What did it cost?
First off, this is not a "let's bash the FCC" type article. The FCC has done a great deal of good, especially where I live, shutting down illegal, pirate stations that walk all over legitimate channels and basically pollute the airwaves. I am in favor of the FCC, otherwise we would have complete broadcast chaos.
That being said, if the one thing the FCC has done to hurt small market broadcasters, it is to publish the price one has paid for one's broadcast property. Yeah, it looks good in R and R and all the other transactional mags, but it is a complete and total detriment to someone who bought a license, shack, a mic and a board, attached to two acres of swamp.
Case in point, two actually….. had a guy buy a license, in rural Florida. Yup, just the license, paid a whopping five grand. He then had to buy land, a tower, transmitter and all the fixings just to utilize that broadcast license. Good broadcaster that he is, he sunk $40k or more into that property, moved his family from the Midwest, and made money the first month. Unforseen circumstances caused him to sell within 18 months. His price was over $150,000.00. He got that price.
"But why?" you may say, "All he paid was five thousand dollars."
NO, he didn't……he broke even. What do towers, transmitters, real estate, studio equipment and studio buildings cost? What was the price predicated upon? Well, start with the five thousand, then the improvements to make the building useable (Sears doesn't sell ready made radio studio buildings, you know), then move on to his efforts to get the station on the air (lawyers don't work for free), then his going out and pounding the pavement to bring in the money to live on and pay for all he did. The buyer ignored the "original price," and snapped that property right up. SMART buyer.
And again, got a great little station in mind, paid less than a hundred thousand for a dark station, a broken down building, that one practically had to drive a tank to get to, and a transmitter. He actually got a board and a mic thrown in. Tower had to be replaced. This station, too, was off the air and had been for some time, it had no local presence, it didn't exist in the public's mind.
Whooppee.
HE sunk well over $190K into it, bringing it on the air, gutting the place, improving the swamp so it was navigatible, getting ratings, obtaining revenue, making it a real radio station that is the pride and joy of its listenership. His price? A little less than one and a half times what he ORIGINALLY paid. But, it really wasn't a real radio station when he bought it. If a radio station doesn't broadcast, it is just a pile of stuff.
So, when you're out looking at inexpensive, well maintained radio stations, don't look at what the seller paid originally for it, chances are, he paid for a license attached to a shack and a swamp, YOU get a showpiece that's waiting for YOU to bring to next level.
The old real estate axiom, "buy the worst house in the best neighbor-hood," can also apply to radio stations. It can pertain to a couple of generations of buyers and sellers, maybe even YOU.
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