Audacy and Beasley Trade Stations

[Ryan Williams]

In a surprising move that even the best local handicappers did not call, we have a late-day news of a trade between Audacy and Beasley.

KDWN and the Stratosphere-based translator K268CS (101.5) are headed to Audacy in exchange for KXTE (Alt 107.5). I'm still a little shocked from the story. Why would Audacy give up a very decent full-market FM for a heritage, but fading AM plus translator. I don't have recent billing information, but it sure doesn't seem like a good trade from Audacy's standpoint.

The deal when completed will give Beasley five FMs and Audacy three FMs and three AMs and a translator.

This divestment would give Audacy the ability to acquire two more FMs.

Obviously another deal is coming. But what?

My first thought was the two Univsion stations, but those are currently on their way along with 870 AM to Latino Media Network. The only other owner with just two full FMs is Entravision, but both of those facilities are substantially worse than KXTE.

Beasley And Audacy Swap Stations In Las Vegas - RadioInsight

Beasley Media Group, LLC (Nasdaq: BBGI) (“Beasley” or the “Company”), a multi-platform media company, announced today that it entered into an asset exchange agreement with Audacy, Inc. (NYSE: AUD) whereby Beasley will exchange the radio station 720 AM KDWN-AM and the translator for 101.5 FM for...

radioinsight.com

 

[Ryan Williams]

The deal when completed will give Beasley five FMs and Audacy three FMs and three AMs and a translator.

This divestment would give Audacy the ability to acquire two more FMs.

Obviously another deal is coming. But what?

My first thought was the two Univsion stations, but those are currently on their way along with 870 AM to Latino Media Network. The only other owner with just two full FMs is Entravision, but both of those facilities are substantially worse than KXTE.

This is purely speculation, but what if Univision stations KISF (103.5 FM) and KRGT (99.3) are heading to the Audacy cluster in exchange for some of their "surplus" AMs in other markets... such as WJFK 1580 AM in DC and perhaps others like it.

This would allow Audacy to unload some of their worst AM facilities that have little future in their clusters while expanding an existing cluster and letting Latino build out their "national" programming network footprint with an additional key market or two. Perhaps Latino Media Network is aiming to be less like Univision Radio and more like BIN.

If you look at what LMN is buying from Univision, it's a bunch of dog AMs and then some FM properties in Vegas, Fresno, and the RGV. It doesn't really make a lot of sense to me.

If they were really planning on building local clusters in all of those markets, that would mean competing with the established incumbent brands and signals that are staying with Univision in places like Dallas and Houston. What not just buy all of Univision's radio properties if that was the plan?

If it is not the Univision FMs, then I am not sure what Audacy is making room for. iHeart has three FMs and is not exiting LV. Lotus has three FMs. Entravision has two FMs but both are rimshots with mediocre boosters. Kemp has two FMs but one is terrible and not even a rimshot.

And then there is the one Stolz FM probably on the block.

What a weird development.

 

[Kent]

This is purely speculation, but what if Univision stations KISF (103.5 FM) and KRGT (99.3) are heading to the Audacy cluster in exchange for some of their "surplus" AMs in other markets... such as WJFK 1580 AM in DC and perhaps others like it.

When you consider that Audacy could add another FM without divesting 107.5, the logical conclusion would be that it will be acquiring two stations. There's only one two FM cluster with decent signals in the market. So, your speculation seems possible, if not likely.

And then there is the one Stolz FM probably on the block.

Funny thing is, Beasley sold 104.3 to Stolz when it acquired 105.7 and 107.9. It didn't have to divest 104.3 to get those two stations. Seems like I read that deal was to make the acquisition of the two stations debt neutral. Divest one; get two for the same price. However, as mentioned above, Audacy wouldn't have to divest anything to acquire 104.3. It was already one station below the cap.

 

[MarkW]

My guess is Audacy is getting a little anxious of its net senior leverage ratio headroom as well as its general liquidity position and is doing this deal to add cash to its balance sheet (or to create availability under its revolving credit facility) while avoiding much of a hit to EBITDA.

Audacy can plop its sports betting programming on KDWN if it doesn't already have a local home.

 

[Kent]

My guess is Audacy is getting a little anxious of its net senior leverage ratio headroom as well as its general liquidity position and is doing this deal to add cash to its balance sheet (or to create availability under its revolving credit facility) while avoiding much of a hit to EBITDA.

Audacy can plop its sports betting programming on KDWN if it doesn't already have a local home.

I'm sure Audacy is getting anxious. Losing a billion dollars over a relatively small timeframe would do that to anybody. A swap, however, does nothing to add cash to the balance sheet. Granted, Audacy might get some cash to make the swap even as I'd have to think even a flailing alternative station is worth more than a 100% syndicated AM and FM translator, but it's only going to be a drop in the bucket. Sports gambling focused programming is already being heard on Audacy's 1140. So, this is unlikely a move to add more sports betting to the AM dial.

Another shoe is almost guaranteed to drop. Whether that's Audacy making another deal for a couple more FM's or it selling its properties to two or more separate buyers, something else is likely to happen. I don't know why you'd acquire the AM and translator for KDWN if you're selling out of the market. So, I'm guessing another deal is in the works.

 

[AceBiscuits]

Sports gambling focused programming is already being heard on Audacy's 1140. So, this is unlikely a move to add more sports betting to the AM dial.

My initial line of thinking would be that KDWN (or KXNT) would flip to sports to clear CBS Sports Radio, but they already sort of do that with KXST. They could lure some of the sports teams to a locally based sports station, but that would require quite a serious investment. They could continue to operate KDWN and KXNT as news/talk, but my hunch is that they are going to consolidate on one of them.

I agree that some swaps with LMN could make sense, iHeart also has three stations in the market. There could be a deal in the works to trade some of stations for some Audacy stations in another market.

 

[EricStein]

This is purely speculation, but what if Univision stations KISF (103.5 FM) and KRGT (99.3) are heading to the Audacy cluster in exchange for some of their "surplus" AMs in other markets... such as WJFK 1580 AM in DC and perhaps others like it.

This would allow Audacy to unload some of their worst AM facilities that have little future in their clusters while expanding an existing cluster and letting Latino build out their "national" programming network footprint with an additional key market or two. Perhaps Latino Media Network is aiming to be less like Univision Radio and more like BIN.

If you look at what LMN is buying from Univision, it's a bunch of dog AMs and then some FM properties in Vegas, Fresno, and the RGV. It doesn't really make a lot of sense to me.

If they were really planning on building local clusters in all of those markets, that would mean competing with the established incumbent brands and signals that are staying with Univision in places like Dallas and Houston. What not just buy all of Univision's radio properties if that was the plan?

If it is not the Univision FMs, then I am not sure what Audacy is making room for. iHeart has three FMs and is not exiting LV. Lotus has three FMs. Entravision has two FMs but both are rimshots with mediocre boosters. Kemp has two FMs but one is terrible and not even a rimshot.

And then there is the one Stolz FM probably on the block.

What a weird development.

Stolz is NEVER selling ANYTHING to Audacy again!

 

[Ryan Williams]

Stolz is NEVER selling ANYTHING to Audacy again!

Right. Also, would they ever even entertain doing a deal with him ever again. I'm going to go with no.

 

[Ryan Williams]

My initial line of thinking would be that KDWN (or KXNT) would flip to sports to clear CBS Sports Radio, but they already sort of do that with KXST. They could lure some of the sports teams to a locally based sports station, but that would require quite a serious investment. They could continue to operate KDWN and KXNT as news/talk, but my hunch is that they are going to consolidate on one of them.

You could imagine some fine tuning and some program shifting.... but I would bet on both stations keeping the news/talk format for the foreseeable future. I would imagine KDWN bills pretty good just because it has a lot of history and inertia.

One thing that surprised me after looking through both station's schedules, is how little local programming there actually is.

It would not shock me if the 720/101.5 simulcast is broken at some point either.

 

[Kent]

You could imagine some fine tuning and some program shifting.... but I would bet on both stations keeping the news/talk format for the foreseeable future. I would imagine KDWN bills pretty good just because it has a lot of history and inertia.

I tend to agree with you. I suspect KDWN has a lot of the same problems most talkers have right now, but it's probably not costing much to operate either.

One thing that surprised me after looking through both station's schedules, is how little local programming there actually is.

From what I could tell, there was four hours of local programming every weekday between the two of them.

It would not shock me if the 720/101.5 simulcast is broken at some point either.

101.5 was running an AC format as "Lite 101.5" prior to it becoming a repeater for KDWN. It isn't bound by any restrictions tying it to the AM.

 

[nd2023]

I wish that Beasley gave Jammin 105.7 to Audacy. They compete with Audacy’s Q100.5. Both play a lot of classic hip hop, but Jammin 105.7 leans a bit older with more R&B.
Jammin’ 105.7 used to be rhythmic oldies, similar to Mega 104.3 or Old School 104.7. But lately they’ve morphed into a “throwback hip hop” station to compete with Q100.5.
Maybe if Audacy owned both, 105.7 could sound like it used to years ago. In Phoenix, Sierra H owns rhythmic oldies Mega 104.3 and classic hip hop 101.1 the Bounce. Because they’re co-owned, they don’t share that many songs.

 

[PTBoardOp94]

Stolz is NEVER selling ANYTHING to Audacy again!

Given that Stolz's company is currently in bankruptcy, he wouldn't have much choice if Audacy was willing to make the highest bid. Which I doubt they would...

 

[nd2023]

It would be foolish for Audacy to buy 104.3 from Ed Stolz. After what he did to Entercom in Sacramento for years.

 

[Kent]

UPDATE: Radioinsight is reporting it's a real estate deal. KDWN and 1140 share the same tower site, which Audacy owns and is selling.

 

[AceBiscuits]

UPDATE: Radioinsight is reporting it's a real estate deal. KDWN and 1140 share the same tower site, which Audacy owns and is selling.

Interesting, but it definitely leaves Audacy weaker in the market. Will be interesting to see if Audacy decides to buy some Las Vegas FM's in the future.

 

[boiseengineer]

Spend $$$ to move KXST & KDWN (again)?
No translators.
ROI is probably a big negative.
Turn in the licenses and scrap the towers for a few more bucks.

 

[Kent]

Interesting, but it definitely leaves Audacy weaker in the market. Will be interesting to see if Audacy decides to buy some Las Vegas FM's in the future.

My first thought was, “Apparently, land is now worth more than even a large market FM.“ I know 107.5 in Vegas has had issues since it signed on in the late 80’s, but it would've fetched a lot more than $40 million not terribly long ago.

Spend $$$ to move KXST & KDWN (again)?
No translators.
ROI is probably a big negative.
Turn in the licenses and scrap the towers for a few more bucks.

KDWN has a translator that’s going to Audacy with 720 and is not tied to the AM. So, it could scrap 720, move the programming to an HD2 while continuing to use the translator, and no one would likely miss the AM. KXST isn’t so lucky, though Audacy is running the BetQL programming solely on HD multicast channels and the app in several markets. If 1140 isn’t selling any programming locally, that might be a viable option.

 

[boiseengineer]

KDWN has a translator that’s going to Audacy with 720 and is not tied to the AM. So, it could scrap 720, move the programming to an HD2 while continuing to use the translator, and no one would likely miss the AM. KXST isn’t so lucky, though Audacy is running the BetQL programming solely on HD multicast channels and the app in several markets. If 1140 isn’t selling any programming locally, that might be a viable option.

Unlike AMs that have the translator license tied to the AM "forever". That's why the translator's not listed in the AM license.

 

[CassChopper96]

Why did audacy trade KXTE and not Mix 94.1?

 

[Paul1033]

I think since they are trying to kill off their underperforming "ALT" stations.