Local Focus, Sports Keeps Radio Profitable in Arkansas

by Kate Knable  on Monday, Feb. 18, 2013 12:00 am  

Merrill said he makes a comfortable living and employs two other full-time staffers.

“We are pretty profitable,” he said. “All of our bills are covered and we’ve had some left over.”

About 95 percent of KEWI’s advertisers are from Saline County. An “emotional connection” is a major reason they pay to sponsor a program on the station, Merrill said. “More than getting their name out, they want to tie their name with what’s happening in the local community,” he said.

Showing his confidence in the radio business, Merrill this month is buying, per Federal Communications Commission approval, five other radio stations in two other small Arkansas markets. He declined to name the stations.

An AM/FM station sells for between $200,000 and $800,000 in markets of fewer than 100,000 people, said Peter Bowman, who has been appraising radio stations across the U.S. since 1987. Bowman owns Bowman Valuation Services in Alexandria, Va. Variables that could drastically affect the value of a station include the land and buildings it owns, he said.

‘Local Is Key’

Merrill’s KEWI isn’t alone in its success.

Signal Media, a three-station chain owned by Philip Jonsson of Little Rock, is a profitable company, according to General Manager Steve Jonsson, the owner’s son.

Signal’s radio stations are all in the Little Rock market. They are sports talk station KABZ-FM, 103.7 (The Buzz), classic rock station KKPT-FM, 94.1 (The Point), and R&B and oldies station KHLR-FM, 106.7 (Heartbeat). KABZ does the best financially of the three, and it has the most local content, Steve Jonsson said.

Jay Bunyard of De Queen operates 19 radio stations in six Arkansas markets. His stations and their websites cover city council, school board and quorum court meetings, as well as high school sports, police reports and obituaries. Even the music formats air local news and sports.

Bunyard said his stations don’t have much competition, and he indicated that the business is quite profitable.

“There’s only one place you can go to get current local news. That’s radio, and the radio station’s website,” Bunyard said of his stations’ markets. “Being local is the key to success.”

 

 

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