[BC] Why an older transmitter may be a good choice

[Robert Meuser]

I thought that was what due diligence was all about. I guess you sort of 
explained that in the last paragraph.

R


Mike Schillhahn wrote:

> From a business office perspective, running an old box may be the only 
> alternative due to financing covenants.
>
> If the purchase price of the station is financed, the loan is secured 
> by specified physical assets, usually including the transmitter and 
> studio chain.  Changing out the transmitter, regardless of the cost 
> savings, would require opening up the master financing document and 
> doing a complete rewrite of the loan. And chances are, if the 
> purchaser paid on the high end of the multipliers for the property, 
> there's no wiggle room on the asset side to justify the new secured 
> package, even if it does make operational sense. Keeping the old box 
> on as a backup, so it remains a secured asset may not make financial 
> sense, either (from the banker's perspective) if adding the newer box 
> requires even moderate expansion/remodeling of the transmitter shack 
> to accommodate both physically -- and that cost sometimes exceeds the 
> price of the transmitter.
>
> The best solution would be to include provision for new/updated 
> physical plant in the original loan, but there are very few small to 
> medium operators who have either the foresight or the expertise 
> available to figure that out in advance of the purchase.
>
>
>
> _______________________________________________
>
> The BROADCAST [BC] list is sponsored by SystemsStore On-Line Sales
> Cable-Connectors-Blocks-Racks-Wire Management-Test Gear-Tools and 
> More! www.SystemsStore.com       Tel: 407-656-3719    
> Sales at SystemsStore.com
>