Offer Memorandum
Purpose
Vernon Van Winkle, President of KPVM Television, Inc. is pursuing the sale of the company as outlined below, based upon best final offers and suitability. The company is securing minimum bids of $1.6 million for the complete sale of all FCC RF Channels, video equipment and business of broadcast television. KPVM-Television Channel 41 and CP 46HD (also seen on the local Cable company CMA on channel 12).
Company
KPVM Television, Inc. Channel 41, Cable 12 serves Pahrump, Nevada with a 1-kilowatt transmitter. Broadcast television advertising and program sponsorships are the main revenue generator for the television station. With quality Neilson rated affiliates and strong local programming Ch. 41 generates income from the community. Ch 41 produces several hours of local programming including Local News, Morning Show, Community View Point, One Mans Faith and Hot Topic PM; along with other local and paid produced programs. Our network affiliation is Ion Media, CNN NewSource and Accu-Weather. KPVM Television, Inc. is also associated with Litton Entertainment, Danny Lipford, Associated TV and NBC/Universal. The station operates out of a “designed for television” 8,000 sqft. building built in 1998 and 2004.
Background
KPVM Television, Inc. Channel 41 was established in 1997 by Vernon Van Winkle. The station started broadcasting from within a garage in 1997 and now encompasses an 8,000sqft building. KPVM Television, Inc. Channel 41 is the premier television station serving Pahrump, Nevada for the last decade.
The Market
There are approximately 42,000 residents in Pahrump, Nevada with a growth rate of 10.2%. Several new and existing builders such as Focus Properties and partners who are scheduled to build 6,400 new homes over the next 5 years, the market is one of the fastest growing rural areas in America according to the Wall Street Journal. Home Depot has just begun building their new store and Wal-Mart has out-grown its
2-year-old Super Store and has purchased land for a MEGA Super Wal-Mart. Many new franchises have
purchased property for expansion in Pahrump.
Opportunity
KPVM Television, Inc. Channel 41 has proven over the last ten years to be “community friendly” and is well established in the market place. Our Clients and government have realized that we are the premiere station servicing the Pahrump area.
KPVM-Television, Inc. is in its tenth year and is established in the Pahrump community. It is a “TURN-KEY” broadcast facility. Pahrump is experiencing continued growth and our current SD channel 41 along with our new high definition channel 46 signals, will soon reach a projected number of up to 100,000 people. The new business that will arrive form Pahrump’s growth will increase the stations profits as it did from 1997 (17,000 pop. and $77,000 in income) to 2006 (38,000 pop. with $607,433 in income) this is a huge increase! The growth over the next five years is expected to reach up to the 100,000 based on statistics from the Town of Pahrump.
Increased Signal Strength and HD signal will produce a high definition signal for the Pahrump viewer:
a. The FCC has granted KPVM Television, Inc. a HIGH Definition CP with 15 kilowatts of power for Channel 46 and has a 3-year development window.
b. CP doesn’t have to be built out until 2011. This gives the buyer two years after full power conversion to build out.
2. New FCC Signal:
a. This CP is already in place for development and can be built at any time until 2011.
b. This HD channel can be used for 4 channels or 1 to deliver additional programming.
Competitive Advantages
KPVM Television, Inc. Channel 41 is a positive pro-growth company. Our competition is less than three years old in the community with no major programming network affiliation. The station has been leased out to three different operators over the last 3 years and has experience a large amount of turnover in personnel. The town’s tower that repeats the Las Vegas network stations has fallen down in a recent windstorm. Pahrump town manager has stated that they will not rebuild, which leaves no quality broadcast signal from top of Mount Potosi. This leaves five major Las Vegas networks with very poor off-air signal throughout the Pahrump Valley, giving the potential Ch 41 buyer a competitive advantage with a clearer signal to service the area. They will also have a complete television facility to create any type of broadcast commercials or shows under one roof. All video and computer equipment is continually serviced for optimum performance.
1. With 10 years serving the community, KPVM is recognized by government offices and business alike as the premier form of communication to the entire community of Pahrump.
a. Model Programs that address mass communication requests during political years.
b. Established and seasoned shows that address everyday needs of the people of Pahrump.
c. Creative staff for ad campaigns that work for the Pahrump market.
d. Nielson recognized and rated programming.
2. Our staff is recognized for their caring contribution to the community:
a. The staff is active in Pahrump Arts Council, Rotary, Chamber of Commerce, Salvation Army and other local organizations that contribute to the Pahrump Valley. These efforts create bonding relationships that produce news and information used for our achievement of reaching KPVM Television, Inc’s. FCC public record file requirement.
3. Television facility is 8,000sqft and was built specifically for television and administrative production. 3,200sqft. of which is included in proposed lease, however there is more space available that may be leased on an as needed basis for any expansion that will come from buyers’ growth.
a. Buyer only needs to lease adequate space for continued operation. 3,200 sqft to 8,000 Sqft. is available at $1.25sqft. Plus CAM.
b. Station is located on prime 2.5-acres on an elevated lot with view of entire valley. This gives a quick reference of any news stories located with visual reference. The station backs up to (BLM) Better Land Management.
c. Station is a tapeless environment once ingested from cameras. Station has 4 edit bays, one live production switcher with 4 cameras in studio. 4 sets and one chroma key wall. Complete florescent lighting grid.
d. Fully automated 24/7.
e. Back up Larcan transmitter.
f. Should buyer wish to purchase real estate and facility they will have first right of refusal.
4. 1,780sqft Corporate home on lot for rent if needed, with 3 car Garage and Swimming pool.
The Management Team
Vernon Van Winkle founded KPVM Television, Inc. in 1997. Since its inception, Vernon Van Winkle has successfully served and developed the company as its CEO. He currently serves as the company’s Chief Engineer and Director of Operations. Vernon Van Winkle will train a successor with all needed information for 2-months after closing of escrow to run the station. Vernon Van Winkle will go on to pursue other business opportunities, but will also remain as owner of building, pahrumpinformation.com (magazine and web site promoting Pahrump) and Rave Digital Audio that is operated from same building.
Ronda Van Winkle (Vernon’s wife) has served as one of the company’s sales representatives. Currently she is in the sales and marketing position to create new sales programs. Ronda is also willing to continue in a transitionary capacity on a part-time basis for 3-months after sale.
Sales Manager
Bill Felder first joined the company in Oct 2006. His experience in Newspaper and magazine sales comes from the Orange County Register and Trader Publications. He is professional and respected as he is well qualified to lead the growth of KPVM Television, Inc. for years to come.
Administrative
Luan Francis has been with KPVM-Television, Inc. since July 2005. She is the head of office administration and accounting. Luan also coordinates the calendar of events for the station and assists the News Department with news stories. She lends herself perfectly to the growth and direction of KPVM-Television, Inc.
Creative Director
Rodney Camacho has been with KPVM Television, Inc. since Oct 2005 and has served as its Art Department Director for over 2 years. His extensive experience of over 15 years in television design and production, both with KPVM-Television, Inc. and other television, advertising/printing companies is a core and valuable asset to KPVM-Television, Inc.
Programming
Elisa Aries (Charlee) has been with KPVM-Television, Inc. since September 2003. Her title is Programming and Traffic Manager. She manages all programming received by satellite, our in-house studio and from our production department. Charlee works very closely with the sales department and our network affiliation for placement of sponsors and commercials. She has been with the company for 5 years; She is willing to stay on in her current capacity.
News Anchor
Selwyn Harris has been with KPVM Television, Inc. since July 2005. Mr. Harris is polished and is LOVED by the community for his professional appearance and Anchor talent of our nightly news. He also reports and edits his own work for the newscast. He is willing to stay on in his current capacity.
Financials
| 02 | 03 | 04 | 05 | 06 | 07 | 08 |
Rev | 264,986.11 | 290,318.51 | 464,016.63 P | 536,688.24 | 607,500 P | 12/4 YTD 466,673.92 | 600,000 Plus P |
GP | NDA | NDA | NDA | NDA | NDA | NDA | TBA |
P = Political year NDA Requested for financials.
Valuation
Utilizing standard and widely accepted valuation formula 3-times gross, broadcast equipment and FCC television licenses KPVM-Television, Inc. has a current valuation of 1.6 million dollars. This valuation method does not account for the future projections above or any “blue sky”.
Funding to Date
Vernon Van Winkle is 100% equity owner of the company and building. Vernon initially invested both cash and equipment assets into the company. The company’s growth has been solely funded and limited to cash from sales. The real estate is 100% paid for from the revenue from the station sales. All equipment is paid for in full and there is no company debt. The buyer will have operation expenses only when escrow closes.
Photographs, tours of station are available by contacting Vernon Van Winkle by personal cell phone email only as listed below. Please do not contact station.
Offer and considerations accepted now through Monday, January 21st 2008.
Vernon Van Winkle
President & CEO
KPVM Television, Inc.
Cell 775-209-3824
Email: videovern@kpvm.tv