Turned Up High

For those lucky U.S. entrepreneurs who are tuned into the radio business, the show has rarely been livelier or the volume higher. The U.S. has more radios than people--214 million--and the number is expanding by well over 10% a year. These figures make sweet music not only for the nation's radio manufacturers, but also for its 3,000 station owners, whose investments are increasing in value faster than the blue chips. Last week, in one of the largest deals in the industry's 44-year history, Manhattan's Capital Cities Broadcasting Corp. paid $15 million to Detroit's Goodwill Stations for WJR Radio in Detroit (current value: $8,000,000) and WSAZ Radio-TV in Charleston-Huntington, W. Va. (value: $7,000,000).

In Every Room. Radio's renaissance, after a slump during the 1950s, is due largely to the boom in small transistor models, which accounted for two-thirds of 1963's sales of 24 million sets. House wives plant radios in almost every room, listen to them an average of three hours a day; teen-agers tote the transistors in their pockets. The rise of suburban-and long-distance auto-commuting--as well as the increase in the number of cars--has lifted the total of car radios from 9,000,000 in 1946 to 50 million today. The number of radio stations has grown even more remarkably--from 960 in 1945 to today's 5,243. But that is the practical limit: the Federal Communications Commission has given out almost all the available frequencies in prime markets.

One result is that any businessman who owns a station can play it for high profits. St. Louis Broadcaster Bruce Barrington bought WEW for $50,000 in 1955, sold it to Franklin Broadcasting for $450,000 in 1961; Capital Cities Broadcasting recently paid $5,000,000 for New Jersey's WPAT, which had changed hands for $300,000 in 1954, and Westinghouse Broadcasting put up $10 million for New York City's WINS, which had brought only $425,000 in 1952. Says a top staffer: "Radio stations are the ideal small business. They can be picked up for very little cash-down. They cost little to stay on the air, have few failures and are easy to unload."

No Taxes. Tempted by soaring prices, about one quarter of the owners sell out every year. Buyers put down only 10% to 25% --most of it borrowed from bankers, who give high ratings to radio investments. The FCC reckons that two-thirds of the owners pay practically no taxes, thanks to depreciation rules that permit writeoffs over an average of eight years. The men who make the rules are quick to take advantage of them. Edmund C. Bunker, president of the Radio Advertising Bureau, estimates that one-third of the members of Congress have interests in broadcasting.

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