I have always had a pipe dream of buying a radio station or two, primarily AM — because I want to prove you can get listeners when you program and promote a station correctly — or maybe an AM-FM combo in a major market. I’d probably run top-40 or progressive rock on the AM and something to complement it on the FM, such as Big Band.
But as I write this, something dramatic is happening in radio: Audacy — owner of six stations in Los Angeles, a handful more in the Inland Empire, and a total of 235 nationwide — 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 roughly at about $37 million.
I think it’s time to buy the whole company. Anyone want to invest?
Here’s 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’t have to get much for them … 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.
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 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’m set.
Why ten? That’s about as many as any one company should be allowed to own. More than that and you have what you have today — failing companies creating a declining industry.
Of course in purchasing the company you’d have to deal with staggering debt, for which there may be no way out short of bankruptcy. Something that some observers argue 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 — and this is a big but — it seems doable, 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.
Any financial wizards reading this want to tell me why the plan doesn’t work? Seems a no-brainer … I haven’t seen a bargain like this since Cumulus stock was selling for under $1 a few years ago.
Another take on KABC
I received a few letters regarding my recent column on KFI’s (640 AM) programming changes, one particularly good one from reader Alan Wolfe:
“I disagree that KABC (790 AM) programming is stale.
Armstrong 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.
Dan Bongino: Two thumps up for this excellent show. Great show.
John Phillips: One of the best interviewers on either the radio or TV. Great show.
Ben Shapiro: Also a good show if Ben did not talk so fast. Ben, slow down.
Leo 2.0: During the 60 minutes Leo covers more information than some of the other stations cover in four hours. Great show“Frank Motek: One of the best financial shows on the air and he is not selling anything.
Susan Shelley with John Coupal: In one hour you know so much about what the city, county and the state are doing to rip you off.”
That is an excellent analysis, which made me realize I was unclear. I didn’t mean that KABC was stale; what I meant was that KFI changed this month because it didn’t want to become what KABC HAD become back in 1984. KABC being old and stale is what KFI — with a young, popular Rush Limbaugh and a few others such as Tom Leykis — used to surpass them in the ratings.
Remembering a lost voice of classic Southern California radio
What happened to KFI 640 AM’s schedule? Here’s what’s changed.
Southern California’s iconic KHJ is still on the air — in American Samoa
A 30-hour New Year’s radio marathon to showcase community leaders and raise money
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 … 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.
Which is too bad. Shapiro is considered by some a genius and even fun, and Phillips is 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’s 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’ program.
KABC should be a competitor. They invented the format! But they just won’t 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.
KABC is probably a station that purists wouldn’t want me to own: I’d take it to top-40.