The Radio Show, produced by the RAB and NAB, kicks off the day after Labor Day this year and is being held in Austin. As everyone gears up to make the trip to Texas, Radio Ink will spend the next 10 days interviewing industry executives about what they’re expecting to see when they arrive in The Lone Star State. We start it off with broker Dick Kozacko from Kozacko Media Services in Raleigh, and his thoughts on the possibility of wheeling and dealing.
Radio Ink: Are you expecting a lot of executives to make the trip to Austin ready to talk deals at the show?
Dick Kozacko: There will be some executives out there for this purpose. But I am finding that a number of broadcast company people whom I would like to meet with will not be attending. With the location being Austin, I think you will see a stronger “Western” part of the country broadcasters participating.
Radio Ink: How has the deal chatter been in your world so far, and what are you expecting we’ll see in the next six months to a year?
Dick Kozacko: We find the deal “chatter” to still be on the limited side. As we have said previously, the limited available sources of financing still remains a handicap to a more active station market. Radio broadcasting has not been high in the news for the investment field compared to other types of media. If more banks were approached by groups or individual buyers showing an interest in acquiring stations, then this might motivate more banks and financial sources to consider expanding into this field of loans. But it doesn’t seem to be happening right now. I have seen no indication that this will change in the next six months.
Radio Ink: How is the inventory out there?
Dick Kozacko: I would say the inventory is soft. There have been signs that the selling price to the cash flow multiple is trending upwards after being flat for the past few years, and this can be positive. Many owners have paid much higher multiples for their stations, and, if there’s not a need to sell now, seem to be waiting for these pricing ratios to increase. We seem to live in a world where most investments have increased in value over the years. Yet many radio stations have sold at prices that are dramatically lower than the number at which they were purchased. But, as I said, things seem to be going in the right direction.
Radio Ink: Are companies waiting on the sidelines building up their money, just waiting for something to break?
Dick Kozacko: Some broadcasters are doing exactly that. Everyone watches iHeartRadio and with $20 billion in debt, many believe that they will have to sell many stations to try to alleviate this problem somewhat. Plus, they are in many small and medium markets in which they should not be an owner. The return they get from these stations just doesn’t make sense. Other broadcasters will be selling stations as well, and with the difficulty in finding strong bank interest in broadcast, having your own funds available can certainly make the purchase move along easier.
Radio Ink: Name three companies you expect to see the most activity from in the next year.
Dick Kozacko: One could be iHeartRadio, as I just mentioned. I think Alpha Media acquired a lot in the past few years, and some of their properties are in smaller markets that don’t work as well as the bigger-market stations for a company of that size. With the spinoffs from the CBS/Entercom merger, there could be a couple of chain reactions occurring that could affect a number of different companies. Of course, with Mr. Dickey sitting there with his basket of money, there could be a number of broadcast companies becoming very active if he goes in this direction.
Radio Ink: What have you been most surprised about in the last year in your business?
Dick Kozacko: I would say that the attractive features of investing in radio station ownership have been overlooked. Many of these attributes are still out there, and the fundamentals that made broadcasting a good investment 20 years ago are still true and available to new owners.
Radio Ink: Are you going to Austin for the show? If not, why not? If yes, where can people find you?
Dick Kozacko: Both George Kimble and myself will be in Austin and found at the JW Marriott – Austin. Just call me on my cell, 607-738-1219, and we will find time to meet.
Dick Kozacko can be reached by e-mail at [email protected] or by telephone at (607) 733-7138
NOTE: The Radio Ink Radio Wayne awards will be presented at The Advertiser Breakfast on Thursday, September 7 at 7:30AM.
