Make An Offer: Here’s a point that needs to be made as well as serve as a tip for those of you are thinking about buying a radio station. Recently, we were in the middle of a conversation with a prospective purchaser for one of our listings, and the buyer made the observation that while the stations were generating $150,000 or more in annual cashflow, the sellers were just going to have to come down on their price (which by the way was only about 6 to 7 times b.c.f.) Our response was that until there’s an offer on the table and negotiations are actually underway, there’s nothing that would motivate any seller to “come down on their price”. Our intention wasn’t to be snotty or anything, we simply needed to make the point that if you truly want to be in the game as opposed to sitting on the sidelines, you have to be ready to jump in and have a go at it. The process begins when you make an offer. Sometimes all it takes is a reasonable offer and sometimes it’s hand-to-hand combat. Nevertheless, the process starts with the offer…in writing…signed. That’s where it begins.
We have seen some very strange offers over the past twenty-something years, and many have actually led to win-win situations. So don’t be afraid to make an offer. If it’s a non-starter we will be happy to point that out, but we do have an obligation to submit all offers just as we have an obligation to disclose all material facts. Sometimes we are surprised at what leads to a successful transaction.
That’s 30 for now…for what it’s worth.