By Bill Bernardoni
There was a line in Inside Radio's Deal Digest this week that I read twice.
A buyer in Texas filed to purchase KSTA, an AM station at 1000 on the dial in Coleman, for $3,500.
That's less than a decent used pickup. It's less than a lot of stations spend on a single remote broadcast. And it's not a punchline. It's a signal.
What Happened in Coleman
The details matter, so here they are as Inside Radio reported them. The FCC canceled KSTA's license in April after owner Rex Tackett said operations weren't economically viable and he couldn't find a buyer. He's also selling the news-talk simulcast of KXYL-FM and AM to Lonestar Broadcasting Group in a pending $200,000 deal, and he's donating another silent FM in Brownwood to Howard Payne University. When everything closes, he's out of radio ownership.
The buyer of KSTA already owns a classic country AM in the area. So this isn't a stranger snapping up a bargain. It's a neighbor picking up a signal nobody else wanted.
I don't read that as a villain story. I read it as a man who ran local radio in central Texas deciding the math didn't work anymore, and trying to land his stations somewhere instead of just turning them off.
The Same Week, a Different Price Tag
Put KSTA next to the rest of the same Deal Digest and the picture gets clearer.
- Pamal Broadcasting is paying $1 million for 10 Galaxy stations in Syracuse and Utica, plus six translators. That's about $100,000 a station.
- Two small New Mexico stations, in Grants and Socorro, went for $50,000 each.
- A Little Rock AM that's currently off the air sold for $350,000, entirely seller-financed.
- A religious broadcaster, the University of Northwestern–St. Paul, is paying $500,000 for a single FM translator in Kansas City to carry its contemporary Christian station.
Read that last one again. A translator, a small FM relay, in a big market went for more than 140 times what a full AM license in a small Texas town did.
That's the market telling you where the value is. It's in FM signals near a lot of people, and increasingly it's in the hands of buyers who don't depend on local ad sales to keep the lights on.
Religion Passes Country, and Keeps Going
The same week, Inside Radio's October format counts showed religion ahead of country by 98 stations, 2,190 to 2,092. A year ago, country led by 28. Religion has gained 68 stations in 12 months; country has lost 58. Religion has been the most common format in America since February.
News/talk lost 32 stations over the same year. Sports lost 23. Spanish lost 28.
I want to be careful here, because this is the part people get wrong — and I got my start in Christian radio, so I know that world from the inside. Religious radio isn't a problem to be solved. Those stations serve real listeners, many of them in exactly the small towns we're talking about, and a lot of religious broadcasting runs on listener donations rather than local ad sales. That's a business model that holds up when the car dealer and the furniture store cut their budgets. When a family-owned AM goes dark and a ministry picks up the frequency, somebody is still being served.
But it's worth naming what's shrinking. The formats losing ground are the ones that carry local talk, local sports, and local news. Those are the formats that depend most on the local ad base, and the local ad base in a lot of towns has been thinning for years.
Consolidation Isn't the Whole Story
It's easy to blame all of this on big companies. I've criticized consolidation plenty, and I'll keep doing it when it guts a newsroom.
But Pamal buying 10 stations in two upstate New York markets isn't the same as a hedge fund stripping a cluster for parts. A regional operator that already runs Albany, expanding next door, may be the best outcome those stations could get. Sometimes scale is what keeps a signal on the air.
The harder truth is that a lot of small-town stations aren't being consolidated. They're being abandoned. Nobody's fighting over KSTA. It went for $3,500 because that's what a small-town AM license is worth when the town can't support it.
What Small-Market Stations Do
I worked as a morning show host in small-market radio, helping with news and hosting on music stations in towns most people drive through without noticing. The group I worked for doesn't own those stations anymore. That's not unusual. In towns that size, the station was the place you called when the power went out, when school was canceled, when the county fair schedule changed. Nobody else was going to tell you.
When those stations change hands, change formats, or go silent, nobody holds a press conference. The signal just changes. And most people don't notice until the next ice storm, when they turn on the radio and there's nothing local on it.
What Small Towns Still Need
Local radio isn't going to be saved by nostalgia. It's going to be saved by somebody finding a model that works at the size of the town. Some of that is already happening:
- Owners who run AM and FM together and share one staff and one sales effort.
- Noncommercial and community licensees, from universities to ministries to school boards, who can carry a signal without needing a big ad base.
- Rule changes that cut fixed costs, like the FCC's current FM tower-spacing proceeding, so a small station isn't priced out of keeping its signal.
None of those is a perfect answer. Together, they're better than a $3,500 sale after a canceled license.
The Bottom Line
A $3,500 radio station isn't a bargain. It's a warning. It tells you what a local license is worth when the local economy behind it has thinned out, and it tells you which formats can still pay the bills when it does.
The towns are still there. People still drive to work, check the weather, and want to know whether the game's been moved. The question is who's going to be on the air to tell them, and whether we figure that out before the next license gets canceled.
Bill Bernardoni is the founder of Bernardoni Media & Marketing and co-hosts America at 250: Due Diligence with Steve Herman.
Running a small-market station and weighing what comes next? Let's talk it through.
Leave a Reply