"Garrett Wollman" wrote in message
...
In article , WBRW
wrote:

Well, *second* all-sports station, since 620 WSNR is now only
"Sporting Radio News" when it feels like it. (Strange, but true -- a
"flagship" station that doesn't carry its own network's programming
most of the time.)

Word on the street is that Paul Allen is desperate to find a greater
fool to take the station off his hands. That's why they're brokering
it out -- it wasn't making them anything running SNR, and they want to
get it billing *something* in order to get a decent sale price.

Below certain billing levels, the value of stations like this is based, like
lobsters in a restaurant, on "makret price." No sane person would keep the
current programming, so billing is not material. The old day formula of 2.5
times billig or 8-10 times BCF are long gone.

Example: inferior, basin-floor limited Class B KFSG (now KXOL-FM) in LA with
no billing and a must-change format: $250 million.

"David Eduardo" wrote in message =
...
=20
Below certain billing levels, the value of stations like this is =
based, like
lobsters in a restaurant, on "makret price." No sane person would keep =
the
current programming, so billing is not material. The old day formula =
of 2.5
times billig or 8-10 times BCF are long gone.
=20
Example: inferior, basin-floor limited Class B KFSG (now KXOL-FM) in =
LA with
no billing and a must-change format: $250 million.

I'm archiving this message and will trot it out whenever you good =
radio folks argue from the Bakersfield Theory...the theory that radio is =
spread too thin because the government allows too much competition for a =
limited audience. Here is a station that has neither a service to offer =
nor a profit until it meets the monthly nut on $250 million. The =
station is correctly priced on its perceived potential, irrespective of =
its actual billing...and yet Bakersfielders would have us believe that =
listener service would be enhanced if only the FCC would engineer =
greater scarcity for the benefit of the owners.

Jerome

On 24 Jul 2003 16:19:32 GMT, "Cooperstown.Net"
wrote:

I'm archiving this message and will trot it out whenever you good =
radio folks argue from the Bakersfield Theory...the theory that radio is =
spread too thin because the government allows too much competition for a =
limited audience. Here is a station that has neither a service to offer =
nor a profit until it meets the monthly nut on $250 million.
station is correctly priced on its perceived potential, irrespective of =
its actual billing...and yet Bakersfielders would have us believe that =
listener service would be enhanced if only the FCC would engineer =
greater scarcity for the benefit of the owners.

Jerome


As the author of what you term the Bakersfield argument, I contend
your argument fails because you (a) assume the station is priced
correctly and the buyer did not over-pay -- which is a common
phenomenon in broadcasting -- and (b) fail to take market size into
account. Los Angeles is so big that a station with a tiny percentage
of the audience is still reaching so many people that it can be
profitable.

In smaller markets that just isn't so. Divide up the pie in
Bakersfield thinly enough, and nobody makes any money. Without
consolidation, only the top-ranked handful of Bakersfield's 30+
signals could be operated profitably today. Only three or four of
Bakersfield stations can be considered full-service operations under
the loosest definition of that term, and they're all in clusters of
three or more signals. A stand-alone, fully-staffed all-news station
with a 2 share in L.A. can be hugely profitable. A station with a 2
share in Bakersfield pretty much needs to be automated, and the rent
had better be cheap.

The Los Angeles metro is listed by Arbitron with a population of
10.407.400, approximately 21 times the size of the Bakersfield metro.
So a station that is really nothing but a "stick" selling for
$250,000,000 in Los Angeles, is roughly analogous to such a
Bakersfield station selling at between $11 and 12 million, which would
be high (my employer sold a full power TV station a few years back for
about that much), but I suppose it's possible. Of course, having paid
out that money, you'd have no guarantee of ever making it back. And
if you did, it would mean you really did invent a better moustrap and
put somebody else out of contention.

Mark Howell

"Mark Howell" wrote in message
As the author of what you term the Bakersfield argument, I contend
your argument fails because you (a) assume the station is priced
correctly and the buyer did not over-pay -- which is a common
phenomenon in broadcasting -- and (b) fail to take market size into
account. Los Angeles is so big that a station with a tiny percentage
of the audience is still reaching so many people that it can be
profitable.

On a) I suppose my phrasing was a bit ambiguous. I didn't mean to imply
that this particular station was correctly priced, only that markets are wise to
price a scarce asset like a radio station according to its reach, not according
to its billing in some passing, suboptimal implementation.

Whether in large communities or small, a free market in scarce licenses
virtually guarantees that stations end up in the hands of the brave or foolhardy
or optimistic entities that are willing to pay the most. At least where there's
no sentimental legacy attachment, as there clearly is in Bakersfield.

Can the govt. really know how many stations a market is able to support, if
entrepreneurs are willing to bet their own funds that that market can support
one more? Isn't the advertising market dynamic with the evolution of
traditional employees into contractors who must flog their services continually?
Most importantly, doesn't the rate of return generated by that advertising
market depend fundamentally on what the high bidders freely dared to pay for
their licenses? And wouldn't a Bakersfield-inspired, govt.-imposed scarcity
work its way right back into the license price...to where the buyer's ROI from
operations got knocked down all over again?

Jerome

On 28 Jul 2003 19:54:08 GMT, "Cooperstown.Net"
wrote:

Can the govt. really know how many stations a market is able to support, if
entrepreneurs are willing to bet their own funds that that market can support
one more? Isn't the advertising market dynamic with the evolution of
traditional employees into contractors who must flog their services continually?
Most importantly, doesn't the rate of return generated by that advertising
market depend fundamentally on what the high bidders freely dared to pay for
their licenses? And wouldn't a Bakersfield-inspired, govt.-imposed scarcity
work its way right back into the license price...to where the buyer's ROI from
operations got knocked down all over again?


What we have now is government-imposed oversupply. When we had free
competition, we had two-thirds of stations losing money, so the
government stepped in to keep them on the air by allowing
consolidation of ownership. Without that intervention, the less
capable operators would have gone bust and we would have far fewer
stations on the air than we do today, (just as when we have too many
grocery stores, those that can't maintain market share go out of
business). Had that happened, we might not be having all these
debates about how local service has gone to hell in a handbasket.
Instead, the government created a mechanism that allowed the bad
operators and marginal signals to cash out at inflated prices to
roll-ups -- and some of these stations were even put on the air with
the specific purpose of so doing.

Mark Howell

David Eduardo wrote:

Example: inferior, basin-floor limited Class B KFSG (now KXOL-FM) in LA with
no billing and a must-change format: $250 million.

Any chance they'd be willing to "sell" their callsign?

"CA was in NJ"
SHOT_ON_SIGHT wrote in
message ...
David Eduardo wrote:

Example: inferior, basin-floor limited Class B KFSG (now KXOL-FM) in LA
with
no billing and a must-change format: $250 million.

Any chance they'd be willing to "sell" their callsign?

Doubt it. They paid money to get consent form the Utah X-band station to get
it. It stands for "El Sol 96.3" which is the station name; in Mexico, "X" is
pronounced almost like an "S."