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Radio Station Bank Loans - Observations - Winter 2012
New bank loans (under $20 Mil.) to radio and TV station owners remain very scarce, although some smaller lenders have been refinancing existing loans. Despite this, there are a few financial institutions that are making new loans. In our work we are conducting appraisals for new clients, who are often small banks, originating their first loans to local broadcasters.
All of these projects have had the following characteristics:*
- The stations are currently operating on a profitable basis, and are located in the same city as the bank
- Loans are in the range of $3 Million to $15 Million
- Total debt is no greater than five times (5 x) cash flow, and most loans are only three to four times (3x to 4x) cash flow.
Bank loans do not appear to be available in the following situations:*
- Stations that are currently operating at a loss, or operating with minimal profitability
- New ("start-up" or "stick") stations
- AM-only radio stations (except a few Asian language stations in the very largest markets)
- Low-Power TV stations that lack long-term cable carriage contracts, or major network affiliations
- New radio, TV, or cable programming services
* HSMC is not a commercial bank, or a direct lender. It is it not making any offers to lend or invest money in any manner. The preceding comments represent professional opinion, and belief. These are subject to change without notice.