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The State of TC/Northern Michigan Radio

Covers all of Northern Lower Michigan (from Ludington to Tawas northward), as well as the Straits Area and Soo Region.
Radio Sucks
Posts: 292
Joined: Wed May 14, 2014 4:48 pm

The State of TC/Northern Michigan Radio

Post by Radio Sucks » Tue Nov 12, 2019 10:17 am

Interested in your input on this topic, reading all the posts from TC Talks and others. According to the Coynes (here's an ironic blast from the past - https://www.rbr.com/trans0929/) the revenue in the radio market today is around $14 million, down from $20MM in 2009. That would make it tough for the marginal signals to generate any cash flow.

Overall, radio is not a healthy growth medium. With the tremendous amount of competition for your ad dollars (from Google to Yelp and everything else digital) it's more and more difficult to demand large portions of advertising budgets. But over the air radio is still sending customers to stores, car lots and restaurants and producing a decent ROI for dollars spent. It is currently the only medium that can be delivered and received with both the electric grid and internet grid down. Not sure how valuable that is on a sunny clear day.

There are at my count 5 viable commercial radio stations in the market (counting simulcasts as one) - TCM FM, KHQ, KLT, CCW, and GFM. Add in LXT and MKC with a northern focus and JZQ with a southern focus and you might convince me of 8. There are more stations with ultra competitive signals that are underperforming (and by underperforming, I mean wasted). If you can grab 15-18% of that $14 million (and maybe another 1/2 million because you are really a good seller) that will give you MAYBE $3 million gross. Run effectively, someone could live comfortably on that.



In the biz
Posts: 3
Joined: Sun Oct 20, 2019 8:31 pm

Re: The State of TC/Northern Michigan Radio

Post by In the biz » Tue Nov 12, 2019 12:45 pm

Black Diamond continues to climb in both ratings and billing. GFM is monster and basically the RIF of the market. Big Country does extremely well and UPS with its Southern focus also does very well. Mike Chires and Norm McKee are very good broadcasters who have a ton of experience and deep pockets.



BigFreq
Posts: 6
Joined: Thu Apr 04, 2019 6:21 am

Re: The State of TC/Northern Michigan Radio

Post by BigFreq » Tue Nov 12, 2019 4:07 pm

Radio is still quite viable and there's money to be made. It really depends on debt load versus operating expense. Those heavily leveraged or LMA'ing signals might have a tough time eaking out comfortable margins. It also depends on who you're servicing as clients. It's now essentially all about direct selling. The pie that used to be national/regional has significantly dried up; especially for markets under the Top 50. And what little national/regional dollars still being spent in smaller markets -- like TC -- are now only going 3-5 stations deep (and saying 5 is being gracious). As we all know, consolidation has allowed for leveraging too many stations in a cluster in an effort to keep a larger percentage of that shrinking pie. In essence, it has devalued radio as a product. What I find amusing is there are still enough companies in TC willing to pay Nielsen in excess of six figures annually for a piece of the pie that doesn't yield much more than that for some clusters. And let's not discuss the geographical joke that is the Nielsen TC-Petoskey-Cadillac metro. Tell me what Cheboygan and Manistee have in common, aside from being technically categorized as Northern Michigan? Yet -- at three hours apart -- they are still in the same metro, according to Nielsen. Take that same drive duration downstate, and you will likely be traveling through four different Nielsen metros (I-96 corridor: Detroit, Lansing, Grand Rapids, Muskegon. I-94 corridor: Detroit, Ann Arbor, Lansing, K'zoo. Three hours on I-75 will deliver Toledo, Ann Arbor, Detroit, Flint, Saginaw). Of course, Nielsen can't take all the blame for the Frankenstein metro, as it were broadcasters who insisted additional counties to the north and south be added, as Market #159 was to be all the rage. Of course, some of those who participated in agreeing to that mess are either out of ownership or no longer wish to pay for something that won't make a difference in topline revenue.



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MWmetalhead
Site Admin
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Re: The State of TC/Northern Michigan Radio

Post by MWmetalhead » Tue Nov 12, 2019 6:13 pm

There are at my count 5 viable commercial radio stations in the market (counting simulcasts as one) - TCM FM, KHQ, KLT, CCW, and GFM. Add in LXT and MKC with a northern focus and JZQ with a southern focus and you might convince me of 8. There are more stations with ultra competitive signals that are underperforming (and by underperforming, I mean wasted). If you can grab 15-18% of that $14 million (and maybe another 1/2 million because you are really a good seller) that will give you MAYBE $3 million gross. Run effectively, someone could live comfortably on that.
Without knowing debt leverage ratios, the above analysis is incomplete.

In fact, $3 million in annual revenue - if we're talking a single station - would be enough to place you among the top five billing stations in Grand Rapids.

If you are a cluster owner with shared sales, managerial, programming and engineering staff across multiple stations (thus reducing overhead cost on a per station basis), if your top two stations each bill north of a million, you should be able to generate enough cash flow to comfortably cover operating expenses and basic capital investment needs and still have some cash left over.

Debt load underwritten to unrealistic EBITDA growth expectations is what introduces potential problems. Major equipment failures can also introduce problems.

By the way, the last time I saw market revenue estimates, no single station in Northern MI was billing $2 million annually, let alone $3 million. About $1.5 million or $1.6 million was the top estimate.


Alexis Wiley and Mike Duggan - together following in Hillary's footsteps!

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TC Talks
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Re: The State of TC/Northern Michigan Radio

Post by TC Talks » Tue Nov 12, 2019 9:37 pm

$1.5m sounds about right 5 years ago.


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