC Media has been in a rapid growth mode, recently expanding on Long Island with its entertainment and broadcast division adding jobs and staff and working hard to make radio local and community friendly once again.

JVC Media CEO, John Caracciolo said, “We are honored and privileged to welcome these top performing radio stations into the JVC family. The prior owner of these stations was committed to community service, high quality broadcasting and creating an excellent work environment for its staff, and we are proud to be able to continue the tradition that Asterisk started in this great market”.

JVC Media VP, COO Victor Canales added, “We love this radio market, and we are excited to continue the trend of fun, local radio in North Central Florida”.  “We plan on adding staff in Florida and New York and to make a big splash with marketing and programming when we begin operating the stations”, he added.

I represented the seller, Asterisk Communications.  Congratulations to John and Fred on a great transaction!

George
Media Services Group


















 











 

Tallgrass Broadcasting, LLC sells to Tejas Broadcasting Ltd., LLP

Tejas Broadcasting Ltd., LLP has agreed to purchase KMUL AM and KICA FM radio stations from Tallgrass Broadcasting, LLC (subject to FCC approval).  KMUL AM and KICA FM are licensed to Farwell, Texas. 

 

The Seller, Tallgrass Broadcasting, is in receivership with David Rhoades of Tulsa acting as Receiver.  The Buyer, Tejas Broadcasting, is headed by Jim Anderson and has other broadcast interests in Corpus Christi and Amarillo.

Bill Whitley of the Dallas office of Media Services Group served as the exclusive broker representing the Receiver.

 

Congratulations!

 

George

Media Services Group

White papers available online

Here are some online resources which you might find useful:

"Buying Your First Radio Station" (white paper). Click HERE to download (registration required).

"Financing Broadcast Properties 101" (white paper). Click HERE to download (registration required).

Both papers are pretty basic, but may be useful to someone considering station ownership for the first time.

George
Media Services Group

Spectrum Auction's impact on TV station values

Many television station owners are asking, "How does the FCC's spectrum auction impact the value of my station?"

It is a good question.  And for many owners, the answer is equally good.  Many are considering the option of monetizing some or all of their TV assets to capitalize on the increasing prices. Several have already done so.

If you would like to confidentially discuss the value of your station in today's market, please give me a call.  904.285.3239

 

For a background post from David Oxenford about the Congressional authorization for the FCC Incentive Auctions, click HERE.

George

Media Services Group

Radio Ink: When Jim Met Larry -- It Ended With A Handshake

Radio Ink posted a great interview with Jim Ingstad about his recent deals with Larry Wilson and Duke Wright in Fargo.  Click HERE to listen.

George
Media Services Group

And while we're issuing congratulations (see earlier post) . . .

Congratulations and best wishes to our own Eddie Esserman and he joins the NAB Board. 

Eddie and four others have just been named to the Board:

• Russell Perry, Chairman, Perry Publishing and Broadcasting Oklahoma City, OK
• Bob Pittman, CEO, Clear Channel, New York, NY
• Jeff Simpson, President & CEO, Bonneville International Corp. Salt Lake City, UT
• Margaret Perkins, President / CEO, First Natchez Radio Group, Natchez, MS

We wish them much success in helping to lead our industry.

 

George

Media Services Group

Going to the Hispanic Radio Conference?

Eric Rhoads and Radio Ink are staging their Hispanic Radio Conference May 16 and 17 at the Biltmore in Coral Gables.  This is a great event for anyone involved with Hispanic radio.  I plan to attend again this year.  If you are interested in getting together during the event to discuss station values and the trading marketplace, please get in touch.

George
Media Services Group

Congratulations to Duke Wright, Jim Ingstad and our own Jerry Johnson!

Midwest Communications has completed the acquisition of the assets of Radio Fargo-Moorhead, the parent company of KFGO-AM, KVOX-AM, KBVB-FM, KMJO-FM, KRWK-FM and WDAY-FM for $25 million.

Radio Fargo-Moorhead is headed by Jim Ingstad. Midwest Communications, headed by Duke Wright, owns 47 radio stations in Wisconsin, Minnesota, Michigan, Illinois and Indiana.

 
Jerry Johnson of Media Services Group’s Minneapolis office represented the seller in this transaction.

Well done!

George
Media Services Group

LinkedIn Group on station trading

There is a group on LinkedIn "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 stations and the discussions are relevant and timely.  We have almost 2,300 members, including station owners, lenders, private equity professionals, and broadcast attorneys.

If you would like to join us, please click HERE.

George
Media Services Group

NAB Show 2013 - From a media broker's perspective

With the bags finally unpacked and the body back on Eastern time, I would like to share some thoughts from the 2013 NAB Show in Las Vegas.  My observations are from the perspective of a media broker specializing in the purchase and sale of radio/TV stations and communications towers.  No doubt that this view of the convention differs from those of  a broadcaster.  For one thing, we spent most of the time sequestered in meetings in our suite at the Encore and very little of it at the Convention Center.

This year, I attended the Rain Internet radio conference on Sunday, at least the first half of it (our Media Services Group meeting filled the afternoon).  Kurt Hanson does a good job with the conference.  In particular, I enjoyed the dashboard discussion.  Paul Jacobs was on that panel; you can check out his report HERE.  While the dollars are still relatively small, the growth rate is not.  I will plan to attend Rain again in the coming years.

My partners and I convened on Sunday afternoon to discuss the state of the broadcasting industry, what is happening in the media brokerage business, and where pricing multiples are for broadcast properties.  For radio, broadcast cash flow multiples are mostly in the 6x to 7x range, with "outliers" in the 5s on the low side and as high as 8x for the upper limit.  TV deals are bringing higher multiples than radio.  Higher retrans fees, a blow-out political year in 2012, and spectrum auction speculation appear to be fueling the TV appetites.  Throughout the convention, there was a good deal of discussion about the TV spectrum auction, and the NAB featured a panel on the subject.

We expected robust activity in our suite and we were not disappointed (most of our meetings are set up in advance).  The suite was busy all day on Monday and Tuesday and we even had a few meetings on Wednesday morning.  History has shown that such activity is a good predictor of trading action in the coming months.

There is no shortage of station buyers and sellers; all we are missing are the lenders.  Though slowly but surely, they too are returning.  It is worth noting that GE threw a party at the Show this year after being absent for the last three or four years.  The broadcast lending that is going on appears to be in the 3x to 4x range.

Several of us attended Erwin Krasnow's (Garvey Schubert Barer) annual breakfast Monday morning at the Las Vegas Country Club.  Thanks, as always, to Erwin, John Pelkey and Melodie Virtue for their hospitality.  Matthew Berry, Chief of Staff for FCC Commissioner Ajit Pai, made an interesting presentation.  Among other things, he addressed Commissioner Pai's interest in saving AM radio.  That too received a lot of "buzz" throughout the week, particularly following the Commissioner's panel on the subject.

In addition to GE's party mentioned above, Wiley Rein also threw a nice reception.  As always, it was well attended by the broadcasters, brokers and bankers.

No NAB Show is complete without attending the Broadcasters Foundation breakfast on Wednesday morning.  It is a great organization doing wonderful work:

"The mission of the Broadcasters Foundation of America is to improve the quality of life and maintain the personal dignity of men and women in the radio and television broadcast profession who find themselves in acute need."

Phil Lombardo and Jim Thompson hosted the event, awarding the Ward L. Quaal Leadership Awards to:

• Skip Finley
• David Kennedy
• Bob Schmidt
• Alan Frank
• Charles Osgood
• Mike McKinnon

The Lowry Mays Excellence in Broadcasting Award went to Stanley S. Hubbard.

That's my story from Las Vegas.  See you at the Radio Show this fall in Orlando!

George
Media Services Group

Valerie Geller has penned an insightful piece in Radio World about radio's future.  Click here to check it out: 

You've Got to Spend It to Make It

George
Media Services Group

The Media Services Group suite at the NAB Show is in the Encore Tower:

 # E3305.

Please stop by and say hello.

George
Media Services Group

Tomorrow is our NAB travel day.  Media Services Group will be in residence at the Encore tower suites.  Unfortunately, I do not yet know the suite number but will post it over the weekend.

If you want to confidentially discuss valuations and trading of radio and TV stations or communications towers, please get in touch.

Safe travels to Las Vegas and have a great convention!

George
Media Services Group
Cell:  904-631-7093

Good article from John Pelkey in RBR on "Sizing Up the Opposition."

George
Media Services Group

This blog is devoted to owners of radio/TV stations or persons interested in getting into ownership.
As a station broker, I constantly look for deals which might be ideal "first stations" for first-time-buyers.  I would like to highlight some of these here.  Most of these opportunities include the possibility of owner financing. Confidentiality requires the descriptions to be generic, but if you are interested, contact me for an NDA.

• Christian music FM in a rated, southeast market
Over $500,000 in revenue
Priced for a quick sale
Asking $700,000

• Three FMs and one AM cluster in the Mid-Atlantic region 
Attractive, Arbitron rated market 
Net revenue between $800,000 and $900,000, with positive cash flow

• Alabama cluster with four FMs and two AMs
Revenue between $800,000 and $900,000
Cash flow budgeted to be slightly negative this year
Good upside potential
Asking price: $1,500,000

• FM station and AM facility with FM translator in midwest market
Excellent competitive position
2013 revenue budgeted at $1,850,000 with BCF of over $600,000
Asking $4,000,000

• AM/FM combo in midwest small market
Revenue in excess of $350,000
All reasonable offers considered

• 3 FM cluster in southeast Georgia
Dominant competitive position
Owner will consider selling financing and will consult following the closing
Asking price: $1,400,000

• Profitable AM/FM radio station combo in Georgia being sold under Distress Sale policy
Stations expected to sell under the FCC's Distress Sale policy which calls for a sale to a qualified entity for a maximum sale price of no more than 75% of appraised value
Gross revenue of almost $400,000
Appraised for $875,000
Sale price: $656,250

• 2 FMs in the deep south.
Around $500,000 in revenue.
Positive Broadcast Cash Flow.
Seller financing
$1,500,000

George
Media Services Group

Trip Savery shares his thoughts

Greater Media's Trip Savery (Charlotte) shares 23 interesting observations in Fred Jacobs' blog:

CLICK HERE

George

Media Services Group

David Oxenford has published his annual Broadcaster's Calendar.  Click: HERE for a copy.

George
Media Services Group

Sad news from Art Camiolo:

Our good friend, Dick Sharpe passed away yesterday.

Information on services is available at Weigand Brothers Funeral Directors, 519-746-4484.

Visitation is Thursday and Friday and funeral is on Saturday.

RIP Dick. We'll miss you.

Erwin Krasnow, partner at Garvey Schubert Barer, each year publishes his collection of "Holiday Humor."  And this year is no exception.  So take a moment to click the link below and enjoy Erwin's contribution to a few good laughs, or as he puts it, a "Gong Show without a Gong." 

Click:  Holiday Humor (Note that previous years' editions are available from the same site)

Thanks, Erwin.  And Happy New Year,

George

Court-ordered sale (WHNR-AM)

NOTICE OF SHERIFF’S SALE -- Note the revised date!!

Sale of stock of GB Enterprises Communication Corporation (which would involve the acquisition of licenses from the Federal Communications Commission to operate WHNR-AM, Winter Haven, FL) to the highest and best bidder for cash on hand at the time of sale.

January 24, 2013 at 11:00am. 
455 N. Broadway Ave.
Bartow, FL  33830

Circuit Court of Polk County, Florida
Case No. 2009CA005214

George R. Reed, Receiver
c/o Media Services Group
149 Roscoe Blvd. South
Ponte Vedra, FL  32082
(904) 285-3239
george@mediaservicesgroup.com

Station trading continues to pick up steam. On the radio side, BIA reports that station sales were up significantly in May over the same time last year.  Click HERE

Broadcast cash flow multiples appear to be holding steady in the 7x to 8x range (with occasional deals both above and below).

If you are looking for a good "first acquisition," we have just put a 3-FM cluster on the market in southeast Georgia:

• Dominant competitive position
• $128,000 in cash flow last year from only two stations; the third station went on the air this year
 • Owner will consider selling financing and will consult following the closing
• Asking price: $1,400,000

Let me know if you would like to take a closer look.

George
Media Services Group

Media Services Group closes sale of WAYJ (FM), Ft. Myers, FL

Classical South Florida Inc. has completed the acquisition of the assets of radio station WAYJ (FM), licensed to Ft. Myers, FL from WAY-FM Media, Inc. for $4.35 million.

“WAY-FM started in Fort Myers back in 1987,” said Bob Augsburg, founder and president of WAY Media. “Southwest Florida is still very strategic for us, and we’re simply moving a short way up the dial. Most listeners will hear us on 89.5FM, while those in Charlotte County will be able to tune us in at 100.5FM. We’re excited about this switch, which will allow WAY Media to launch a suite of new digital initiatives”

“We’re tremendously excited to have the opportunity to bring classical music back to the Southwest Florida airwaves,” said CSF president and general manager Douglas C. Evans.  “Classical South Florida was launched in Southeast Florida in the fall of 2007, and its programming can be heard from the upper Keys to the Palm Beaches and Treasure Coast, and now in southwest Florida from Fort Myers to Naples and Marco Island.”

The new call letters of the station are WNPS.

Eddie Esserman of Media Services Group was the exclusive broker and represented WAY-FM Media.

Looking for your first radio station acquisition?

As station trading activity has picked up, we have developed a good inventory of small market stations and clusters in the southeast. Several of these are ideal “first stations” for a prospective buyer looking to get into radio station ownership.

Station prices are at the most affordable level in decades. Seller financing is back in vogue. And business overall appears to be picking up.

Though are larger deals are still on a “call for information” confidential status, here are some opportunities targeted toward budding entrepreneurs:

Alabama

• FM and AM with translators.

Georgia

• FM in coastal market. Includes real estate.
• FM and AM with positive cash flow.
• Three FMs.

North Carolina

• FM and AM in resort market.
• FM in coastal market with positive cash flow.
• Bargain priced FM in small market.

Puerto Rico

• AM in coastal resort market.
• FM in the west.

West Virginia

• Two FMs and Two AMs in growing market.

If you have sufficient equity for a down payment and working capital, please email your interest(s) to me and I will send the appropriate Non-disclosure agreement. For other areas in the country, check out our Classifieds page.

George
Media Services Group

A broker looks back at the NAB Show

Now that a couple of weeks have passed since returning from the NAB Show in Las Vegas (and I have finally caught up from being away!), I would like to share a few thoughts from the convention.

First, it is probably appropriate to explain the NAB Show from a broker's perspective, or at least from a Media Services Group broker's perspective.  In actuality, we see very little of the convention.  Our time is spent in our suite in non-stop meetings with station buyers, sellers, lenders, and investors.  And since MSG is a national firm, we meet with clients and customers from all over the country.  The week gives us an excellent perspective on the state of the industry, station trading, and station values.

This year's show was without question the most upbeat since the economy hit the fan during the Austin Radio Show, in fall 2008.  Sentiment about the economy was better, and financial performance at the stations has improved, with many operators expecting their second "up" year in a row.

Our suite was busy, with at times twenty or more people huddled together in simultaneous meetings.  Deal flow has increased and the quality of inventory appears to be getting better.  Most of the deals we completed last year were in small markets or involved workouts and bankruptcies; this year we are getting deals done in good, cash flowing clusters.

So why are things better?  I've identified three factors:

1)  As mentioned above, business at home is better.  Most stations are running ahead of year-ago numbers and pacings are good.

2)  Lenders are coming back.  Not in droves, but they are at least beginning to write some new broadcast loans.

3)  The Bid/Ask spread has narrowed.  Sellers have come to grips with the price reset, and buyers are realizing that we are off the low with the trajectory decidedly up.

Our opinion on radio multiples is that stations are trading between 7.0x and 8.0x Broadcast Cash Flow, with "beach front" property in the mid-8s.  We now have enough data points to view this range with a high degree of certainty.  No doubt there could be some outlier deals on either side, but most transactions are in this ballpark.

There is every reason to expect a robust Radio Show in Dallas in the fall.  I hope you join us there. 

George
Media Services Group