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RadioTVDeals BuyerTools
- How to Buy a Radio or TV Station
- Importance of Thorough Due Diligence
- Download Sample Due Diligence Checklist
- A Media Broker Will Smooth the Way!
- FCC Attorney a MUST
- FCC Information
Reading Materials:
Eleven Costly Myths and Misconceptions About Buying Broadcast Stations
By Erwin G. Krasnow, Esq., Garvey Schubert Barer
Summary of the FCC Radio Ownership Rules
By Erwin G. Krasnow, Esq., Garvey Schubert Barer
How to Buy a Radio or TV Station
Purchasing your first Radio or TV station can be very exciting. Once you have determined that you are ready to acquire a broadcast station or station group or combo, there are a number of issues that you, the Buyer, must take into consideration.
A buyer must have a plan in place for financing the deal. Before most Sellers will begin any kind of serious negotiations, the Seller will require some kind of proof that the Buyer can close. Many Sellers require a letter from the bank or other funder of the transaction. Some may even require personal/business financials from a prospective Buyer. So, remember the saying “show me the money”, or at least be able to prove that you have financing in place. RadioTVDeals has provided a directory of resources for Broadcast Financing. It can be found on the second navigation bar located at the header of the RadioTVDeals website.
Next, Buyers must realize that broadcast transactions take much time and effort on their part. To begin with, Buyers must first determine what properties may or may not be on the market. This is done by word of mouth, or typically, a buyer will contact a Media Broker, who can canvass specific markets to find available station(s). Or, Buyers can quickly determine available station(s) simply by conducting a Station Search on RadioTVDeals, the nation’s largest marketplace for stations for sale.
Once the Buyer has made contact with the Media Broker or Seller representing the licensee, he or she will request appropriate due diligence materials. Careful due diligence requires that the buyer study all appropriate paperwork to properly look over the entire operation. If the Buyer chooses to move forward, then both parties will enter into contract negotiations. Once the Buyer and Seller have come to terms, and a signed purchase agreement is in place, the Seller must complete and file FCC Form 314, Application for Consent to Assignment of Broadcast Construction Permit or License. Once the application is formally accepted, it goes on public notice for 30 days. If there are no petitions to deny filed, and no further issues arise in the following 30 days, the FCC will more than likely grant the parties final consent so that a closing can take place. Closings can be scheduled at local abstract and/or lawyers’ offices with one or both parties present. Also, closings can be conducted by phone between FCC attorneys using fax and/or internet.
Importance of Thorough Due Diligence
A Buyer should request that the Seller supply a complete list of items relating to the entire operation. Please click on this link for a sample list of items – Due Diligence Checklist.
Prior to disclosing any specific information about the station(s), the Seller will more than likely require that the Buyer sign a non-disclosure or confidentiality agreement. This is standard practice in the industry, and is sometimes required so that the Buyer will use discretion with private company information revealed during the due diligence period.
Wise Buyers will study all due diligence materials carefully, making sure that the financials are acceptable and that the station(s) and all equipment are operating in compliance with FCC rules and regulations. The Buyer should determine if the terms of all assumable contracts and leases are acceptable, and if the asking price of the station(s) is fair and in budget.
If real estate is included in the sale, then the Buyer must conduct all due diligence necessary to protect his or her interests prior to acquiring real property.
It is recommended that Buyers hire a broadcast engineer who specializes in all areas of FCC compliance in order to achieve the best results during the due diligence period. RadioTVDeals has provided a directory of engineers and engineering companies to assist you in due diligence preparation. Please click on Engineers located on the second navigation bar in the header of the RadioTVDeals site.
A Media Broker Will Help Smooth the Way
Many times a Buyer will hire a Media Broker to search for specific types of broadcast property(ies). It is the Media Broker’s business to know (or find out) what station(s) may be on the market now or at some point in the future. Most Media Brokers have extensive databases of Sellers and potential Sellers developed through their years of experience and networking in the industry.
Media Brokers have a thorough understanding of the entire broadcast transaction process, so they become a great resource along the way. And, hiring a Media Broker will allow the Buyer to continue focusing on his or her current business or career during the course of time the Buyer is searching for a station(s).
Many experienced broadcast owners and operators will agree that a Media Broker can “step in” when the going gets tough -- when there is a breakdown in relations during contract negotiations between the Buyer and Seller. In many cases, Media Brokers salvage “deals” that would have otherwise gone sour. Yes, a Media Broker will help smooth the way.
For more information, see The Top Ten Reasons to Hire a Media Broker. For a comprehensive list of available media brokers, please see RadioTVDeals' Media Broker Directory, located on the black navigation bar on the site header.
Usually, broadcast station(s) are sold in an asset sale rather than a stock sale, utilizing a contract often referred to as an Asset Purchase Agreement (APA). To better represent their interests, Buyers are recommended to hire an attorney or law firm that specializes in communications law. For convenience purposes, the vast majority of FCC attorneys/firms are located in the Washington, D.C. area, with many located in close proximity to Federal Communications Commission headquarters.
It is customary that the Buyer’s council prepare a draft APA, which is then negotiated between both the Buyer’s and Seller’s attorneys and their respective clients. Once the contract is finalized, the attorneys will complete and file FCC Form 314.
FCC attorneys have a far greater understanding of the commission’s rules and regulations than mainstream business attorney, for example. RadioTVDeals has provided a list of FCC attorneys for your convenience. Please go to FCC Attorneys, located on the second navigation bar located at the header of the RadioTVDeals site.
APPLICATION FOR CONSENT TO ASSIGNMENT OF BROADCAST STATION
CONSTRUCTION PERMIT OR LICENSE --
APPLICATION FOR CONSENT TO TRANSFER CONTROL OF ENTITY HOLDING
BROADCAST STATION CONSTRUCTION PERMIT OR LICENSE
Self-Inspection Checklists:
For more details on “How to Sell a Radio or TV Station”, go to the appropriate FCC website address below.
Audio Division http://www.fcc.gov/mb/audio/ Telephone 202-418-2700
Video Division http://www.fcc.gov/mb/video/ Telephone 202-418-1600
Policy Division http://www.fcc.gov/mb/policy/ Telephone 202-418-2120
You can learn how to buy a radio station or how to buy a TV station with RadioTVDeals, the Nation's Largest Marketplace for Stations for Sale.
RadioTVDeals.com
RadioTVDeals.com is the nation's LARGEST marketplace for radio stations for sale and TV stations for sale or radio stations for LMA (lease) and TV stations for LMA (lease). RadioTVDeals helps radio and television station brokers (otherwise known as media brokers) and radio and TV station owners sell their station (s). We help people interested in buying radio stations or TV stations find the right station to purchase. We help people to find radio stations for LMA (lease) or TV stations for LMA (lease).
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