Spreading the cost of new digital transmitters allows the small to mid market station owner an opportunity to align an expensive cost of critical equipment to the timing of income as it occurs naturally, ad by ad, day by day, week by week. Consider a 5KW Transmitter with a cost of $10,000 to $12,000. By spreading the costs via a low rate, fixed term, financing arrangement the monthly expense averages about $250. Broken down on a daily basis that less than $95 a day. From a cost justification standpoint the revenue from a single ad spot a day would offset the cost for this important upgrade to the station's capability.
Another benefit, to the small market station is that by spreading the costs of digital technology the station owner gains a cash flow benefit that allows him to grow the station into the promise that digital technology brings. Not everyone expects digital broadcast to immediately create new revenue streams yet by spreading the costs the station "buys time" that allows the technology to "earn its keep".
I have been told that the utility and "useful life" of transmitters continue to range from 10 to 20 years. By spreading the cost of the equipment the broadcaster matches the costs to the useful life. This also acts as a "hedge against inflation" as the broadcasters pays for today's use with today's income and tomorrow's use with tomorrows revenues.
About Me
- Russ Munson
- I am recently retired from a 50 year career in sports and entertainment technology financing. I began my work in Bellevue, Washington in the 1970s. Over the years I held various positions on behalf of banking and finance leaders. I was successful by making friends of nearly every prospect, clients, co-worker or competitors I met. I especially like to see and help others achieve their goals and dreams.
Russ Munson
