Basic Valuation Multiples - Radio Station Valuation

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Clifton Gardiner & Company, LLC
Radio Station Valuation
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BASIC COMPLETE VALUATION
For stations with adequate positive cash flow the best and most accurate Fair Market Value (FMV) is determined by using a combination of industry accepted  methods.


Comparable Station Sales
We prepare a schedule of comparable sales in the region for a period of several years.  Unfortunately, for group sales there are seldom individual station sale prices.  We consider market size and station characteristics and present only similar properties.  This is somewhat further limited due to the low number of sales during many years.
Multiple of Current Operating Income (Cash Flow)
The Multiple of Current Cash Flow method is widely used, but is also difficult because there is no FCC requirement for radio stations to report revenues or earnings.  A published industry-wide multiple is used to compare stations.  
Multiple of Gross Revenue
A multiple of gross revenue is rarely used, but historically has ranged from 1.5 to 2.5 times revenue.  There is no regularly published industry-wide multiple
Population Covered by Station Contour (POPS)
The Population Covered by Station, or POPS method is utilized for broadcast industry valuations when the subject stations do not have broadcast cash flow.  It relies on a common multiplier based on the station’s coverage, or potential audience.   The industry standard for the multiplier for various categories of radio stations is the SNL Kagan broadcast industry database.  This data is collected nationwide on a monthly basis and is available to us through a subscription.
It is important to note that we develop a POPS multiple from actual transactions in the subject station's region.  This is derived from actual sales and the station's population covered.
This actual  POPS valuation is then compared with the national valuation.
A station’s coverage population is based on an AM station’s 2.0 mV/m signal strength contour.  For an FM station, the 65 dBu contour is used.  In some instances, the secondary contours are used, particularly in more rural and agricultural areas.
Physical Assset Value (Only where it is a factor)
We seldom choose the Physical Asset Value approach because physical assets rarely comprise a significant portion of a radio station’s fair market value.  it would be unusual for the value of the actual physical assets to exceed $100,000 per station.  However, it is not unusual to adjust the value of a property downward to allow for the condition of the physical assets, if a significant portion of the broadcast equipment is in need of extensive renovation or if replacement is soon to be required.

The preparation cost for the Basic Complete Valuation varies, based on the complexity of the assignment.  However, the normal fee is about $2,000 with additional cost for multiple stations.  Payment is due when the order is submitted.  

Please call us, or use the Contact Form on the Contact page to request a proposal.

Click here for payment for Complete Basic Single-Station Report ($2,000)




        
24645 S Augusta Court
Sun Lakes, Arizona  85248

623.336.7272
www.cliftongardiner.com
Clifton Gardiner & Company, LLC
Clifton Gardiner & Company
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