I have always had a pipe dream of buying a radio station or two \u2026 primarily AM \u2014 because I want to prove you can get listeners when you program and promote a station correctly \u2014 or maybe an AM-FM combo in a major market. I\u2019d probably run top-40 or progressive rock on the AM and something to complement it on the FM \u2026 such as Big Band.<\/p>\n
But as I write this, something dramatic is happening in radio: mega-owner Audacy \u2014 owner of six stations in Los Angeles, a handful more in the Inland Empire, and a total of 235 nationwide \u2014 has seen its stock decline by almost 90 percent over the past year, closing January 19th at just over 26 cents per share. With about 141 million shares outstanding, that puts its total market value at about $37 million.<\/p>\n
I think it\u2019s time to buy the whole company. Anyone want to invest?<\/p>\n
Here\u2019s my plan: offer a premium to buy the entire company at, say, $50 million. Then sell off most of the stations to others. You truly don\u2019t have to get much for them \u2026 the selling price would only need to average a little under $213,000 to break even, and even stations in smaller markets would be worth more than that.<\/p>\n
Considering that KBLA (1580 AM) sold for $7 million in 2020, KLOS for $43 million in 2019 and KFWB fetched over $11 million in 2012, as but three examples, I figure I could sell just four of the six LA properties (KROQ 106.7 FM, KNX-FM 97.1, KTWV 94.7 FM, KRTH 101.1 FM, KCBS-FM 93.1, and\u00a0 <\/span>KNX 1070 AM) and pay off the debt; the rest of the stations nationwide would give me a lot of operating income. Keep about 10 stations total and I\u2019m set.<\/p>\n Why ten? That\u2019s about as many as any one company should be allowed to own. More than that and you have what you have today \u2014 failing companies creating a declining industry.<\/p>\n Of course in purchasing the company you\u2019d have to deal with staggering debt, for which there may be no way out short of bankruptcy . Something that some observers say is inevitable. A search revealed that as of last September, Audacy had over $2 billion in total debt, with liabilities totaling $2.73 billion. That would bring the average station selling price quite a bit higher to break even: almost $12 million. But \u2026 and this is a big but – it seems do-able, given the right management. The trick is, the company cannot remain in its current form: it must sell assets in order to get down to the handful of successful stations and remain debt-free.<\/p>\n Any financial wizards reading this want to tell me why the plan doesn\u2019t work? Seems a no brainer \u2026 I haven\u2019t seen a bargain like this since Cumulus stock was selling for under $1 a few years ago.<\/p>\n I received a few letters regarding my recent column on KFI\u2019s (640 AM) programming changes, one particularly good one from reader Alan Wolfe.\u00a0<\/span><\/p>\n \u201cI disagree that KABC (790 AM) programing is stale.<\/p>\n \u201cArmstrong and Getty: I give this show a thumbs down. I don’t know what the show is about the constant laughing of one of the hosts is totally annoying. New hosts.<\/p>\n \u201cDan Bongino: Two thumps up for this excellent show. Great show<\/p>\n \u201cJohn Phillips: One of the best interviewers on either the radio or TV. Great show<\/p>\n \u201cBen Shapiro: Also a good show if Ben\u00a0 did not talk so fast. Ben, slow down<\/p>\n \u201cLeo 2.0: During\u00a0 the 60 minutes Leo covers more information than some of the other stations cover in four hours. Great show<\/p>\n \u201cFrank Motek: One of the best financial shows on the air and he is not selling anything.<\/p>\n \u201cSusan Shelley with John\u00a0 Coupal: In one hour you know so much about what the city, county and the state are doing to rip you off.\u201d<\/p>\n That is an excellent analysis.<\/p>\n Which made me realize I was unclear. I didn\u2019t mean that KABC was stale; what I meant was that KFI changed this month because it didn\u2019t want to become what KABC HAD become back in 1984. KABC being old and stale is what KFI \u2014 with a young, popular Rush Limbaugh and a few others such as Tom Leykis\u00a0 <\/span>\u2014 used to surpass them in the ratings.<\/p>\n What KABC has now is an image problem that they refuse to do anything about. And their technical sound is occasionally abysmal: the audio often sounds like high school quality \u2026 Leo Terrell could not even be heard talking the other night coming out of a commercial because the music level was so high. There are also too many syndicated programs, and they refuse to promote ANY of them.\u00a0<\/span><\/p>\n Which is too bad – Shapiro is considered by some as genius and even fun, and Phillips is a definitely a wasted talent waiting for someone to notice how good he really is. I like Bongino, but you can only say something sucks so many times before it gets dull. He needs to listen to early Limbaugh shows to see how it\u2019s done. And why is Dr. Kelly Victory still not on the air here? She was a highlight of the day on The Doctor Hour of Phillips\u2019 program.<\/p>\n KABC should<\/i> be a competitor \u2026 they invented the format! But they just won\u2019t go the extra mile to make it work. There is no reason for a major market station, even on AM, to be rated as low as is KABC, shares running between 0.6 and 0.9 for the past six months.\u00a0<\/span><\/p>\n KABC is probably a station that purists wouldn\u2019t want me to own: I\u2019d take it to top-40.<\/p>\n \/\/\/<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Buying Audacy … what could possibly go wrong? I have always had a pipe dream of buying a radio station or two \u2026 primarily AM \u2014 because I want to prove you can get listeners when you program and promote a station correctly \u2014 or maybe an AM-FM combo in a major market. I\u2019d probably […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-2616","page","type-page","status-publish","hentry","post"],"_links":{"self":[{"href":"https:\/\/socalradiowaves.com\/wp\/wp-json\/wp\/v2\/pages\/2616","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/socalradiowaves.com\/wp\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/socalradiowaves.com\/wp\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/socalradiowaves.com\/wp\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/socalradiowaves.com\/wp\/wp-json\/wp\/v2\/comments?post=2616"}],"version-history":[{"count":1,"href":"https:\/\/socalradiowaves.com\/wp\/wp-json\/wp\/v2\/pages\/2616\/revisions"}],"predecessor-version":[{"id":2617,"href":"https:\/\/socalradiowaves.com\/wp\/wp-json\/wp\/v2\/pages\/2616\/revisions\/2617"}],"wp:attachment":[{"href":"https:\/\/socalradiowaves.com\/wp\/wp-json\/wp\/v2\/media?parent=2616"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Stale?<\/strong><\/h2>\n