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PROSPECT ACQUISITION Message Board

  • raystk raystk Aug 25, 1999 11:49 AM Flag

    Cost factor

    I don't think expenses are a factor here.
    Programing costs, too some extent are, since PAX had to
    prove to potential buyers that they could make a go of
    it on their own, by getting quality advertisers.
    This was done, so now the main issue--selling the
    channels and stations is on the table. If Bud's initial
    purpose was to just air family programs and make a
    profit, he didn't have to buy 70plus stations and have 7
    channels. His primary objective would have been to develop
    successful programing first, then expand his empire. Without
    any indication that family tv would succeed, PAX
    continued to purchase stations. What Bud has done is create
    a very salable product that will make him a fortune
    for a short term, high risk gamble.

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    • That is very cute, web. I like it and agree with
      the implications for PAX.

      I remain an admireor
      of Bud Paxson. He is smart and decent. His
      conception for PAX is brilliant and important for American
      society. I believe the professor on CNBC a while back who
      proved there is a great supply/demand imbalance for G
      rated programming. Among other things, he said that
      only 2% of movies made are rated G while 30-40% of
      Americans have a strong preference for G rated movies.
      There are many millions of people, thruout the USA, who
      are seeking a steady diet of family programming who
      are only kept from it because they don't know where
      to find it.

      I do doubt whether Bud has the
      skills to manage operations sufficent to grow PAX to its
      full potential without getting bored. That doesn't
      mean I think he is a loser. To the contrary, I think
      his heart is strong and worthy of our investment
      support.


      In a nutshell, I think Bud should sell; I hope he
      does sell but I do think he is resisting. I also hope
      his idea continues to live on, that PAX might keep
      its identity and basic mission, and that we would
      someday see a 4.0 rating. How that gets PAX as big as
      MSFT, I dont quite see.

    • NBC is a know and profitable name...it's a
      business like McDonalds. Pax is the POTENTIAL for a
      business...like a charcoal grille.

      Why was Bud able to buy
      all these stations???
      Because he paid too much for
      them!!!
      Was he smart...maybe...if he bought them to
      sell
      But he says he's NOT selling
      Is he a liar...no I
      don't think so
      Is he a fool...right now...yeah he
      is
      He's feeding his ego...not his stock holders
      He
      wants to own a network...he ALREADY live like a
      sultan
      Being richer won't put him on the cover of Time...being
      the owner of a network will.
      When will he wise
      up....when the money runs out
      Will the money run
      out...yes
      After a full year there aren't 5 pax stations paying
      their own way...There is NO demand for a one
      rating

      71 charcoal grilles isn't a chain of
      resturants...and it's dumb to compare them to McDonalds

    • Female 47 average income
      Why do you think that
      all the newer networks (Fox, UPN, WB) are young
      skewing??? That's where the ad dollars are.

      What was
      one hope for the new Pax shows?? That it would take
      them younger...have they?? NO!!

    • Older women ("50 to dead" is the broadcast
      expression) make up PAX's largest demographic segment. This
      is the group that watches more TV period. It is less
      desirable to advertisers who tend to covet Persons 18-34
      and persons 18-49.

    • FCC hammers out new rulings...2 months
      Pax
      goes bust.................6 more months
      Bidding for
      Pax...............3 more months
      Due Dilligence................3
      more months (it's 71 stations)
      FCC
      approval..................6 more months

      I wish they'd sell TODAY...but
      it's 6 to 9 months fast track
      25 to 35
      dollars...that's what the FCC paper is worth

    • A rating detail I have not seen mentioned....what are the demographics of the PAX audience....income levels, etc.??
      Are they more/less/no difference in appeal to advertisers??

    • Umedium...informative link!!! I am interested in
      Dreyfuss now that I see their interest here. Let's call it
      "Reverse Investing". Catspro, thanks for the breakdown on
      ask/bid, etc. Very informative. The more I find out
      regarding MM, etc, the more I question how "invisible" the
      hand is in our economic model.
      Re: new
      programming...even if the ratings are low, don't we need to take
      into account earlier Sagansky statements saying high
      ratings are not critical?
      The post volume is
      incredible to L-T members!!!

    • TV stations are businesses...that sell
      ADVERTISING. When they sell it's their ability to sell ads
      that sets there value.

      The Pax Network does a
      .7 that's LESS then 1% of the audience. Out of 71
      Pax stations there aren't 5 that are making money (
      actually just 2)

      The NBC affiliate in Sacramento
      that sold for $540M was sold for a very high 18X cash
      flow. That's how stations are sold. That station is
      turning a $30 million profit. It's an NBC affiliate a
      know and valuable name brand. The stations averages a
      11 rating (16X the pax rating)

      Pax is loosing
      about 8 million dollars a month...count the program
      contracts and add another 1 mill...that's minus 9 million
      monthly.

      How much is a business that looses money
      worth...NOTHING. If Pax sells for a 100X cash flow that's NO
      MONEY!

      That leaves selling the stations wholesale for what
      they are broadcast spectrum. In TV you are only as
      good as your shows...the BEST Pax shows only do a 1.

    • First...Last week Pax did a 1.1 rating...do any
      of you know what they did the week before??? I
      do...a .9 that's no change

      This "news" article is
      a PR piece from the Pax HQ in WPB...the new season
      is a disaster...up only slightly from the re-runs
      they were running the week before.

      A 1 in prime
      ISN'T good news. Usually programs premiere bigger than
      they end up doing (people sampling a new show). Bud
      says he only needs a 1 to make money...he's had
      several (but not many) stations doing 1's for
      months...how many of those stations are making money??
      NONE!!!!!

      These stations will HAVE to sell...Pax wil NEVER make
      money. Sale price 25 to 32 dollars per share

    • What is the worst that could happen with PAX?


      1) The GE/NBC talks could fall apart
      completely...
      There are other potential buyers for a cleaner
      deal.

      2) No other buyers show up...
      The stick value of
      PAX covering 70% of U.S. is probably around
      $12.
      PAX will have reduced expenses going forward.
      FCC
      expected to relax rules further.
      Approaching year 2000,
      quadrennial year, elections are all bullish for advertising
      marketplace.

      3) PAX could announce a partial deal with GE/NBC for
      33% of company keeping the dream alive.
      Should
      probably send PAX into the 20's at
      least

      Conclusion: downside $12 short of major market meltdown

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