Posted by Bud on January 22, 2010 at 15:54:06:
Turn in the market? Not yet, say brokers.
The announcement that WNTD, Chicago (950) would fetch $17.5 million for Mark Follett's Sovereign City Radio isn't likely the pivot point that it appears. With so few deals being announced, brokers say there's not enough data to know whether the market has turned and believe it won't become clear until cluster or group deals are struck.
Brokers say because Follett controls both Sovereign City and the group of investors buying WNTD, it's not the predictor of where prices are heading. Media Services Group director Bob Heymann says, "It clearly is not a positive data point because it's not an arms-length deal. It's a transfer from the right pocket to the left."
Other brokers agree, and peg the real value of WNTD at somewhere between $7 and $9 million. That's considerably below the $15 million Follett paid for the station in 2007.
Heymann says if there is good news, it's that prices are now as low as they'll go. "There seems to be a feeling there's been a pick-up in activity and more things are moving," he says. Brokers are in agreement the spread between bid and ask remains about two-points, with buyers seeking prices as low as five-times cash flow, while sellers are reluctant to go below seven-times.