MCH Enterprises, Inc., has developed a “primer” on station valuations. Many people in the industry accept that reasonable multiples paid during station transactions are currently 1.25 – 1.5 times revenue or 5 – 6 times “cashflow”, and these multiples will change as marketplace conditions change. However, most people do not know why that yardstick exists. Our primer explains that and also describes the multi-faceted approach we employ when conducting valuations.
It is important for all potential sellers of media properties to remember these important points:
- Negative cashflow is not an asset;
- Buyers always determine what is paid for a media property;
- There are three numbers associated with the sale of a media property: What the seller wanted, what the buyer wanted to pay, and the final figure that gets published in the trade press after the transaction has closed.
For a printable version of our Primer on Radio Station Valuations, click here
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