Less than $1 billion worth of radio stations traded hands last year. First quarter this year looked even worse, with only 164 stations being sold for a total of just $46 million, according to BIAfn, the Chantilly, Va., data collection service that monitors media deals. In all, some 769 stations were sold in 2008 for about $700 million, the sixth time since 2001 that 1,000 or fewer stations were sold but the first time that the total valuation of deals had fallen below $1 billion.
In 2002, an identical number of stations were sold but for $5.4 billion. Last year was also the first year since the late 1980s when the number of stations sold in metro markets (383) was nearly equal to those stations sold in unrated markets (386).
“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 Mark Fratrik, vp for BIA Advisory Services.
This could be the time for radio to take advantage of the problems the problems in the newspaper business.
“Radio’s upside potential lies in its ability to accelerate the pace at which they take local advertising dollars away from newspapers, once advertisers that have been dormant begin returning,” said Mike Andres, managing director of BIA Capital Strategies. “Many local newspapers have been ceasing operations, or moving to online versions, creating opportunity for other local media to fill this need.”