|
Radio Info: "Frozen" Station Trading Market? There's "another level", says a dealmaker. Broker Mike Bergner reacts to Monday's TRY newsletter story (the one with the radio receiver inside a block of ice) and says he agrees with it, but wants to explain something - "Many of these cash-flowing radio stations are worth more to the people who already own them: the to a potential buyer. So it's not just that the owner is reluctant to sell while he or she thinks the business environment is improving. it's that the buying pool is very shallow at the kind of multiple a sseller might expect. That's the buy-sell gap TRI mentioned yesterday. And several folks say it's not going narrow any time soon. Another factor is the banks and other lenders. A realistic selling price might be for less than they're owed at face value. but the current owner's able to service the debt - so everybody just keeps rocking along. You can think of it like home real estate, though it's an imprecise analogy. The house may be worth less than the mortgage, but the homeowner may want to continue staying under that foor for a variety of reasons, and as long as theycan keep making the monthly payment, they can do that. "Frozen" may be the condition for some time to come, though there is still buyer interest - at the right price. We've talked about the lack of debt financing, and that's another limiting factor. Bu no doubt, creative folks will keep chipping away at the ice. |
