BIA Sees Growth in Radio Valuations with New Media

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According to BIA's quarterly "Investing In Radio" report, stations with more than just over-the-air offerings provide the foundations for appraisals that raises their value above competitors not involved in these other activities. The radio industry's sole opportunity for valuation growth, says the report , relies on the ability to transform itself into a blended operation of broadcasting, online and other activities.

Through March, 2009, 164 stations were sold for a total of $46 million. With 769 stations sold for an estimated $700 million last year, it was the sixth time since 2001 that one thousand stations or less were sold, but the first in that period for total transaction values to sink below $1 billion. In 2002 the identical number of stations went for $5.4 billion.

Also of note, 2008 was the first year since the late 1980s where the number of stations sold in metro markets (383) was virtually equal to that of unrated markets (386). BIA recently reported 2008 radio revenues of $16.7 billion.

"Transforming the business model may not come easy for owners, particularly because there is no magic formula, but they will increase the value of their operations simply through off-air diversification, which can take a number of forms," said VP/BIA Advisory Services Mark R. Fratrik, Ph.D.

BIA Capital Strategies Managing Director Mike Andres added, "Radio's upside potential lies in its ability to accelerate the pace they take local advertising dollars away from newspapers, once advertisers that have been dormant begin returning. Many local newspapers have been ceasing operations, or moving to online versions, creating opportunity for other local media to fill this need."

BIA has created a new conference, "Winning Media Strategies," to discuss topical issues for broadcasters and provide them with a tangible means to improve their operations. In a three-day program, May 20-22, in Washington, DC, speakers will discuss new technologies, shifting consumer demographics, media usage trends, new competition and how different business models are driving the new revenue to traditional media.