How not to buy a radio station

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Paul Izard Communications then acquired Silent 105.9 WGWE Little Valley NY in September 2021 for $25,000. The Seneca Nation had retired the former Classic Hits station in late March 2021, citing “financial difficulties, including long-term losses in its operation of the station that have been exacerbated by the ongoing COVID-19 crisis.”

The 7kW/191m Class B1 signal covered much of New York’s southwest corner, including the Jamestown and Olean markets, the latter having a 1.7 share in the Nielsen Audio ratings of fall 2020. Izard, who operated the Dance webcaster “Energy Radio Buffalo,” would assume operations of WGWE on January 3 and restore the station to operational status on February 28 with the webcaster’s Dance format targeting the city over 50 miles away. north where WGWE’s signal did not reach.

On April 14, the station surrendered its license.

That would normally be the end of the story, with Izard going from closing its acquisition to handing over license in 102 days, but the FCC filings this week put much more emphasis, including why the license was returned so quickly and the resurrection of his license.

Izard has requested and has already obtained a revocation of the license transfer. In a motion for reconsideration filed May 13 and granted May 17, Izard said that following the surrender of the license, he was contacted by Family Life Ministries CEO Richard Snavely with an offer to purchase of the station if the license could be restored. He also details all the problems he faced during his brief tenure as head of WGWE and the mistakes he made along the way.

Izard begins: “In the weeks following the acquisition, I learned that serious defects in the WGWE transmitter that had been sold to me rendered it unusable without expensive repairs. I had absolutely no knowledge of radio broadcast equipment, but eventually got some help fixing the transmitter and upgrading the wireless technology at the transmitter site. »

“As a first-time broadcast station owner, I became confused and frustrated with the severe equipment problems and repair/maintenance costs. I also later found out that the tower lease had an escalator clause that nearly doubled the rent. Without reliable assistance and in the face of uncertainty, I made the hasty and ill-informed decision to simply hand over the WGWE license and pull myself from the broadcast. I never thought not at the time that selling the station was viable given the equipment issues and rental fees I didn’t think about how audiences would benefit from having another listening choice with WGWE .

Izard immediately admits several failures. He didn’t do his due diligence before purchase and didn’t find people to help with the maintenance of the equipment. If a qualified engineer had inspected the station before making the purchase, the seller would have been responsible for the necessary repairs, Izard could have renegotiated the terms of the agreement or walk away.

Within days of my voluntary cancellation of the WGWE license, Richard Snavely, Jr. contacted me about the station, indicating that his nonprofit organization Family Life Ministries, Inc. was interested in acquiring WGWE from me if the license could be reinstated. , the station was cleared to resume on-air operations, the license renewal application was granted, and the FCC agreed to assign the license to Family Life after we filed an assignment request. About that time I became aware that the WGWE transmitter site lease (which had not formally transferred to my company at closing but will) still had 28 months left and so the obligations on the lease did not end with the cancellation of the WGWE license. I have agreed to explore the possibility of a sale to Family Life, signing a letter of intent on April 29, 2022. After brief negotiation and agreement on a purchase price of $1.00 plus expenses to have the WGWE license reinstated and renewed, I signed an Asset Purchase Agreement with Family Life on May 13, 2022.”

Izard now admits not knowing the contracts he was taking on, mistakenly believing that the licensing assignment would remove his liability for the remaining 28 months on the existing tower lease. While it will lose the money spent on the initial acquisition and all operating and maintenance costs during its brief tenure as owner, the pending purchase of the license for $1 by Family Life provided a way out. backup for the remaining two years on the lease.

“My company has or will have continuing lease rights to the transmitter site, and therefore it remains possible, subject to FCC authority, to re-air the station at that site, at a temporarily reduced power. if necessary due to transmitter issues.. I am prepared to do so as soon as the FCC allows a resumption of operations. I am also prepared to respond to any inquiries related to the renewal of the WGWE license. If I had been better informed and less overwhelmed as a first broadcaster, I would not have voluntarily revoked the license, but would have found a way to sell the station or continue to operate it for the benefit of the public My decision to sell WGWE to a experienced broadcaster like Family Life for Almost Nothing aims to correct my misguided decision and restore a sound programming option to the station market so that audiences have additional listening options.

Izard is well aware of the mistakes he made operationally. Nor is it fair to judge placing his existing web feed on a station far from his target, as it could have been filler while dealing with the technical challenges he was facing. Izard is far from the only new owner to enter a resort completely unaware of the number of unknowns that will regularly be confronted.

If we as an industry want to expand the pool of station operators, more needs to be done to make it easier to own a radio station. Former FCC Chairman Ajit Pai had proposed an incubator program to encourage greater diversity and new entry into the media industry, giving existing owners the opportunity to exceed ownership caps once the new operator has completed the process. But that still wouldn’t give potential buyers the information they need or make it easier to find a property they want in the area they want to farm.

Most stations for sale are never publicly listed with brokers and other owners simply sharing information with each other or, if listed, in the vaguest generalities. Here’s a list I found this week: “This long-established station is quite profitable and has excellent growth potential. Seller financing is NOW available. Priced at current market multiples. This opportunity is definitely worth looking into. The listing doesn’t even give a location or a starting price to let anyone know if this is something viable. Compare that to how real estate is listed on shopping sites like LoopNet or generic businesses on a platform like BizBuySell. The purpose of an advertisement is to interest a potential buyer in a property and to give as much information as possible. Radio brokers generally treat their ads as if they were in the Radio & Records classifieds in 1992.

Engineers and other technical consultants need to make their services better known. A Google search for the keywords “radio station technical consultant” or “radio station engineering consultant” yields no specific results on the first page. Instead, we get paid results for podcasting ad tech companies, programming consultants, and a twelve-year-old news story about a new LPFM. It’s money left on the table by engineers and companies that have been in business for decades and let the digital world pass them by.

Perhaps most damning is this result:

What to do when buying a radio station

Now we see why Paul Izard faced so many difficulties as the owner of WGWE. Even if he had found a possible consultant to help him in his process, he still would have had a lot of obstacles. But how was he even going to find someone to help him?

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