SNL Kagan Sees Stronger Financial Future for Broadcast Radio after Difficult 2009

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Radio station values expected to recover some of the ground lost in the “leverage hangover” of recent years.

A new SNL Kagan study, “Radio Station Deals and Finance,” reveals a huge decline in deal dollar volume in 2008, a trend expected to persist in 2009. Radio station sales dropped significantly from $2.2 billion in 2007 to $932 million in 2008, with the average price per station also falling from $2.9 million to $1.6 million.    

SNL Kagan anticipates more forced sales, Chapter 11 reorganizations and declining cash flow multiples in the first half of 2009, as station owners cope with the weak ad market. On a positive note, the study suggests the current environment could open the door for investors to buy their way in at lower benchmarks than possible in the past, earning acceptable rates of equity return despite lower revenue growth.

“In recent years, radio has suffered from a ‘leverage hangover,’” said Robin Flynn, senior analyst at SNL Kagan. “Back in 2002, equity made up, on average, 76% of total market cap. However, that flipped in 2008, with 73% of total cap representing debt obligations.”

“Companies are now focused on reducing expenses and debt, and they will emerge from the current economic crisis with a more conservative business model, leading to revenue growth and at least partial recovery in station values off of today's historically depressed levels. With more than 235 million listeners, broadcast radio still remains a viable business in the long term.”

Reports such as "Radio Station Deals and Finance" are available exclusively as part of SNL Kagan Unlimited Information Service. For more information on this report and other media and communications data from SNL Kagan, call 866.296.3743 or email

Radio station revenues, valuation and leverage in the wake of the current economic crisis will also be a main subject at the 26th Annual SNL Kagan Radio/TV Finance Summit on Wednesday, April 1 at the New York Athletic Club in New York City. Organized by the SNL Center for Financial Education and attended by broadcast owners, investors and strategic advisors, this conference will present an unbiased look at the future prospects for growth and transactions across the broadcast sector, including radio. For more information on the event, call 434.951.7786 or email

About SNL Kagan
SNL Kagan, a division of SNL Financial LC, is a comprehensive resource for financial intelligence in the media and communications sector, including the broadcasting, cable, entertainment, motion picture, telecom, wireless, satellite, publishing and new media industries. The SNL Kagan suite of products integrates breaking news, comprehensive data and expert analysis into an electronic database available online and updated around the clock. For more information, visit

Visit the SNL Press Room at to learn more about resources available to members of the media.

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