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Succession Planning for Radio Owners

by | Jun 15, 2023 | BIA, Blog, Radio

About 30% (or about 460) of the commercial radio owners with an estimated $80 million or less in total revenue in the U.S. made their most recent acquisition or launched their newest station 20 or more years ago. Nearly 15% of these owners acquired/turned on their newest station 30+ years ago. (Source: BIA’s Media Access Pro.)

With proper planning the founder or current leader of the business can decide who will control the family business when the founder steps away, prepare for a transfer or gift of a business interest or an outright sale of stations, or a donation through a charitable contribution.

A business valuation is an indispensable component in succession planning. Understanding the value of the stations/business may be the first step in the process as it impacts gift and estate taxes, reallocating equity, timing decisions, and can help to align family members.

Many radio stations are owned or controlled by a single person, a husband and wife, or a parent and children. The founder’s long-term wishes for the business may differ from other family members or stakeholders. Thinking through the options and discussing them with family members and/or shareholders can pave the way for making the best decision for all involved.

One option for business owners is to create a revocable or irrevocable trust, which can be used to protect assets, minimize taxes, and provide for loved ones. Because laws vary from state to state and to structure the trust according to your needs, consulting with your attorney and/or financial adviser is essential.

When family members aren’t able to move into a leadership role, there may be others outside the family willing to take the reins. Long-term management members may be ready to buy into the business by purchasing an equity stake or acquiring the radio station(s). This may involve the need to obtain financing, so planning ahead is key. Doing this enables the owner to access capital or liquidity.

In some situations, the owners may not agree on the future of the business. Those that wish to sell their interest could do so, which may require reallocating equity. Having buy-sell agreements or other operating agreements in place can help to make this process smoother.

A charitable donation of a radio station can be a smart strategy because the donor may be able to deduct its full fair market value (FMV). Capital gains taxes may also be eliminated when donating assets directly. The total tax savings from giving a radio station to a charity may net more than selling the asset and donating the cash proceeds. Charitable donations during one’s lifetime can remove the gifted assets (and any future appreciation related to those assets) from one’s estate.  We’ll discuss more about fair market valuations and IRS requirements for charitable contributions next month.

If you own a radio stick (an underperforming station), the most cost-effective way to get an estimate of its current value is a Radio Stick Value Calculator. This could aid in deciding whether to sell or make a charitable contribution. BIA is now offering Radio Stick Value Calculators at a discounted price of $1,200. See more about the calculator here.

Sometimes it’s essential to engage the firm with the most extensive knowledge and experience in broadcast valuations.  Succession planning is one of those times.  BIA’s team has been preparing fair market valuations of broadcast properties for the purpose of M&A, obtaining financing, estate and gift tax, charitable donations, and litigation for almost 40 years.

We would be happy to have a confidential conversation. Contact Lauren Ross ( or 575-621-4276) or Geoff Price ( or 703-729-2437), and we’ll schedule a call.