Radio deals: An appreciation in Fargo


ChartWe knew that Midwest Communications was buying a six-station radio cluster in the Fargo ND-Moorhead MN market. Now we know how much cash is changing hands.

The seller, James Ingstad’s Radio Fargo-Moodhead, will receive $25M for the stations, which include KFGO-AM, KVOX-AM, WDAY-FM and KRWK-FM, all licensed to Fargo; along with KMJO-FM Hope ND and KBVB-FM Barnesville MN.

We took a look back at how Ingstad put this cluster together, and we can report that this is one cluster that has definitely gone up in value over the past few years.

The key acquisition by Ingtad came via a 10/16/06 deal with Clear Channel for two AMs and five FMs in the general area. The price tag on that deal was $14M.

Here is what happened to get the cluster to its present form.

Out of the seven acquired, five are still in the cluster. KVOX-AM was the only current member that was not, although Ingstad did acquire a KVOX in the CC deal. However, the one Ingstad bought was licensed to Moorhead MN and resident on 1280 kHz.

The Moorhead KVOX was sold to Voice of Reason Radio for $200K, and now carries call letters KVXR.

The other station acquired from CC and lo longer in the cluster is KFAB-FM Kindred ND – it was sold to Northwestern College. Well, not sold exactly – Ingstad received a credit for tower space rental of $500K in exchange for the station.

The current KVOX is licensed to Fargo on 740 kHz. It was bought from Jeffery G. Dress pursuant to a 6/1/07 contract for $850K. At the time, it was but a CP with call letters KKAG.

So in all, Instad spent $14.85M and received $700K in value, putting his net investment at $14.15M.

And the profit dollar-for-dollar between the earlier dealings and the current deal stands at a nifty $10.85M.

RBR-TVBR observation: It will be a great day when this sort of news  — radio properties increasing in value over a five or six year term — becomes the norm rather than an oddity worth pointing out.