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WTCM-FM 103.5, etc.

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Re: WTCM-FM 103.5, etc.

Post by MWmetalhead » Sat Jul 04, 2020 9:48 pm

WTCM-FM: $600,000 to $800,000 today; $1.2 million to $1.6 million once the economy returns to normal. On a good day in a good economy, if the tower site is tossed in free & clear, maybe even upper $1's would be attainable (that'd be a stretch in my eyes).

WTCM (AM): $125,000 to $200,000 today; $250,000 to $400,000 once the economy returns to normal.

WJZQ: $200,000 to $300,000 today; $400,000 to $600,000 once the economy returns to normal.

AM signals aren't worth shit. See AM 760 in San Diego.

What would *really* be interesting is coming up with similar math for the Alpena - Rogers City stations! I'm gonna sit out that one.

We know what KLT is worth during normal economic conditions because that station just sold.

In the current climate, any buyer would know any seller is truly desperate, so I've discounted prices 50% from fair market.


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Re: WTCM-FM 103.5, etc.

Post by Deleted User 12047 » Sun Jul 05, 2020 9:14 am

I have to disagree with a couple of statements here, MW.
MWmetalhead wrote:
Sat Jul 04, 2020 9:48 pm
WTCM-FM: $600,000 to $800,000 today; $1.2 million to $1.6 million once the economy returns to normal. On a good day in a good economy, if the tower site is tossed in free & clear, maybe even upper $1's would be attainable (that'd be a stretch in my eyes).

WTCM (AM): $125,000 to $200,000 today; $250,000 to $400,000 once the economy returns to normal.

WJZQ: $200,000 to $300,000 today; $400,000 to $600,000 once the economy returns to normal.
Breaking the stations up today doesn't do the current business climate justice. The "business" should be valued, not the "station". This cluster (that includes WCCW-FM and now WKLT-FM) has one engineering staff, one sales department, one back office operation (traffic, billing, etc.) that allows it to produce revenue from all mentioned stations. I can't find any info about market revenues either past or present to figure out or guess of how much of the total radio ad dollars the Biederman stations are getting. But if we assume that the cluster can bill $1MM annually, that would make the cluster worth $5MM to $6MM in today's environment. Discount that for the times, and still it looks like twice as much .. so perhaps your 50% discount makes your estimates closer to reality. But you can't think that Biederman would sell these off piecemeal - they are worth MUCH less that way.

And that AM alone is probably the second or third highest billing station in the market!
We know what KLT is worth during normal economic conditions because that station just sold.
Again, by the same token, the value of KLT is not reflected in this transaction. You would certainly think the WKLT was the lead biller for the Northern Broadcast group.. yet it sold for LESS than FCX. Mr. North Dakota wanted out, and wanted cash. He couldn't get cash from the Coynes (that story still needs to be told - will the WLDR kerfuffle go to trial?) and took whatever offer he could get. Biederman was in the unique position of snatching up an existing successful brand at the bargain basement price with a little bit of money left over to do the studio build, etc. A successful negotiator probably could have gotten a lot more for WKLT, but Northern wanted out!!!!!

Overall, this discussion is certainly the canary in the coal mine for the radio business and "stick value" of stations today. If I were an owner anywhere, I'd be worried as hell.



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Re: WTCM-FM 103.5, etc.

Post by MWmetalhead » Sun Jul 05, 2020 2:43 pm

Breaking the stations up today doesn't do the current business climate justice. The "business" should be valued, not the "station". This cluster (that includes WCCW-FM and now WKLT-FM) has one engineering staff, one sales department, one back office operation (traffic, billing, etc.) that allows it to produce revenue from all mentioned stations.
I agree. But if the buyer is an in-market player already, they don't really need the support staff to which you refer, because those functions can already be supported by existing staff.

If I were entering the market for the first time as a commercial broadcaster, I would definitely want to purchase the whole enchilada, just as you describe.

A question was asked to value the stations on an individual basis, so I answered in kind.
But if we assume that the cluster can bill $1MM annually, that would make the cluster worth $5MM to $6MM in today's environment.
You are confusing "billing" (revenue) with EBITDA. No one pays anywhere near a 5x to 6x multiple of revenue. As a multiple of EBITDA, you're in the right ballpark.

Selling stations piecemeal versus bundled depends on the available market of buyers. I would contend Northern Radio did alright selling 97.5, 98.9, 94.3 and 106.7 piecemeal. I was surprised by how cheaply 97.5 went, but the proceeds from 94.3 & 98.9 made up for that. All three of those sales were able to close very quickly, too, which in hindsight was a great thing for Northern as seller.

If Northern insisted on selling 97.5, 98.9, 94.3, and 106.7 (and possibly 105.5 & 92.5) as a full package, they probably would still have zero transactions completed as we sit here today. The Purchase & Sale Agreement for 106.7 was inked right before the pandemic, and as we all now know, that deal *still* has not officially closed.
And that AM alone is probably the second or third highest billing station in the market!
That's a much stronger performance than I would've guessed (I would've guessed sixth or seventh). Assuming their billing is as strong as you say, if all I got was the AM with no accompanying FM, I'd still pay no more than $250,000 in the current market and maybe $500,000 in a normal market.

AM Radio as a mainstream broadcast medium will probably be completely dead within a decade's time. Any buyer is going to look at projected cash flows over a period of time and discount those cash flows heavily to account for that inherent risk.

The value with WTCM (AM) lies primarily within the intellectual property, not the physical facility. This is why I stated earlier I'd have little interest in purchasing WTCM (AM) on a standalone basis; I'd want a decent FM signal to go with it. 92.9 fits the bill nicely.

A 5,000 watt daytime signal & 50,000 watt nighttime signal at AM 760 in San Diego was recently flipped for less than $1 million. This is the third highest rated AM station in the market (second highest when excluding KFI from Los Angeles), earns about a 2 share in ages 6+, and presently cumes over 100,000 listeners a week. That number is probably closer to 130,000 - 140,000 when commuting patterns & listening patterns are normal.


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Re: WTCM-FM 103.5, etc.

Post by TC Talks » Sun Jul 05, 2020 3:01 pm

Traverse City is a bit different. Since we have so many retirees used to using am radio, WTCM has done a great job of making it sound like an AM station from a decade ago. They remind me a bit of what WGN was in 2000.

You have to admit that most format changes in the last 10 years have been detrimental to the industry. In my opinion if you have a successful property you don't mess with it because you likely will lose more listeners than gain.

The big challenge up here is the real estate value of the tower sites. WCCW am is selling off the tower site for $550,000. It will essentially become a subdivision.


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Re: WTCM-FM 103.5, etc.

Post by MWmetalhead » Sun Jul 05, 2020 3:45 pm

Irresponsible Leveraged Buyout transactions, tone deaf social media strategies, greedy recording industry royalties, and incompetence in the C-suites of certain companies by far have been the most detrimental things. Format changes are a mixed bag.


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Re: WTCM-FM 103.5, etc.

Post by CK-722 » Sun Jul 05, 2020 3:49 pm

So what is the plan for WCCW 1310? Are they going to relocate near Morgan Hill, or at the WTCM 580 site? They already have the entire Proof of Performance for WTCM conductivities for that site from circa 1981. If they could hook it up with one of the unneeded translators where full power FMs are now simulcasting near Morgan Hill. That would make Night service as a Class B AM possible but largely unnecessary. They could also put a newfangled short AM tower for Night with very low power PSSA right in Traverse City (WCCW had 31 watts PSSA authorized from near Morgan Hill back before they relocated).


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Re: WTCM-FM 103.5, etc.

Post by TC Talks » Sun Jul 05, 2020 4:10 pm

I believe there are no plans for WCCW AM.


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Re: WTCM-FM 103.5, etc.

Post by Ben Zonia » Sun Jul 05, 2020 4:24 pm

TC Talks wrote:
Sun Jul 05, 2020 4:10 pm
I believe there are no plans for WCCW AM.
Now them's some horse trading' words!


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Re: WTCM-FM 103.5, etc.

Post by Ben Zonia » Sun Jul 05, 2020 4:36 pm

BTW, KFMB (AM) 760 is now KGB (AM).

KGB 760, The Agent.

Agent 760.

Image
Last edited by Ben Zonia on Sun Jul 05, 2020 4:40 pm, edited 1 time in total.


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Re: WTCM-FM 103.5, etc.

Post by TC Talks » Sun Jul 05, 2020 4:38 pm

Ben Zonia wrote:
Sun Jul 05, 2020 4:24 pm
TC Talks wrote:
Sun Jul 05, 2020 4:10 pm
I believe there are no plans for WCCW AM.
Now them's some horse trading' words!
I've got a 1986 Reliant K I would trade for the license. If you look at this from a practical perspective, even the engineering time and cost to relocate it to WTCM's array wouldn't be worth it. No one listens, no one wants advertising, it has very little value.


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Re: WTCM-FM 103.5, etc.

Post by Ben Zonia » Sun Jul 05, 2020 4:45 pm

We are in touch with some different horse traders, apparently. People who can get things done in unconventional, outside the box, ways. Some who have been in the radio business 50 years or more.

BTW, 760 in San Diego WAS KFMB. Originally it was on 540 kHz. When Mexico decided to use it's I-B authorization on 540 in Mexico, there was nowhere else go besides 760, and that was prohibited by WJR anywhere in Region II. They later agreed that they would NEVER apply for more than 5000 watts Night, though that was prohibited by WJR's I-A protection. Well, all that went out the window with a hyperactive FCC. As a Psych Major or Teacher might say, the FCC was "somewhere on the spectrum" when they ordered that authorization. And it went from 5000 to 10000 to 50000 watts Night when the rules changed.
Last edited by Ben Zonia on Sun Jul 05, 2020 4:58 pm, edited 1 time in total.


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Re: WTCM-FM 103.5, etc.

Post by TC Talks » Sun Jul 05, 2020 4:58 pm

Ben Zonia wrote:
Sun Jul 05, 2020 4:45 pm
We are in touch with some different horse traders, apparently. People who can get things done in unconventional, outside the box, ways. Some who have been in the radio business 50 years or more.
I've been in radio since 1982, and my calculator tells me no amount of voodoo will make the station worth the monthly electric bill.


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Re: WTCM-FM 103.5, etc.

Post by Ben Zonia » Sun Jul 05, 2020 5:00 pm

TC Talks wrote:
Sun Jul 05, 2020 4:58 pm
Ben Zonia wrote:
Sun Jul 05, 2020 4:45 pm
We are in touch with some different horse traders, apparently. People who can get things done in unconventional, outside the box, ways. Some who have been in the radio business 50 years or more.
I've been in radio since 1982, and my calculator tells me no amount of voodoo will make the station worth the monthly electric bill.
So you're a "newbie", as a real old-timer might say.

Are you the son of the guy who had the Spanish Language program on WCCW in the early 1960s? He sounds a lot like you.
Last edited by Ben Zonia on Sun Jul 05, 2020 5:04 pm, edited 2 times in total.


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Re: WTCM-FM 103.5, etc.

Post by TC Talks » Sun Jul 05, 2020 5:02 pm

Ben Zonia wrote:
Sun Jul 05, 2020 5:00 pm
TC Talks wrote:
Sun Jul 05, 2020 4:58 pm
Ben Zonia wrote:
Sun Jul 05, 2020 4:45 pm
We are in touch with some different horse traders, apparently. People who can get things done in unconventional, outside the box, ways. Some who have been in the radio business 50 years or more.
I've been in radio since 1982, and my calculator tells me no amount of voodoo will make the station worth the monthly electric bill.
So you're a "newbie", as a real old-timer might say.
Of course... but there are all kinds of crazy ways to lose money. Just ask Roy Henderson


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Re: WTCM-FM 103.5, etc.

Post by NMCSpeaks » Sun Jul 05, 2020 6:25 pm

Yet Henderson has the millions.
What do you have, TC Talks?
Just a desk with old file papers stuffed in from well, let’s see, 1982?



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