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SparkNet
Friday, May 23, 2014 Volume 3   |   Issue 102
 
A radio mystery
MusicMaster
South Central?So South Central’s not going to SummitMedia – but it’s still on the block.

And it may have a buyer. The bread crumbs may well lead back to Larry Wilson at L & L Broadcasting. But as always with Larry, it comes down to price, and specifically the multiple. Larry doesn’t like paying over six times cash flow, and as much as he’d like to scoop up South Central, he’s a disciplined buyer. Presumably SummitMedia topped his offer earlier this year, and that’s why Summit was sitting on a deal worth about $74 million - until it was (unofficially) declared stillborn. That may have led the Engelbrecht family of Evansville back to L & L. Wilson is an indefatigable shopper. And since he’s got his own jet (one of the rewards of selling Citadel), he can be anywhere, any time, to discuss a deal. It seems that price/cash flow multiple tops geography, when it comes to Larry’s criteria. Maybe the ranch-owner will finally lasso the South Central clusters in Nashville, Knoxville and Evansville. And thanks to another development, we now know his jet has recently landed near Fredericksburg, Virginia. L & L was an under-bidder for the highly attractive Free Lance-Star radio group that includes full Class B country WFLS at 93.3. On the eve of the Memorial Day weekend, a holiday that began just after the Civil War, let’s travel to a famous Civil War battle site, between DC and Richmond, shall we?

The Fredericksburg Free Lance-Star stations and newspaper are sold to creditor Sandton Capital.

Last year, New York-based Sandton bought the debt of the Rowe family-owned Free Lance-Star Publishing from BB&T, and that left it in a commanding position at last week’s Chapter 11 bankruptcy auction. The court allowed it to credit-bid $13.9 million, and reporter Bill Freehling at the Free Lance-Star paper says it also pledged to “put up $16.3 million in cash to close the deal.” The total comes to $30.2 million, $200,000 more than runner-up New Media Investment Group. But no doubt Sandton would’ve kept going, continually topping New Media, and New Media probably just decided to bail. Sandton Capital had wanted to claim a larger amount than $13.9 million in a credit bid, and it’s still appealing the conditions placed on it. Nonetheless, it’s the winner and if the deal announced in court yesterday is confirmed, Sandton will have its hands on both a strong newspaper/digital franchise and a prize radio group. The stations are country WFLS (93.3), news/talk WNTX at 1350, rhythmic “99.3 the Vibe” WVBX Spotsylvania and classic rock “96.9 the Rock” WWUZ. Bill Freehling says Colgate Enterprises actually was the high bidder for the radio group, but that became meaningless once Sandton made its radio-plus-newspaper bid of $30.2 million. That trumped the separate bids for the radio and newspaper assets.

Sandton could potentially keep the radio and newspaper assets together.

One experienced dealmaker says “the question now is how they handle the newspaper-radio cross-ownership issue at the FCC. But it may not be that big a deal because of the way the Commission treats creditors.” Namely, it says they’re attributable in the existing licensee – so the transfer may not even look to the agency like a change of control, which would trigger the cross-ownership review. The dealmaker says “that could very well be a non-issue,” and Sandton would be allowed to keep the cross-media combo together.

SNL Kagan
Warren BuffettThis would’ve been a golden opportunity for Warren Buffett to enter the radio business, but he passed.

Buffett-led Berkshire Hathaway was actually the winning bidder for the newspaper part of Free Lance-Star Publishing. But just as with the unsuccessful radio bid by Colgate Enterprises, it doesn’t matter. Warren Buffett’s gone from being a total skeptic about newspapers to an avid acquirer. Though he’s got stringent criteria, like avoiding big-city papers and focusing on smaller franchise-holders like the Fredericksburg Free Lance-Star. If he’d been at all interested in the stations, this could’ve been Berkshire Hathaway’s introduction to radio, and what a blessing that would be for radio, to have Buffett’s imprimatur. But it didn’t happen. Radio dealmakers tell this NOW Newsletter they do expect Sandton to eventually look for a buyer for the radio group. Sandton could run their own auction, and there could be more than one buyer. Allen Shaw’s Centennial is the other player in Fredericksburg, in the shadow of revenue leader WFLS (93.3). Perhaps he can peel off one or more signals. And don’t count out Larry Wilson. The Chapter 11 sale of Free Lance-Star is the closing act of its 130-year ownership by the Rowe family. They took out a big loan to build a larger printing facility, just before the economy tanked. They never missed an interest payment, but fell into technical default. BB&T sold the loan at a discount to Sandton – and it was Hello, Chapter 11 bankruptcy protection (reorganization). Other bidders for all or part of the assets were Halifax Media Group, Ogden Publications, Monticello Media and Unison, in addition to the aforementioned L & L, Colgate Enterprises, Berkshire Hathaway, New Media Investment Group and of course Sandton.

Meridian ChilesKentucky ad agency Meridian-Chiles files for Chapter 7 bankruptcy (liquidation).

Among the creditors – Clear Channel, which is owed $103,756. Lynn Martin’s LM Communications, owed nearly $14,000. And Cumulus, owed $6,531. Meridian-Chiles bypassed Chapter 11 (work-it-out under court protection, maybe reorganize) and went directly to Chapter 7. That means a sale of the assets. And one problem at a business like the Lexington-based Meridian Chiles advertising agency is that there just aren’t many hard assets. Business Lexington writer Susan Baniak reports the doors closing at Meridian-Chiles, “once one of Lexington’s largest advertising agencies.” The filing lists $5,179,960 in liabilities against just $676,324 in assets. The agency owes unsecured creditor Central Bank & Trust $2,527,298 on a loan. In addition to the bad debts at the radio groups mentioned above, the agency goes out owing WKYT television $262,528, IMG College (for University of Kentucky sports rights) $252,259, WLEX-TV $224,749, and Time Warner Cable Media $175,191. Also Hometown Radio Network of Danville, potentially out $9,418. The agency was begun in 1988 by Larry Chiles and veteran Lexington broadcaster Jim Jordan. Chiles bought Jordan out in 2006 and merged with Meridian Communications in 2012. Chiles lists his own unreimbursed business expenses at more than $32,000 – and he made a $312,647 shareholder loan to the agency.

The Reynolds Group
“You’re probably a nut job” – a 12-minute bit about transgender people costs a morning show their jobs.

Riffing on Rochester’s new benefit policy for city employees, the “Buzz” morning show of Kimberly & Beck played Aerosmith’s “Dude Looks Like A Lady” and made fun of a protesting caller who didn’t like the direction of the bit. Time Warner Cable News has one particular quote from Kimberly – “The services that will be paid for under the new coverage: gender assignment surgery, psychological counseling, because you’re probably a nut job to begin with, that’s my opinion, hormone therapy [and] cosmetic and reconstructive surgery.” That 12 minutes provoked an immediate backlash. TWC says “more than 4,500 people signed an online petition calling on Kimberly and Beck to be taken off the air” – and that’s a lot of people for a station to offend. Entercom market manager Sue Munn apologizes for “hateful comments against the transgender community that do not represent our station [rock “98.9 the Buzz” WBZA] or our company.” Kimberly didn’t help by tweeting out this message – “Freedom of speech includes the freedom to offend others. You aren’t granted a right to not be offended in this life #getoverit #ROC.” You could argue that the Buzz missed a chance to do some education, for the jocks and the community. Gay Alliance executive director Scott Fearing says he’d “be glad to offer them what assistance I could in helping to understand the issues more completely.” But Entercom pushed the exit button, and for now “The Breakfast Buzz” is all music.

Latest TV-group rankings show Sinclair up to #3, growing past Gannett.

The Fox station group is #1 at estimated 2013 revenue of $1,671,250,000 and CBS is #2 at $1.5 billion. But Baltimore-based consolidator Sinclair has jumped up to #3 thanks to a BIA/Kelsey-estimated $1,344,700,000, per the latest annual ranking from TVNewsCheck. Gannett, which has also been aggressively snapping up stations, ranks #4 at $1.3 billion. It’s up from #6 on last year’s list. #5 this time is Comcast/NBCUniversal. Then Tribune and (dropping from #4) ABC/Disney at #7. Next you’ve got Media General, Hearst (which still has radio stations in Baltimore, though they’re not in this reckoning) and Univision. One menacing Sword of Damocles hanging over many of these groups and their empire-building plans is whether they can consummate all their announced deals. That’s especially true for Sinclair and its $985 million planned acquisition of Allbritton. Sinclair has said that it’s made the necessary adjustments in spins to satisfy the FCC and expects to close in third quarter (May 17 NOW). Still, TVNewsCheck calls that one of TV’s “deals in limbo.” Another one is Nexstar’s $270 million acquisition of Communications Corp. of America – which has been hanging at the FCC for a year now. TV station ownership is changing in front of our eyes, and you can read the TVNewsCheck survey of the terrain here.

Iggy AzaleaWho will sing the “Summer Song of 2014”?

Sean Ross has been handicapping the sweepstakes long enough to make it a pop-culture holiday tradition. (Christmas has the TV Yule log, Summer has Ross On Radio and the Summer Song.) So as you fire up the grill or clean out the pool (or better yet, visit friends who’ve already done both those things), here’s what you need to know about the songs you’ll hear on the patio. Sean says “of the current contenders, I’m inclined toward ‘Fancy’ [by Iggy Azalea], just because it feels fresher...it’s the poppiest distillation to date of the ‘Pong’-flavored hits that have ruled the R&B charts for the past few months.” Just what makes a Summer Song, or more to the point, The Summer Song? Partly, it’s the song you hear just about everywhere, in unexpected places, and the song that has sheer staying power. The competition has grown to the point where Ross says “labels have geared more of their release schedule...to the point where Q1 is no longer as exciting for new music.” Sean evaluates Summer Song contenders from Ariana Grande (featuring Iggy Azalea), an act named “Magic!”, Chromeo (“Jealous”), Usher (“Good Kisser”) and more. Though he’s not sure about the legs for the superstar combo of Michael Jackson and Justin Timberlake on “Love Never Felt So Good.” On the alternative/adult alternative side, there’s a candidate from the Kongos. Bone up on the Summer Songs and be an expert, with Ross On Radio here.

Benztown
Formats & Branding

AMP 92.3Yep, CBS goes “Amp” in New York City, re-branding the former “92.3 Now” WNOW-FM, and doing a talent-scrub. But the format’s the same, CHR, and the target’s the same, Clear Channel’s dominant “Z100” WHTZ. The rumored sign-change to “92.3 Amp Radio” occurred yesterday at 2pm under the guidance of new programmer Rick Thomas. The RAMP Newsletter reports the casualties from the former NOW airstaff – morning host Ty Bentli, his “temporary co-host Rosie Noesi,” morning show executive producer Jason Griffin and assistant producer Bryan Carstensen. Yesterday you read here that PM driver Zann and night host Eutopia were gone. Bentli was the eventual morning show successor to Nick Cannon, when the over-committed and health-challenged Cannon left in the Spring of 2012. As for today - RAMP is hearing that part-time personality Niko has middays, at least for now, and that Toro stays for evenings. CBS Radio does Amp-branded top 40 stations in L.A. (KAMP/97.1), Boston (WODS/103.3) and Detroit (WDZH/98.7). See the New York plug-in of Amp here.

Holiday weekends always feature some format changes, and in Richmond, the stunting’s underway at 100.9. We knew (May 8 NOW) that SummitMedia was demoting the CHR “Hot” format from full-power WHTI Lakeside (100.9) to an HD Radio-fed translator at 106.1 owned by Clark Parrish’s Radio Assist Ministry. That’s W291CL, and it’s now the new storefront for CHR “Hot.” That leaves 100.9, a full-power Class B1, stunting. Website for Summit’s just-moved “Hot 106.1” is here.

Just in time for Summer on “the Vinyuhd,” MVYRadio is back on the FM dial. It took $600,000 in fundraising and the chance to buy the Class A TV license in Edgartown, Massachusetts, but the dedicated band signed on there at 4pm Wednesday. After years of what amounted to philanthropy by Joe Gallagher’s Aritaur Communications, the original WMVY Tisbury at 92.7 was sold to Boston University. MVYRadio took refuge online, but Gallagher, speaking for the Board of the Friends group, says “the return to the Island airwaves has been the primary goal” of the group, and they succeeded. So the eclectic programming “delivered by real DJs from a small house at the end of a dirt road on Martha's Vineyard” is available several places – online at MVYRadio, on a translator at 96.5 around Newport (hitchhiking on the HD2 signal of Rhode Island Public Radio’s WRNI-FM/102.7) and now on the very lowest part of the FM band (TV audio) at 88.7. P.J. Finn is the PD/music director. Public Media Capital facilitated the purchase of 88.7 (November 7 NOW Newsletter).

Kelly Music Research
On The Block

CBCSan Diego’s 1240 sells to Crawford Broadcasting for $1.5 million, in a rare sale by Arthur Liu of Multicultural Broadcasting. (Though he is selling his New York-market WNSW Newark/1430 to lay-Catholic Starboard Media Foundation for $10.1 million.) Back in 2003, Liu agreed to LMA (with an option to buy) San Diego’s then-KSON/1240 from Jefferson-Pilot for $4,850,000 less the LMA fees. Eventually, there were many LMA fees at $100,000 per month, because the purchase wasn't consummated until 2009. Though it’s possible that because of the severe storm damage in late 2004 and then more tower damage several years later, Liu wasn’t paying the full amount every month. The station’s now called KNSN and is currently running a brokered Spanish Christian teaching format named “Radio Catolica.” This was Multicultural’s only signal in San Diego, and it will be Christian broadcaster Don Crawford’s entrée to the market. KNSN’s licensed for 550 watts, day and night, with good ground conductivity that helps it cover the market. Broker – Michael Bergner.

Transitions

Tom Atkins signs up with Saga as its group-wide Director of Engineering. He’ll be moving from Buffalo to Saga’s HQ in Grosse Pointe Farms, Michigan. In Buffalo, Atkins was director of engineering for Entercom, and also Senior Corporate Vice President/DOE for the now-sold Backyard Broadcasting group. Probably an important part of his resume for radio/TV owner Saga Communications is that Atkins was also an engineer at Buffalo’s WKBW-TV. Atkins begins with Saga on June 9.

Kevin Musselman moves from South Bend, Indiana to Ft. Wayne, to take up the Director of Sales gig for the new Ft. Wayne cluster that CEO Ron Stone is assembling for Adams Radio Group. Adams is buying the clusters of both Summit City Radio and Oasis (with some dispositions and swaps). And we also learn from the news about Musselman that Adams expects to close both Ft. Wayne deals on June 2. Musselman was a GSM and general manager for Federated Media for five years, and before that worked on the agency side of the advertising business.

Jerry Butler has worked in programming and management, most recently as Director of Programming at the University of Florida’s Division of Multimedia Properties – which might sound a bit academic. But it’s not, since Florida runs commercial radio stations like country “103.7 The Gator” WRUF-FM in Gainesville, as well as low power TV WRUF-LD, also a commercial operation. Jerry previously managed for Townsquare Media, Cumulus and Williams Broadcasting – and he brings all that to new employer MusicMaster, as its newest Music Scheduling Consultant. MusicMaster’s Joe Knapp says with a growing business, he faced “the wonderful problem of being understaffed” - and Jerry Butler starts June 5, to fix that.

Money Pit
You Can't Make This Up

What's all that noise? NOW Reader Alan Kilgore, now the Chief Engineer at WVRM in Suring, Wisconsin (102.7), says "Back in the '70s, two school best-friends moved back home to York, Alabama to start WYLS. I was only a high school kid at the time. The station owners were both hams but Charlie was more of the announcer-sales type and ran the morning drive show while Barney was the engineer who did late-night maintenance. One morning Charlie kept getting calls from listeners wanting to know what all the construction noise was about. So Charlie started to occasionally mention on-air that the hammers and saws in the background were from a contractor expanding the size of the control room. I found out what really happened after I visited the station and asked to see the ‘addition.’ At first, Charlie didn't know what callers were talking about since the on-air speakers, headphones and processor meters did not indicate the reported construction noises. He finally used a table-top radio with low volume to discover what happened when he keyed the mic. Barney had installed a hidden endless tape loop deck, controlled by the microphone relay, with the audio feeding the AM transmitter input. Barney had also re-wired the control-room monitors to play the processor audio instead of the air signal. After Charlie had figured out what was going on, he continued playing along with the joke for the rest of his air shift." Want to share you’re your own true story? Email “You Can’t Make This Up” – Tom@RTK-Media.com.

Memorial DayMemorial Day began immediately after the Civil War as “Decoration Day,” when people would visit local cemeteries to decorate the graves of those who had died in the bloodiest American war. There’s a story about why it occurs in late May – because this was supposedly a time when flowers all over the country would be in bloom. (You didn’t have to buy your flowers at the supermarket or gas station.) These days, we remember those who served in of all the wars fought on America’s behalf. Congress officially made Memorial Day a national holiday in 1971, which is when it was fixed as final Monday in May. (That's when the nation was being torn apart by the Vietnam War. The graphic you see here is of the Vietnam Veterans Memorial in Washington.) More about Memorial Day here. And if you wore the uniform or otherwise represented your country – thanks.

See you back Tuesday morning. That’s Tuesday morning, May 27, following the three-day Memorial Day holiday weekend. From RTK Media (Robert Unmacht, Tom Taylor, Kristy Scott), we wish you a pleasant and safe weekend. As always, thanks for including us in your work day. News tips, comments and good ideas always welcome to Tom@RTK-Media.com. Tom

Cornerstone
AUCTION BY COURT APPOINTED AUCTIONEER – MEDIA SERVICES GROUP

KXEG-AM & KXXT-AM, Phoenix, AZ / WLNO-AM, New Orleans, LA / WDRJ-AM, Detroit, MI

By order of the United States Bankruptcy Court for the District of Colorado, Media Services Group has been retained to sell the assets of the foregoing radio stations currently owned and operated by Communicom Corp. of America, LLC, et al. Any party wishing to purchase the Debtors’ assets must submit a bid to be received by 11:00 a.m. Prevailing Mountain Time on May 30, 2014 in accordance with all provisions of the Procedures Order. If multiple bids are received an auction sale will take place at the office of Kutner Brinen Garber, P.C., 1660 Lincoln St., Suite 1850, Denver, CO 80264 at 11:00 a.m. on May 30, 2014.

Contact Media Services Group for additional information:

Robert J. Maccini / Stephan C. Sloan
Media Services Group
402 Angell Street, Providence, RI 02903
Phone: 401-454-3130
e-mail: communicom@mediaservicesgroup.com

 

RTK Media, Inc.

 
 
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