Re: KGMB - KHNL - KFVE "shared services agreement"
Hi all:
Thought I'd try to clear up some confusion in the blogs regarding Broadcast Cash Flow and profit. BCF is derived by subtracting certain expenses from net revenues. BCF is an artificial number which has been historically used as a means for determining the value of a broadcast entity. Buyers and sellers often negotiate a broadcast property price based upon a multiple of BCF. In the past that multiple has been as low as 8 times and as high as 18 times...so if a station had $1,000,000 in BCF it might have sold for as little as $8,000,000 or as much as $18,000,000 over the past dozen years.
BCF is not profit. It does not include capital expense costs ( and broadcastng is a very capital intense business), any corporate expense or depreciation. And it certainly does not include "carrying charges" or the cost of servicing a station's debt.
Hope this helps.
Aloha,
Mike
Hi all:
Thought I'd try to clear up some confusion in the blogs regarding Broadcast Cash Flow and profit. BCF is derived by subtracting certain expenses from net revenues. BCF is an artificial number which has been historically used as a means for determining the value of a broadcast entity. Buyers and sellers often negotiate a broadcast property price based upon a multiple of BCF. In the past that multiple has been as low as 8 times and as high as 18 times...so if a station had $1,000,000 in BCF it might have sold for as little as $8,000,000 or as much as $18,000,000 over the past dozen years.
BCF is not profit. It does not include capital expense costs ( and broadcastng is a very capital intense business), any corporate expense or depreciation. And it certainly does not include "carrying charges" or the cost of servicing a station's debt.
Hope this helps.
Aloha,
Mike
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