Saga Communications is profoundly different than any of the other radio owners.
Saga did its IPO long before anyone knew ownership limits would be relaxed. In 1996, when the limits were relaxed, Saga did not change its business plan, and that has made all the difference. They only acquired good stations with solid revenue streams, and didn’t pay unreasonable prices. There are no Harvard MBAs or private equity funding firms steering the rudder of this ship – just a guy who has run radio stations for 30 years. He isn’t relying on the NAB to solve all his problems by leaning on the government.
While they did get hit with the ~$100 million writedown of station licenses due to “Mark to Market”, they are not in trouble with their credit facility. They still have positive owner’s equity, even after the writedown. Their cash flow signfiicantly covers their debt service and they’re using the extra cash to buy up their undervalued stock (in their opinion). They have $40 million in unused borrowing left in their credit facility if some group of really really inexpensive stations were dumped on the market suddenly.
There is no intangible goodwill on their balance sheet from overpaying for radio station licenses (the only balance sheet like that I’ve seen). The owner’s opening statement in the 10k is pragmatic and realistic (what you expect from a Midwesterner, something people in Boston seem incapable of doing). They’re aware of how hard the future could be and have buttoned down the hatches to weather the storm. There’s got to be a morning after – you have to believe. And be prepared.
The company profile can be read [here].