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It's been an extraordinary year for Townsquare Media and CEO Steven Price. While most big radio companies are focusing on paying down enormous debt loads they've accumulated of the past several years, Price has been quietly building the 3rd largest radio company in America. Most recently, Townsquare picked up 71 stations thanks to Cumulus' need to raise cash to purchase WestwoodOne. In addition to radio, the company is also building local web properties and focusing on other local businesses, such as events, so residents in each community they operate will think of them first. They take the name Townsquare and try to incorporate that literally in each local market. Price has been named the 2013 Radio Ink Radio Executive of the Year and will appear on the cover of the January 20th issue of Radio Ink Magazine. Here's a preview of that interview.
RI: You talk about building a local media/entertainment company in small town America. Are all the elements that you want to be part of that in place? The radio? The online? The onsite? Or is there something else you don't have yet?
Price: That's what we spend a lot of time thinking about. If we want to be the dominant local media/entertainment commerce company in small towns, we need the right pieces. What we start with is great brands, great radio stations, which have lots of listeners, and a great local salesforce. Then, we think about what are other things we can do to leverage off of the fact that we have a big audience, a big megaphone, and a big local sales force. Do we have all the pieces in place today? No. There are tons of things we either think about and want to do, are planning, or haven?t even thought about yet. But, nobody who?s standing still today is succeeding. There are lots of ways that our audience, our consumers, and our business clients are going to be consuming and wanting to market their brands and we have to figure out the right products to go meet that. I think we?ve done a pretty good job of turning our company into a multi-product cross platform company, but I don't think it is by any means, complete.
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RI: When your team is eyeing an acquisition, what specifically are you looking for?
Price: We look for the right kind of market. Our strategy has been not to be in the biggest cities. We understand, it?s probably not what we?re good at. We understand small and midsize towns?how to market there, how to promote there, how to create products that are relevant there. So, we look for size of market. If a top 10 city was available, that?s not something squarely down the middle of the fairway for us. We look for market size, we look for region. We like the Northeast. We like the Midwest. We like the whole area of Louisiana and Texas. We like the Northwest. We like Montana, Wyoming, Idaho, Washington. So, that's one thing. We look for dominant brands. In our last acquisition with Cumulus and then with Peak, buying Boise?these are great brands, dominant clusters, which are attractive to us. If there happens to be an army base or a state capitol or a big university? some stabilizing force in their town?that's attractive. Then we look at the local team and see if we think it?s a team that understands what we?re trying to do, move as fast as we want to move. It?s hard if the people in the market really don't embrace the strategy.
RI: What is your sense of the multiples out there and what they will be over the next five years?
Price: Well, they have clearly moved up, which is a good thing for all of us, even if we are trying to buy stations. Where public companies are trading in the ten times range, maybe in that zone. Now, is that the private market? I don't know. There haven't been a lot of private market deals. Where was the industry? It was sort of at 6 or 7 range four years ago. Clearly people feel like there?s some stability. The multiples moved up. Radio does have a very stable cash-flow. Not a lot of working capital or cap-ex. So, cash-flow is very high. I don't see any reason why multiples shouldn't be robust as we continue to show that this industry is healthy, stable and growing. Does that mean the private multiple is at 7 or 9 or 11? I don't know what the private multiple is. There hasn't been that many trades.
