Translator Prices Are "All Over the Map"


You may know Scott Fybush from his articles in Radio World, his Northeast Radio Watch, his tower calendar and his general passion for radio and its history. But he’s also deeply involved in the translator market, which also makes him a news participant right now. We asked him what he is seeing as part of RW coverage of this hot market sector.

RW: What is translatorsale.com?
Fybush: It’s my new venture into translator brokerage and consulting, trying to put stations that need translators together with owners trying to sell them.

RW: How did you get involved in the translator aspects?
Fybush: For more than a decade now, I’ve been quietly consulting several station groups on signal improvement, providing advice about what stations might be for sale, what existing signals could get upgrades, and providing a general overview of the marketplace. I used some of that experience to file a fairly lengthy set of comments in the AM revitalization proceeding, which I’ve been following very closely ever since.

When the 250-mile rule and the January window were announced, I heard almost immediately from several station owners who wanted guidance from the buyer’s end of the process. At that point, I started reaching out to owners I thought might be interested in selling, and it became clear that there was a service I could provide bringing those parties together and helping with both the sales transaction and the engineering process.

RW: What kind of costs are you seeing for translators?
Fybush: Anyone who’s been following the market so far knows that prices have been all over the map. Before the 250-mile rule was announced, there was at least some correlation between sale price and pop count. That’s largely gone out the window now. Some sellers seem to have been eager for a quick sale, letting their licenses go for as little as $25,000.

The high end of the range seems to have settled just over $100,000.

There’s a sweet spot somewhere in between, depending largely on supply and demand. New England seems to have lots of demand and relatively thin supply, which is keeping prices up above $50,000. Out west, prices are much lower. A lot also depends on what open channels are available.

Everyone would love to have a translator in a top-20 market, but earlier translator and LPFM windows have already filled up a lot of the gaps that were there just a few years ago.

RW: Given the timing of the upcoming windows, what’s a smart strategy right now for an FM station that has an attractive translator?
Fybush: It may sound self-serving, but get a good broker. Unless you know all the station owners within 250 miles, you’re going to drive yourself crazy trying to figure out who your prospective buyers are going to be.

There are a lot of chess pieces to put together. Be realistic about how much you’re going to get for your translator. The breadth of the 250-mile window has made translator licenses something of an interchangeable commodity. If a buyer can get someone else’s translator for, say, $30,000, there’s absolutely no reason they’d want to pay you $100,000 for yours. And be prepared to move quickly. With windows opening and closing, there’s not a lot of time to get bogged down in negotiations.

RW: What’s a smart strategy for an AM that wants one?
Fybush: First and foremost, be as certain as you can be about the availability of a frequency at your desired location. That should guide your strategy.

If there’s only one available channel and other AM stations that might be competing for that channel, be prepared to spend what it takes to get a translator in place as quickly as possible to take advantage of the FCC’s first-come, first-served policy as the window opens.

If you’re a Class B (or even A) station, now is the time to begin strategizing for that window in July. I know several owners of Class B AMs who are lining up translator purchases right now to be well-positioned when the window opens.

Watch for new frequency opportunities that may open up as existing in-market translators are sold and move elsewhere. I have seen some cases where unbuilt CPs are being moved from big markets to smaller ones and leaving holes behind that can be exploited later on.

And if you’re lucky enough to have plenty of available frequencies in your market, assess the risks and rewards of waiting until 2017 when the FCC opens a window for new translator applications. Those CPs won’t cost owners anything (except application costs), but you run a real risk of having your channel claimed by someone else before that window opens. For anyone who gets a translator, keep up with the ongoing developments on AM revitalization.

There are additional proposals before the commission that could allow new translators to improve their signals later on in the process. Be active in lobbying the FCC for rule changes that could benefit you.

RW: Do you think AM owners have reasonable expectations about what FM translators can do to help their business?
Fybush: Most of the AM owners I’m working with are very realistic about what a translator will do. For AM stations that are still viable on their own in 2016, a translator can be an inexpensive insurance policy to help keep those stations viable by bringing their programming to the band where most listeners now live. For some AMs that have been struggling, a translator can effectively create a “new station” in the market in a way that might be impossible to do these days on the AM band alone.

But it’s not a perfect solution, and I try to make sure my clients are aware of the risks. Translators are secondary licenses that can get displaced by new full-power signals or even by interference complaints. (A good consultant can see those coming and steer clients away from problematic frequencies.) And except in the smallest markets, translator signals rarely provide the same coverage as their AM partners.

Be sure your consultant is giving you realistic coverage predictions so you’re not disappointed when you hit the airwaves.

RW: What else might we want to know about the translator situation right now?
Fybush: One of the big challenges I’m encountering is financing. Most sellers, understandably, want cash at closing so they can hand off their licenses or CP as cleanly as possible to the buyer, with no risk of having to later take back a license that’s been moved outside their market and inextricably linked to someone else’s AM license. Some of the small AM operators who could benefit most from a translator don’t have that kind of immediate cash at hand. That’s an unfortunate result that’s almost certainly not what the FCC had in mind when it launched AM revitalization.

Related:
Translator Values May Be Peaking

A Game of Chicken in the Translator Market?


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