4-26-2013
Devastated. Emotionally spent. Poorer. Frustrated.
These are all words that describe me after my first station deal fell through. I had naively assumed that all would go well. That if I worked hard enough, I could overcome all obstacles. Nope. Some things can?t, and shouldn?t, be overcome. Some deals need to be walked away from. I know that now.
But, as I mentioned last week, I wouldn?t give up yet. There were other stations out there to be bought.
I literally picked my head up off the table and squared my shoulders. I emailed the broker for a station that was also for sale near our market. It hadn?t been my first choice, but it would do. This time, however, the conversation sounded much different.
I asked him if the station was still for sale. After he confirmed with me that it was, I told him that I was interested but not at anywhere near the listing price he originally entered the market at. In fact, I shot him a figure more than 40 percent less than the listing price. I also told him that we couldn?t draw this out. I wanted to know fairly quickly whether they were in or out and put a timeline on having a finished APA.
I was fairly shocked when he asked me to send him a signed letter of intent. He was willing to take that offer to the sellers. It turns out the sellers were motivated to move the property. However, they were concerned with a few things:
? Keeping it a Christian station
? Price
? Retaining their sales manager
Not only did I need to address these issues, but (wouldn?t you know it?) I found myself in a bidding situation with another company. This company happened to be larger, more capitalized and had more experience at closing deals. (Apparently, a history of successful closings can mean more than money sometimes.) Additionally, they were specifically a Christian broadcast company. Now, I had to negotiate on these points against a company with a track record.
I felt for certain that I was in a favorable position on this deal. I was the local gal. They were a bigger, out-of-town company. I bid the higher price. I even tacked on an amount to be used for a severance package as I would evaluate keeping their manager but wouldn?t guarantee it. The other company definitely did not plan to keep this associate and made this known. I had planned to keep the station Christian and stated as much. They were specifically a Christian company. So, we tied there.
Or did we?
I was notified in a very timely fashion by the broker that I would not be granted the purchase agreement with them. It went like this:
?I can tell you that the price is not at a higher level than (the price you offered). Your new entry into the broadcasting field also did not play a part. We thought you put an excellent proposal together. They made their selection based on this owner having been established as a Christian operator for the entirety of their life, and the certainty that KMFC will remain Christian as long as this operator possesses it. They appreciate your desire to keep it Christian, but you just did not have the history of Christian programming that this group does.? Jason James, Patrick Communications.
Ugh. Here I was again. If I wanted to cry before, now I wanted to hit something. It just wasn?t working out the way I thought it would.
What I learned from this part of my journey is that:
? Working with a good broker who is quick, thorough, and communicative is worth his weight in gold. At least in good coffee beans. (I?m a massive coffee fan, so this is good!) This wasn?t a long drawn-out process. I knew where I stood at all times and found that to be easier. Jason helped me understand what I was up against, provided good feedback after, and even some comforting words at the end. (I should also mention, for the sake of full disclosure, that Larry Patrick, with Patrick Communications, has offered to sponsor me in the NAB Broadcast Leadership Training Program. Additionally, Larry made Jason available to me to ask questions during my discovery phase last year. )
? Sometimes, a reputation as a broadcaster in closing deals can carry valuable credit.
? If you are looking to buy in a niche format, that experience with someone selling ?their baby? will go a long way. In small markets, people do care what happens to their stations after they no longer have them.
And so, another one bites the dust.
What in the world could I do next? Next week, I?ll tell you if there were any options left and the conclusion I came to.
Have any advice for Erica? You can reach her at erica@theruckusgroup.com
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