KKHI-FM sale not a sign of collapsing station values


Readers have been somewhat shocked at the recently-announced sale of KKHI-FM Denver for only $2,350,000.  Bustos (which is in default on loans originated by Wells Fargo) sold it to religious broadcaster Way FM. Some noted that the reported previous sale price was $17,500,000 and wondered if this sale indicative of the continuing collapse in station values.  The answer is no, KKHI is a station with significant and very unique signal problems that limits its value.  We don’t know if Bustos, when it paid $17,500,000 for the station in 2005, understood these problems or there were other factors.
Some observations and about the newly announced sale:

Below is a signal map supplied by David Schutz, President/Hoffman Schutz Media Capital, that compares KKHI’s 70-dbu signal contour, with that of a typical full Class C station operating from the FM Master Antenna on Signal Mountain (KIMN, which Wilks purchased from CBS in early 2009).


KKHI has an interesting history.  The station was originally assigned to neighboring Colorado Springs as a Full Class C, transmitting with 100 kW from atop Cheyenne Mountain (within which NORAD’s bunker is located).  In 2003-05, Chris Devine, in a two stage process moved the station northward into the larger Denver market.  However, this required a downgrade to C-3 status, and meant that the station’s antenna would have to remain 20 miles south of Lookout Mountain.

The station was sold to Bustos in 2005 for $17,500,000.  However, some may take this value with a grain of salt in that Alta was the equity backer of Chris Devine, and was also a major stakeholder in Bustos (see FCC ownership records).

In addition, KKHI (101.9) confronts an unusual source of blanketing interference from a second adjacent station.  KTNI (101.5) has 20 kW (Yep, 20,000 watts, one of the most powerful boosters in the country) operating in Englewood, a suburb which is also south of downtown Denver.  The KTNI booster’s signal is partially directed, northward, to cover the City of Denver.

According to Schutz’s figures we can conclude that KKHI’s 70-dbu signal contour reaches only 35% of the Arbitron Metro population, whereas a typical Lookout Mountain Class C reaches 96%.  At a scorching 80 dbu level conducive to HD-Radio, KKHI reaches 26% of the Metro population while a Lookout Mountain station reaches 88%.  As a result, the $2,350,000 selling price of KKHI has very limited comparability to a full Class C station operating from the market’s central antenna farm.