BIA: Small Group ‘Fill-In’ Holdings in ’03; Trend to Continue in ’04

A review of the top ten radio station acquisitions in 2003 shows smaller ownership groups dominated the market throughout the year, according to a report recently completed by BIA Financial Network, Inc. BIAfn reports that only three of the top ten radio groups, as ranked by 2003 revenue, were among those that acquired the most stations. Clear Channel, the largest group owner, acquired 36 stations, followed by sixth ranked Citadel with 22 stations and ninth ranked Cumulus with 26 stations.
Other groups within the top ten included: Quantum Communications; Max Media; Cherry Creek Radio; Multicultural Radio Broadcasting; Nassau Broadcasting; Pacific Radio Group; and, First Broadcasting.
Purchases made during 2003 suggest that some radio groups have rekindled interest in picking up additional stations in markets in which they presently operate. Nearly one-third of the stations sold in rated markets were to in-market operators.
“Given the sluggish advertising marketplace in 2003, we see the number of in-market sales a result of group owners concentrating on improving operating efficiencies,” said Mark Fratrik, Vice President BIAfn. “Group owners can increase cash flow margins in their existing markets by creating larger clusters of stations.”
BIA believes this trend will hold for 2004.
Also supporting the “filling in” theory was the absence of any “blockbuster” deals. Multicultural Radio’s $150 million purchase of 15 Radio Unica stations was the largest dollar transaction in 2003. Comparatively, in 2002, there were three deals with larger dollar amounts, the most notable being Univision’s $ 3.5 billion acquisition of Hispanic Broadcasting.
The “BIAfn State of the Radio Industry” is currently available at www.bia.com/publications.