Velocity Radio Management

Some Housekeeping, and then let’s get to work…

Where have I been?
I’ve been silent for the last few weeks. I thought it was the right thing to do. No drama, just a respectful decision.

Why form Velocity Radio Management?
To Protect & Grow the Value of Radio Stations. No more complicated than that. We’re all watching other industries getting annihilated because they fail to change their business model. I saw a leadership vacuum in our industry. Velocity is an Agent of Change. Radio values have gone from 20x multiples to a no-bid situation. I’ll concede that the no-bid is based on the current economic climate. So let’s fast forward to 2011, 2013. What’s the multiple then? Back to 20x? 15x? Double digits? People with a lot more data than you and me say single digits. I think Radio can do better than this.

Why leave RBC?
The same reason my Grandfather came to America in 1923: Opportunity. Because there’s demand for Velocity Radio Management. I got my first client in my first week and things are cooking along nicely. I didn’t want to sacrifice performance at either job, so I left RBC: The most difficult decision I’ve ever made.

SO LET'S GET TO WORK...
There once was an industry that had a lock on a specific type of entertainment, news and information. It penetrated homes and work alike. Although it was portable and personal it was limited to a geographic area and competition was limited. It happily coexisted with other media, even when television came along.

Along came the Internet and in a short time, consumers started going elsewhere for content. They started sampling new and different outlets from around the country…and around the globe.

Demand changed. Revenues took a beating. Egos and expenses didn’t react, not fast enough anyway: Delivery methods changed, new revenue streams were introduced…but it was too late.Stock Values plummeted. The industry collapsed.

Of course, I’m talking about Newsprint……….What did you think I was talking about??

Let’s take stock in these two industries:

The Good News:
- We’re slightly more insulated than Newsprint. Streaming audio is more difficult to reproduce than text.
- Radio’s model isn’t broken. To make $1.00, it costs us $0.90. ($0.80 if we’re good) The Newspaper model is broken: To make $1.00, it costs them $1.10.

The Bad News
- We’re over leveraged, and when you combine that with this economy, we're in trouble. Most radio companies are profitable, but every quarter, we have to pay ‘The Man’. And after we pay that, we’re sometime in worse shape than Newsprint.

Similarities are there, but there is an opportunity for a different future for Radio than Newsprint. Our assets can survive this economy and this new technological ‘threat’. The product won’t be exactly the same, the delivery will be different, the facilities will change dramatically…but the value of the asset will still be there.

In the coming weeks, I’ll discuss how we’re going to get there.

It’s good to be back.

-TR