CAPITAL STEPS: THE KEY TO MORE DEALS

Since 1985, Brevard County, Fla.-based broker Doyle Hadden has been actively involved in the buying and selling of radio stations in markets across the U.S. What’s his take on where the deal-making market is heading? The President of Hadden & Associates shares his thoughts in a Q&A conducted by RBR+TVBR.

RBR+TVBR: The deal-making market seems tepid. Is this the “new normal” until the U.S. government — or the FCC, to be precise — makes rule changes?

DOYLE HADDEN: The market will ebb and flow based on rule changes by the FCC, supply and demand, and in some cases, entrepreneurial resources. I wouldn’t necessarily say that this is the new normal, considering we have seen a healthy mix of seasoned broadcasters, group owners and first-time buyers actively contacting our office for potential deals and divesting assets to invest in other areas.

RBR+TVBR: Where will we see the next round of deals — mainly in smaller markets, or does that not matter?

DH: The next round of deals could be going on now, since we have found more interest directed our way from many Top 10 radio groups regarding interest in consolidation.

RBR+TVBR: Is the biggest issue facing the deal-making market access to capital? Who are the buyers, and can they step in where big-pocketed religious broadcasters can’t?

DH: Access to capital is always key for any industry — and one of our top buyers is using bank funding, so it is available.

Defining a specific buyer to represent the entirety of the market isn’t fair to say either. In-market owners who need expansion are obvious targets for buying stations, and they usually have access to capital to further expand and grow their company if the rules will allow.

RBR+TVBR: Who wants an AM radio station anyway?

DH: Despite the reputation of AM radio around the broadcasting industry, many stations have a valuable place in the market for religious, ethnic and other types of buyers. News/Talk will always be a recognized format on the band.

Obviously, FM translators can help add reach and value to all AM stations, but they aren’t the only prerequisite for all buyers. There are several AM stations that are doing quite well in their markets. AM is not dead in America just yet.

RBR+TVBR: What are your thoughts on FM translators?

DH: FM translators have certainly helped out many Class D stations around the country, considering they will be granted a 24-hour signal. Chairman Pai has made an effort to bring growth to AM, which has been greatly appreciated by many broadcasters.

My advice for anyone looking to add translators to their station is to speak with an engineer first and make sure the FCC window is open to apply and if there is spectrum available on the 45 dbu contour. It makes our job a lot easier when an owner has an on-air translator that is producing an income stream.