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.
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?
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.
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.
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
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
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.
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
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?
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.
Translator Values May Be Peaking
A Game of Chicken in the Translator Market?
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