Tom Taylor is reporting Bonneville, Entercom, Cumulus and even the former CBS Radio President Joel Hollander are thought to be among those interested in CBS' leftovers.
There are all the usual hurdles.
Financing can be challenging at this point in time. Servicing more debt is always a problem. Sellers want multiples higher than nine times cash flows and buyers need lower multiples -- if they are going to be responsible to themselves and/or their shareholders.
CBS Radio President Dan Mason is quoted as saying "I haven't seen an AM radio in a hotel for a year...the first time I didn't see it, I didn't think about it much, but then it was 6-7 times."
Mason is worried about the entire disappearance of the AM band and he's right to worry. CBS has some big name, money pumping all news stations that are still on the AM band.
Bonneville seems to have figured out that they at least have to move their talk, news and sports franchises to FM.
You may not like what I am going to say -- but ...
Radio has more to worry about that the disappearance of AM, the sell-off of extraneous properties and the decline in listening.
If radio wants to deal with reality head on, here's a start:
1. All of the next generation (Gen Y) has already been born. They are in various stages of growing up -- some have graduated from college and are becoming consumers. Meanwhile, radio lost them while the industry was busy consolidating.
2. Buying more AM and FM stations is a risky deal because without the next generation radio can never again be a growth industry. And now it is too late -- at least if you define radio as a terrestrial signal.
3. The next generation does not like radio and listens when it doesn't have a better choice. Making it worse is radio's current trend to cutback local programming creativity even to their available listeners in the baby boom and Gen X age brackets.
4. Radio doesn't have one problem -- it has two. Declining attention and investment in content and broadcasting on an antiquated delivery system (terrestrial towers and transmitters).
5. In spite of years of vowing to get into the Internet, radio operators continue to see it as collateral damage to terrestrial radio -- a fatal mistake.
6. Mobile content is equally important as Internet streaming. Simulcasting terrestrial formats online is a terrestrial strategy. It's not new media. New media and mobile content continues to elude radio broadcasters.
7. The "leaders" who could initiate great change in the radio business are busy selling assets, cutting expenses and nationalizing local radio. Nowhere does any major radio group have a viable plan to program and market to the next generation. This is a sin because terrestrial broadcasters have some great content that is in danger of going under with the AM and FM radio band.
8. Denial is killing the radio business. Its CEOs continue to prop up HD radio which the next generation (remember them -- there's no getting away from them) thinks is a joke. More radio is not what Gen Y wants. Less radio or no radio would suit a lot of them just fine. Radio has worn out its welcome with a generation that it let get away.
All of us are emotionally involved with our love for this great business but increasingly radio people are fed up with working for CEOs who have no understanding of what opportunities and challenges are ahead.
I said -- opportunities and challenges.
So, it doesn't surprise me that radio operators see owning more of a dying thing as an opportunity when the challenge is eluding then.
As much as we love it -- and love the people who make radio what is can be -- it is dead -- finished -- over -- if it doesn't get into the digital future.
Radio is over ten years behind in that mission with no signs of doing the homework necessary to understand how the market has changed. They have no real concept of generational media. Meanwhile they continue to make silly decisions that will lead to more trouble.
You don't want to buy more radio. You want to take the money you would have spent to finance the acquisitions and invest it in new media. But first, understand what new media is.
No decision will pay off that isn't made with a full understanding of how Gen Y lives, learns, enjoys and spends.
That's the right investment.
Not buying more stations that I promise you have no real future.
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