Allocation of four community radio broadcasting licences for ... - ACMA

hearing, SYN FM emphasised that it does not intend to sell airtime as a commodity,
rather community groups that are granted airtime must represent the station’s
community interest. It also pointed out that the sale costs are not mandatory.
SEIMA’s application indicates that it will be substantially reliant on funding from
ATSIC and Aboriginal Affairs Victoria, which is expected to make up 92%, 85%
and 76% of total income in its first three years of operation. At the licence allocation
hearing, SEIMA pointed out that it has partnerships with leading funding agencies
including ATSIC, through the Tumbukka Regional Council, and Aboriginal Affairs
Victoria, which have both indicated a willingness to provide funding.
Based on SEIMA’s past funding experience, and an in-principle commitment from
ATSIC and Aboriginal Affairs Victoria to provide future funding for its service, the
ABA accepts that SEIMA will have access to the funds necessary to operate its
proposed service.
In its application, Laugh Radio estimates its income in its first three years of
operation at $840,000, $984,000, $1,019,000 respectively for both the AM and FM
licences, with the dominant source of income being sponsorship announcements
comprising an average of 96% of the total income. The other sources of income are
subscriptions (2%), sales (1%) and promotions/fundraisers (0.5%).
However, at the licence allocation hearing and in its closing submission, Laugh
Radio indicated that the 96% for sponsorship income was incorrect. It referred to
financial statements of its two test broadcasts in 2000 which indicate that income
earned from sponsorship and subscriptions amounted to $3,000 to $4,000 per week
respectively ($156,000 to $208,000 per year). Laugh Radio then pointed out that a
permanent operation would result in subscription income being approximately half
the amount of sponsorship income, however did not provide revised estimates.
Laugh Radio estimates operating costs of $360,000 in its first year rising to $423,100
and $425,100 in years two and three for the FM licence. However, the ABA notes
that the technical operating costs do not include costs for the purchase or rental of
transmission equipment for the FM service. Consequently, the operating costs for the
FM service will increase substantially with the inclusion of these additional costs.
Laugh Radio indicates in its application that if operating costs exceed its revenue, it
will consider reducing paid staff involvement in its first three years of operation
($153,600, $207,600 and $207,600), and would rely on a working overdraft. On the
basis of this information, the ABA considers that Laugh Radio has the financial
capacity to provide the FM service.
In regard to the AM service, Laugh Radio estimates its technical operating costs at
$88,000 per year. The total operating costs are estimated at $299,100. Despite the
reduction in estimated income, it appears that Laugh Radio has the financial capacity
to operate the AM service.
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