Another “black radio” station bites the dust

Posted on November 14, 2012 by Fred Stiening

Ignoring 85% of your potential radio audience is not a good way to make money. KCOH-AM in Houston Texas is joining a growing list of so called “black radio” stations that have gone out of business. The station has been sold to the La Promesa foundation, which broadcasts Catholic religious broadcasts, mostly in Spanish.

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5 Responses to Another “black radio” station bites the dust

  1. Art Stone says:
    November 14, 2012 at 12:51 pm

    $2.1 million is the sales price – $100k in cash and the rest on a note

    [A caller today is talking about a neighbor “on the download” which means he is bisexual – and the word sh*t went out over the air]

  2. Parrott says:
    November 14, 2012 at 8:02 pm

    LOL God that’s funny !

  4. Nidster says:
    November 15, 2012 at 8:35 pm

    The story and especially the photos tell us so much about what’s going down with the sale and why. Firstly, the story is about a radio station that cared about the community and the station appeared to have been well received by Negro families in the community. Hispanic populations are 85%? Perhaps La Promesa’s (The Promise) audience also still consists of mostly intact families. Houston must be a huge market for La Promesa.

    OK, now I see the light, they have a chain of restuarants and churches to advertise. OK, the purchase price is paid with a down payment of 4.76% and seller financed by way of a purchase money contract/note. $2.1M seems low. Does the station have to lower the wattage of its transmission signal after 5/6 pm? Maybe the station is built over a sinkhole or toxic waste dump.

    • Art Stone says:
      November 15, 2012 at 11:18 pm

      It’s a mediocre signal – 5 kW daytime, 1 kW night

      http://www.radio-locator.com/cgi-bin/pat?call=KCOH&service=AM&status=L&hours=D

      Radio deals depend on things like whether it includes the tower and/or real estate. There are two main ways of putting a value on a radio station – comparable sales or multiples of free cash flow. A “rule of thumb” on stations is to multiply the total potential audience by a number (currently probably about $3) . Houston has a 12+ population of about 5 million, but this station doesn’t reach Galveston in its local area. Based on that rule of thumb, the station is probably worth $10 million. The problem is that 90% of people in Houston do not have the station on their car radio buttons and have never listened to it. Someone else buying the station is not buying an established audience. They’re buying either a format with few listeners, or buying a station which will be targeted by protestors.

      WOR-AM is a recently major market AM sale – it was sold for $30 million in a market with 15 million potential listeners.

      WAMO-AM/FM in Pittsburgh had the same fate. Overnight an iconic “Black Radio” station vanished, only to be bought up and converted to EWTN/Catholic syndicated programming of Mother Angelica saying the Rosary from a decade ago, before she had her stroke. The same thing is happening to WBLS in New York City.

      The reason is that Arbitron’s PPM technology – which measures what radio people are listening to by actually recording what a person hears – uncovered highly inflated ratings where people used the paper diaries to “vote”, not to record what they actually listen to. The main casualties of PPM are Smooth Jazz, Classical, Black Radio and Spanish Language stations. With accurate numbers, advertisers have no interest in buying ads.

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