When Telecom 1996 opened up the radio station trading market and led to the creation of radio juggernaut groups with stations in the hundreds, station prices supply-and-demanded their way up the ladder. Now we’re seeing the ugly underbelly, and the deal for KNOU-FM Empire LA is a case in point.
The station was bought by Bruce Buzil’s JP Broadcasting in a deal we saw in the FCC database, but which was filed far enough in the past that there were no documents attached. But it provides a starting point in our journey.
Steve Hegwood’s ill-fated On Top Communications Group bought the station from JP pursuant to terms of a 7/24/02 contract. The price: $8.5M.
Fast forward to 7/3/08. By now, On Top Communications of Louisiana is a debtor-in-possession under control of Chief Restructuring Officer Bryan C. Rice. Rice transferred to station to Power Broadcasting LLC, basically a trust designed to protect the station’s existence until such time as it could be resold. The deal called for a $250K escrow deposit and cited the value of $6M, deemed a credit bid.
Just to add injury to the insult of a lower value, in 2008 the contract stipulated that the station’s public file was being transferred to Power “to the extent re-created after destruction by Hurricanes Katrina and Rita.”
Now, in a deal just filed with the FCC, the station is going for $350K, sold by the Power Broadcasting Trustee Ricardo Moreno to M.A.C. Broadcasting, which will operate it in tandem with WTIX-FM Galliano LA. WTIX beams up from the south to serve New Orleans; KNOU beams up from the same area but doesn’t quite make it to the city.
Today it seems amazing what people were willing to pay for a rimshot FM with only a peripheral presence in a competitive market.
But we are now seeing prices start to connect with reality, and that’s no doubt a good thing for radio operators going forward.