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4/18/2011 - Realism replaces optimism for many in the deal market.
One year ago as radio pulled itself out of the recession and the economy was on the mend, radio's deal-makers left the NAB show with plenty of optimism that sales would begin.  But that hope largely failed to translate into signed contracts.  A number of brokers say they left this year's Las Vegas convention with a still-optimistic but more grounded view of the world.  " As time goes on you can't help get more realistic," DEFcom president Doug Gerber says.  Broker Michael Bergner agrees.  "I came back with a clear impression that big market radio is in the middle of healing, but middle and small markets have absolutely no financing available to them," he says.  While some bankers were still seen at the NAB Show, the loss of lenders such as Wells Fargo Foothill, CIT Group and CapitalSource from radio has hurt.   "They filled an important role, and we need some other lenders to step up and fill that void." says one broker.  But there could be a crack in the frozen lending market.  One broker discloses his firm was approached by two lenders looking to tackle smaller sized deals.  Ferber says, "It's really up to the banks to decide when the deal market comes back." yet brokers say the radio market mirrors what's going on with the real estate market nationally:  there are more sellers than buyers.  "The buyer pool for radio assets has gotten very shallow," Ferber says. "There are some operators that would like to divest some or part of their companies to pay down debt, but they're having a tough time either convincing someone to buy the stuff they don't want, or they can't get it sold at the right price.  The market is still frozen."  He thinks it could be 2013 before radio's deal market thaws and is back to a more traditional volume of sales. Bergner thinks it could be even longer. "We're in a long-term illiquid phase," he says.  That gives already leery lenders - who like to see an exit before they even make the deal - to avoid radio. Some brokers worry that if radio revenue growth rates slow, it will hurt even more.  But most also agree more than every - the state of the deal market is no longer reflective of radio as  a whole.  Bergner says, "The fact that you're not selling doesn't mean you're doing bad."