The Business An independent Fox affiliate broadcasting in a small, remote city in the Pacific Northwest. Seventy-five percent of revenues come from advertising. (Local customers account for the lion's share.) Additional revenues come from paid programming (that is, "infomercials"), religious programming, and the production of commercial spots for advertising clients. The station ranks fourth in its market in local ad revenues, but second in revenues from national advertisers. Its popular "kids' club" makes it the strongest local station among preteens, but it's also well entrenched with the oh-so-desirable ages-18-to-34 demographic. The seller is retiring.

Financial Summary 1991 1992 1993
Gross revenues $2,437,000 $2,577,000 $2,477,000
Recast earnings before depreciation, interest,taxes, and owner compensation $635,000 $832,000 $810,000

Price $8.5 million

Outlook Network television could use a laugh track right about now; the three major networks saw their total audience share decline nationwide from 91% in 1979 to 61% in 1993, owing mostly to the meteoric rise of cable TV. The upstart Fox network also has nibbled away at the network audience since it started broadcasting, in the mid-1980s, although its overall ratings dropped this past season. (And then, of course, there was the Chevy Chase late-night fiasco. . . . ) But Fox recently acquired (for a pretty penny) the rights to broadcast the NFL football games, starting in the fall of 1994. And Fox recently swiped 12 prime affiliates from the other three networks (though mostly from CBS).

Price Rationale It's a prime time to sell a station. The market is hot, spurred on by a recovering economy and a concomitant rise in ad sales. With demand for TV stations at its highest in years, multiples can range from 8 to as high as 11 for premium markets. The 10.5 multiple reflected in the asking price implies that the current owner is trying to catch the crest of the air wave. But all that market interest may not make it to this out-of-the-way location. Sure, the station is doing pretty well (33% margins are considered very good for a Fox affiliate), but it's up against a local economy that's on horizontal hold. Most observers value it at around 8.5 times earnings ($6,885,000).

Pros "The Simpsons."

Cons "Married . . . with Children." -- Christopher Caggiano

Inc. has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to National Business Brokers at 714-770-7451. n