It takes a rare, courageous individual to manage the multiple challenges of financing, buying and owning radio today.
Being a successful entrepreneur has never been easy since it typically requires mortgaging everything you own, placing yourself in a position where failure is simply not an option.
In today's radio deal market where millions of investment dollars sit on the sidelines with a business sense that in the economy of the next few years AM-FM clusters that are for sale are "prudently" worth perhaps four to six times cash flow and yet the companies with the desirable stations "everyone" is attempting to buy are demanding as much as double that.
Complicating the problem: recent deal makers such as Digity, Alpha and Townsquare, among others, are choosing to add very small markets as they pursue medium market opportunities.
The margin for error in small marker radio is much narrower than it is in higher revenue situations.
There is next to no national business. Power, legal fees, equipment, the best people and other fixed costs don't cost much less in small markets than they do in medium and large cities where it's possible to bring 40-50% to the bottom line and still compete aggressively.
The percentages are very different in small markets as consolidators.
Yet - as the thousands of very successful small town mom and pop owner-operators all across North America know - the payoff to being a big fish in a small pond can be fabulous when you do it absolutely right.
Dean Goodman, Larry Wilson, Steven Price and the others who are jumping into the radio fray today appear to be deeply aware of these facts. They all possess the strength of will, experience and smarts to understand what is at stake.
Let's hope, for the sake of the people who work for the newly-acquired radio stations and the communities depending on them, they pull it off.
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