To sell, or not to sell? Is that your question? Part 2

If you've thought of selling your radio or TV station(s), how do you know if now is the right time to sell? And how do you figure out how much it's worth? After all, no one wants to leave money on the table, nor do they want to put on a price tag so high that the sale never happens. If you are in the market to sell, or just pondering the possibilities, we've gathered some expert advice to help you figure out whether and when to pull the trigger.

At Americom Radio Brokers, Tom Gammon told us there are about five factors to consider when deciding if the time is right to sell. "Number one: Interest rates are at a 35 year low, therefore people can pay more because their debt service is less. Number two: There is a debate on whether the radio industry is a 'mature' industry. If that debate ends up deciding on the mature side, the multiples will come down substantially in the near term. So, there is a multiple compression risk. Therefore, it may be a peak pricing time - - if it's a mature industry. Number three: With re-regulalation, not deregulation, there's a perception that the heady days of growth in cash flow may be ending. Number four: Satellite radio is now becoming a freebie with the purchase of 2004 and of, course, 2005 cars to hook people because the car manufacturers have an economic interest with the satellite radio providers. So, there is a big push to convert listeners to satellite radio through their new car purchases. 16 million new cars are being sold this year. I say that because cable TV is 70% of the viewership of television today, but it was viewed as kind of a silly thing when it went on as CATV for the rural viewers back in the '50s. So there's a risk that listenership continues to decline. Finally, number five: In the last seven or eight years APR - - average persons listening to radio - - has declined approximately 20% and a larger portion of that is in the young listeners 18-24 than it is the older ones. You've got declining listenership, which is directly related to what you can charge for ads. At the same time, there's additional move-ins everywhere - - nearly every market has gotten more FMs in just the last four or five years, maybe two or three of them. So there's more fragmentation," Gammon said.

This article, in its entirety, appears in the August issue of RBR Solutions magazine.