Small markets versus large markets

[Dan Strassberg]

I think there is an effect for which I can't figure out how to correct.
Groups such as Salem, whose revenues are derived primarily from
brokered-time stations, appear to show up with revenues that are lower than
they would be if the owner were responsible for producing the program
content. However, the percentage of revenues that drop to the bottom line
must be substantially higher for these companies than for the outfits with a
more conventional operating model. I think that if Salem and others (I
didn't notice Beasley on the list, but I think it, too, derives a
disproportionate share of revenues from the sale of time to independent
program producers) had more typical revenue/profit models, they would appear
a good deal higher in the revenue-per-station rankings.

--
Dan Strassberg, dan.strassberg@att.net
eFax 707-215-6367

----- Original Message -----
From: "Garrett Wollman" <wollman@csail.mit.edu>
To: <bri@bostonradio.org>
Sent: Saturday, July 22, 2006 10:14 PM
Subject: Small markets versus large markets


> The current issue of /Radio World/ includes a summary from BIA of the
> 2005 revenues for the top 25 media companies.  While they didn't do
> the math, I thought it would be interesting to compare companies by
> revenue per station.  This makes it very obvious how the companies are
> weighted with respect to market size; a few companies average as little
> as $1 million per station -- which, while not pocket change, isn't
> much for a top-25 group.  Here's how they ranked in my
> reinterpretation of BIA's results:
>
>  # Company $M/station
>  1 ABC 17.4 (inc. only stations sold to Citadel)
>  2 Emmis 12.9
>  3 CBS 12.5
>  4 Greater Media 9.8
>  5 Bonneville 9.6
>  6 SBS 9.4
>  7 Jefferson-Pilot 8.7 (now Lincoln Financial Media)
>  8 Cumulus Media Partners 7.3
>  9 Sandusky 6.4
> 10 Cox 6.2
> 11 Radio One 5.6
> 12 Univision 5.2
> 13 Entercom 4.7
> 14 Inner City 3.5
> 15 Beasley 3.1
> 16 Clear Channel 3.0
> 17 Journal 2.2
> 18 Entravision 2.0
> 19 Salem 1.9
> 20 Citadel 1.9
> 21 Saga 1.5
> 22 NextMedia 1.4
> 23 Multicultural 1.4
> 24 Regent 1.2
> 25 Cumulus Broadcasting 1.0
>
> Sandusky is the smallest group on BIA's list, with only ten stations.
> That's probably small enough to discount them as being too small a
> sample.  (If it were included, WEAZ-FM Radio Inc. would easily be
> number one, but that would be apples to oranges, comparing a single
> station -- WBEB (101.1B Philadelphia) -- against an entire group of
> stations.)
>
> According to BIA, Clear Channel (#1) bills $1 billion more than CBS
> (#2) -- but it takes CCU 1,000 more stations to do it.  If I were an
> investor,[1] I'm not sure I'd judge that a success.
>
> -GAWollman
>
> [1] I actually am an investor, generally speaking, but I don't own
> stock in any U.S. broadcasting companies and consider them to be a bad
> investment at present.  This message is not intended as, and should
> not be construed as, investment advice.  Your mileage may vary.  Void
> where prohibited.  Not available in New Jersey.  Prices subject to
> dealer participation.  Objects in mirror may be closer than they
> appear.
>