17 Bonneville Radio Stations to Sell for $500 Million

[PaulBoyerFan]

Bonneville Communications is leaving the DC, Chicago, Cincinnati, and St. Louis radio markets. Anyone know what the $505 million is going to be used for? Expand media operations in Western markets? Pay down debt in other for-profit areas?

http://www.prnewswire.com/news-releases/deseret-management-corporation-enters-into-agreement-to-sell-17-radio-stations-to-hubbard-broadcasting-inc-114216534.html

[ELF1024]

Bonneville Communications is leaving the DC, Chicago, Cincinnati, and St. Louis radio markets. Anyone know what the $505 million is going to be used for? Expand media operations in Western markets? Pay down debt in other for-profit areas?

http://www.prnewswir...-114216534.html

Chances are that no matter what it goes to; you'll find a new axe to grind.

[PaulBoyerFan]

It's an interesting move. WTOP, at least, was a cash cow:

"The purchase, and the purchaser, were a surprise. Bonneville, which is owned by the Church of Jesus Christ of Latter-day Saints in Salt Lake City, has been a highly successful radio station operator, with WTOP as its crown jewel. The station ranked second among radio outlets in the nation in revenue last year, according to BIA Financial, which tracks the industry. The firm estimated WTOP's annual revenue at $51.03 million, second only to Los Angeles station KIIS-FM ($55 million), the radio home of "American Idol" host Ryan Seacrest."

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/19/AR2011011904599.html?hpid=moreheadlines

[BookofMormonLuvr]

Maybe they will use the money to buy large tracts of land in Jackson County

[jskains]

So there is a focus on the fact that the Church reduced the size of two profitable divisions. One is the Deseret News, the other being Bonneville Communications. Apparently some of those operations were also very profitable.

I see it as refocusing. Both the Newspaper and the Radio business I think have limited futures (the newspaper more limited). I haven't bought the paper in ages, and I don't listen to the radio (all iTunes - no commercials).

The critics are screaming this is the proof that the Church is dying off and has major cash flow problems. One snarkiely commented that "perhaps the Church's employee pension fund has run out".

Does anyone really have any insight on what really is going on? Is City Creek that big of a mess? Is the Ogden rebuild a similar mess?

From what I know, the Family History division is booming, KSL/Deseret News and the stations that Bonneville is keeping are expanding. DMC's new Digital division is growing, and the Church is funding a few temple overhauls.

Am I missing something?

Thanks for the input.

JMS

[cinepro]

Is City Creek that big of a mess?

Yes?

[jskains]

Yes?

I walk by it every day. Looks pretty nice to me. But then again I walk by the COB, and still can't see it falling apart. And trust me, I looked. And the conference center is still in good shape. I looked for those cracks and pieces falling to the Earth due to horrible construction.

JMS

[Zakuska]

Well lets see... the entire economy... from corner dime store to wallstreet corporate offices are going through hard times. Many closing, many not needing entire fleets for advertising and PR etc. and the for profit arm of the church restructures in such an atmosphere and all of a sudden... the sky is falling?!

[oats]

The church ought to get into mining.

[Zakuska]

The church ought to get into mining.

They used to be into mining pretty heavily.

The Las Vegas Mission (1855-58) was founded as a church outpost on the Spanish Trail leading to southern California. Mission leader William Bringhurst came with 29 other men to build a fort at the main oasis in Las Vegas Valley. The assignment from church authorities was to serve as a way station between Utah and the Mormon settlement in San Bernadino, California, as well as to convert the local Native Americans to the LDS faith. The desert heat and resistance from the neighboring Indians defeated the industrious Mormons after about two years. They built their fort (recently excavated and partially restored after decades of decay) and reached out to their potential converts. In the settlement

[Bill “Papa” Lee]

I walk by it every day. Looks pretty nice to me. But then again I walk by the COB, and still can't see it falling apart. And trust me, I looked. And the conference center is still in good shape. I looked for those cracks and pieces falling to the Earth due to horrible construction.

JMS

Maybe this will help...

Here you go

[Jeff K.]

The critics are screaming this is the proof that the Church is dying off and has major cash flow problems. One snarkiely commented that "perhaps the Church's employee pension fund has run out".

Don't they realize ours is a perpetual fund?

[PaulBoyerFan]

It doesn't surprise me that the Deseret News had significant layoffs. Newspapers generally are desperately trying to survive and adapt to a digital world. The sale of the radio stations is more surprising, given that they were apparently unexpected by at least some media observers and WTOP is the DC area's highest rated and most profitable station. Plus, the selling of 17 stations to a small media company with some TV stations and 3 radio stations is a bit unusual.

[ELF1024]

The critics are screaming this is the proof that the Church is dying off and has major cash flow problems. One snarkiely commented that "perhaps the Church's employee pension fund has run out".

Bah! Wishful thinking on the part of the Anti's...

[aznative]

Now they can pay cash for the glass ceiling on the mall-trosity...

[cinepro]

The church ought to get into mining.

Where's John Koyle when you need him?

[cinepro]

The critics are screaming this is the proof that the Church is dying off and has major cash flow problems.

Well, let's suppose the Church was having "cash flow" problems. What could it do?

It can't raise tithing above 10%. But it could try to get members that underpay tithing to get up to 10%. It could try to reduce cash outflow by replacing paid employees with volunteers (thus getting members to give more time instead of money). It can sell business units for a one-time cash infusion. It can close down cash-negative business units. It can borrow.

Any way you slice it, they would either need to borrow, increase the amount of cash coming in, or decrease the amount going out.

And any way you slice it, City Creek represents a huge amount of money going out, and none coming in.

[Sevenbak]

Where's John Koyle when you need him?

Or the Lost Rhodes mine in the Uintahs.

Or the secret mine in the foothills above This is the Place.

Don't you know we're all just waiting for the apocalypse for it all the riches to come in?

[ebeddoulos]

These guys are idiots. What the internet and blogs are now doing to the print media, the steaming audio and vidio are beginning to do to the broadcast media. Anyone can now have their very own internet radio or TV station and the software can be had for free. What those clowns see as a desperate selloff, is, IMHO, a very astute business decision.

[Nofear]

Well, let's suppose the Church was having "cash flow" problems. What could it do?

It can't raise tithing above 10%. But it could try to get members that underpay tithing to get up to 10%. It could try to reduce cash outflow by replacing paid employees with volunteers (thus getting members to give more time instead of money). It can sell business units for a one-time cash infusion. It can close down cash-negative business units. It can borrow.

Any way you slice it, they would either need to borrow, increase the amount of cash coming in, or decrease the amount going out.

And any way you slice it, City Creek represents a huge amount of money going out, and none coming in.

Tithing is an entirely irrelevant issue since tithing money isn't being used to fund the project. The project is being financed by Property Reserve, Inc.

[PaulBoyerFan]

These guys are idiots. What the internet and blogs are now doing to the print media, the steaming audio and vidio are beginning to do to the broadcast media. Anyone can now have their very own internet radio or TV station and the software can be had for free. What those clowns see as a desperate selloff, is, IMHO, a very astute business decision.

It probably is a good time to sell out of terrestrial radio. I think that the industry will fare better than print, but it's not a growing market.

[Calm]

And any way you slice it, City Creek represents a huge amount of money going out, and none coming in.

Didn't someone mention awhile back that a family member had tried to purchase a condo at City Creek and the waiting list was so long he gave up? If so, there is some money already coming in.

[Analytics]

Tithing is an entirely irrelevant issue since tithing money isn't being used to fund the project. The project is being financed by Property Reserve, Inc.

Tithing is quite relevant. Property Reserve Inc. is owned by the Church, and the cash flow problems of Property Reserve are the cash flow problems of the Church. If the Church had positive cash flow in its church operations, it would be looking for a place to invest the extra money. If Property Reserve had negative cash flow because it was building an expensive mall, it would be looking to borrow money or receive capital infusions. Savvy businessmen would recognize that the positive cash flow of the church could take care of the negative cash flow of a church business.

Just because the church says it doesn't use tithing money to fund the mall doesn't mean that the Church doesn't purchase securities from Property Reserve, which Property Reserve then uses to fund the mall.

[krose]

I wonder why a religion needs a "for profit" arm?

[Nofear]

Tithing is quite relevant. Property Reserve Inc. is owned by the Church, and the cash flow problems of Property Reserve are the cash flow problems of the Church. If the Church had positive cash flow in its church operations, it would be looking for a place to invest the extra money. If Property Reserve had negative cash flow because it was building an expensive mall, it would be looking to borrow money or receive capital infusions. Savvy businessmen would recognize that the positive cash flow of the church could take care of the negative cash flow of a church business.

Just because the church says it doesn't use tithing money to fund the mall doesn't mean that the Church doesn't purchase securities from Property Reserve, which Property Reserve then uses to fund the mall.

The auditors that audit the Church clearly state that the expenditures of tithing and other free-will offerings are in accordance with established Church policy. The Church has plenty that it would spend the tithing on if there was more tithing revenue -- and that doesn't include bolstering up short-fall projects. The Church has plenty of for profit organizations that could assist if Property Reserve Inc was in trouble. There is, however, no evidence whatsoever of such. Rather, as evidenced by the original post, it seems more likely that the Church would simply close down or sell that aspect of its for-profit activities.

I wonder why a religion needs a "for profit" arm?

Because there is plenty that the Church does that does not necessarily or ethically qualify as tax-exempt activities. For an idea see Deseret Management Corporation