With almost no deal flow in the top markets, it's hard to say what multiples are for cash flowing radio stations in really large markets - - except that they're high.

"We've not had a visible deal of size recently enough to reflect what has happened with the publicly traded, pure-play peer group radio stocks - - Cumulus, Entercom, etc. They're down probably 20% in the last two quarters, Clear Channel also being down significantly, even though they're not a pure-play radio stock. So we haven't had really a deal that lets people weigh values and understand what the multiples would be for a true cash-flowing deal," said broker Elliot Evers of Media Venture Partners. "Almost all of the trades you see have either nominal cash flow and are going to a specialty user, like the Amigo deal (9/2/04 RBR Daily Epaper #172), or Alfred's (Liggins, CEO of Radio One) stick deal in Houston (5/25/04 RBR Daily Epaper #102), or the Styles deal in LA and Ontario (8/18/04 RBR Daily Epaper #161) - - there are no multiples involved there."

Inventory is so scarce in larger markets, that Evers estimated that Entercom recently paid six to seven times revenues, not cash flow, to enter the Indianapolis market with two FMs and one AM (4/23/04 RBR Daily Epaper #80). "There's a multiple for you!" Evers said, but he insisted that the deal made sense for Entercom CEO David Field. "He's got lots of cash and wants to grow and Indianapolis is a good sized market, even though he can't get that deep," Evers explained.

This article appears in its entirety in the November issue of RBR Solutions magazine. To subscribe to the all new January debut issue of Radio and Television Business Report - The Real Business Magazine, see the front page of this issue to receive it - - or call April McLynn here to get your free copy: 703-492-8191.