“Zombie companies” is what Saga Communications CEO Ed Christian calls the broadcast companies which have been taken over by their equity backers and are now being run on the cheap until they can be sold. Christian told analysts that he expects the radio transaction marketplace to pick up in 2012 after several years of inactivity.
Saga is well prepared to go shopping. The company has been paying down debt and had $7 million in cash sitting in its coffers at the end of 2011. But while he expects to see more properties come to market this year, Christian warned that some of the would-be sellers have different ideas than he does about what is really cash flow, so he isn’t going to buy just because more inventory becomes available.[audio:Ed-Christian-031312.mp3|titles=Ed Christian]
RBR-TVBR observation: At some point the equity backers of companies who bought at the price peak before the recession are going to have to take their losses and go home. Pricing has gotten better – and anyone hoping for a return to pre-recession levels is not being realistic about the near-term – so it will be good to see some of these properties go back into the hands of broadcasters. The sooner the better.