Kagan Study Says Station Sales Pacing "Within Historical Ranges"
July 21, 2006 at 6:09 AM (PT)
A report from KAGAN RESEARCH says that the current pace of radio station sales is "within historical ranges," albeit well below the boom period of 1995-2000. Between 6 and 7% of radio stations were sold in 2000-2005, which is just slightly below the pace of the 1990-1994 consolidation period.
"The top 10 operators went from owning 4% of radio stations in 1996 to 22% by 2005," KAGAN analyst MICHAEL BUCKLEY says. "With so many small operators still running stations, further consolidation is possible and, according to some executives, highly desirable. But even if that were to occur, the radio industry would not be nearly as concentrated as other media sectors such as movie theaters, where one company alone— REGAL CINEMAS— owns 18% of all U.S. screens.
"Overall, 774 radio stations switched hands in 2005 at a cash flow multiple slightly lower than the 13.7x multiple of the prior year. WALL STREET, however, remains concerned about the industry's slow top line revenue growth and has pushed public trading multiples down to just 9.2x."
The report claims that "without radio regulatory relief, consolidation will occur at a far slower rate than during the go-go period several years ago."