Connoisseur Completes Alpha Deal

[TheBigA]

The deal for Connosseur buying Alpha Media has closed. They now have a new logo. Expect to see a lot of changes in management.

Connoisseur Media Completes Alpha Acquisition, Debuts New Look - Radio Ink

Connoisseur Media finalized its Alpha Media acquisition, assuming Alpha’s debt and adding 205 stations to its portfolio.

radioink.com

Connoisseur Media Completes Alpha Media Acquisition, Jumps Into Top 10 U.S. Broadcasters.

Connoisseur Media has completed its acquisition of Alpha Media, a move that instantly propels the company into the top 10 U.S. radio broadcasters by station count and revenue. With FCC

www.insideradio.com

 

[Deleted member 108832]

Wouldn't you know it? The first full day of control and, for the first time in around 8 years, there was an actual warm body cracking a live mic on our local Jack-FM affiliate, KOOI Jacksonville, Texas, outside of the local Friday night Longview Lobo or Sunday afternoon Dallas Cowboy football game broadcasts.

Who'd have thunk it? Someone must've spent a full day knocking all of the cobwebs down from the walls and dusting the place.

 

[phildavis]

Also a live body on Long Island,.

Maybe they are a company that "gets it"..

 

[K.M. Richards]

Maybe they are a company that "gets it"..

They do have a good reputation. This merger could result in a lot of positive changes.

 

[TheBigA]

Maybe they are a company that "gets it"..

They do have a good reputation. This merger could result in a lot of positive changes.

Everybody loved David Field in 2016.

 

[Mark Roberts]

Everybody loved David Field in 2016.

Maybe Warshaw has less stringent lenders.

Moreover, does Connoisseur really want to be in some of the markets that Alpha’s in? For example, Bethany, Missouri? (Been there.) The challenge would be to spin off those stations in really tiny markets at a price that wouldn’t amount to a fire sale. We shall see if Connoisseur has a plan for that.

 

[K.M. Richards]

Everybody loved David Field in 2016.

I am basing my opinion on what my friend Mike McVay has said about Jeff Warshaw. He is someone whose opinions I value.

Your own mileage may vary.

 

[Kent]

Moreover, does Connoisseur really want to be in some of the markets that Alpha’s in? For example, Bethany, Missouri? (Been there.) The challenge would be to spin off those stations in really tiny markets at a price that wouldn’t amount to a fire sale. We shall see if Connoisseur has a plan for that.

I've been told they're still available at the right price, much like they were under Alpha. The key term, of course, is "right price." They're still licenses with no, or very few, tangible assets.

I've been told a former employer of mine is interested in at least one of the ex-Alpha clusters, but whether or not he'll actually get it is hard to say.

 

[TheBigA]

The issue to me is did they fix the problems that caused the company to go bankrupt. This was a company started by Larry Wilson, who also started Citadel. I see a lot of the same black holes in this company that plagued Citadel. Too many small market AMs. My view is that the purchase of Citadel is what drove Cumulus to it's bankruptcy. In essence, it was a second Citadel bankruptcy. They're now starting to deal with some of the deep holes they inherited from Citadel. The question is can Warshaw deal with a lot of the same exact problems at Alpha?

 

[K.M. Richards]

My view is that the purchase of Citadel is what drove Cumulus to it's bankruptcy. In essence, it was a second Citadel bankruptcy.

I had my misgivings about the Citadel/Cumulus merger on several levels, this being just one of them.

Warshaw does appear to have a plan for this ... he had better, given that Connoisseur has just grown exponentially. I would imagine that he has been looking at this intensely while waiting for the deal to consummate, and I will not be surprised to see some less-important clusters spin off.

I'm also interested in seeing what changes Keith Dakin will make in the near future to correct some of the programming issues that plagued Alpha Media.

 

[Mark Roberts]

I've been told they're still available at the right price, much like they were under Alpha. The key term, of course, is "right price." They're still licenses with no, or very few, tangible assets.

In this case, the “right price” is the one that gets that asset sold. Holding out for more in a declining business isn’t going to get the asset (the stations in the cluster) sold.

One possible solution would be to spin off the tiny markets into their own company, with that company taking an opportunistic/sink-or-swim attitude toward its clusters — sell the ones (essentially selling licenses and a book of accounts since the towers were sold off years ago) that have interest and let the rest either stand on their own or be done for.

I've been told a former employer of mine is interested in at least one of the ex-Alpha clusters, but whether or not he'll actually get it is hard to say.

Depending on the cluster, how realistic is that? You and I both know some of these communities with Alpha clusters. The purchase price would have to be very low for there to be any payback.

 

[TheBigA]

I'm also interested in seeing what changes Keith Dakin will make in the near future to correct some of the programming issues that plagued Alpha Media.

The element that's been missing from Connoisseur has been a digital strategy. That is the main thing that has to change as far as content.

 

[RadioGuy1864]

Connoisseur is not a public company, so there is no "meet this quarter's numbers" pressure from the market. That said, they are carrying a significant debt load that needs to be serviced. If they can generate enough cash from spinning off non-core market stations, and improving the cash flow at their larger clusters, they have a chance of surviving. At a certain point, it's just a math problem, if the numbers don't add up, another "Alpha" Bankruptcy could be in their future.

 

[TheBigA]

Connoisseur is not a public company, so there is no "meet this quarter's numbers" pressure from the market. That said, they are carrying a significant debt load that needs to be serviced.

They picked up $115 million of Alpha debt, added to their own. That's a lot of debt that won't be paid down with cash flow. They will need another way to make money, and I don't know what that is. In the past, companies sold stock to raise money to pay down the debt. Obviously that's not a good option now. Audacy made a smart decision by going private. That helped preserve the value of the company for their investors. Perhaps that's Warshaw's approach here as well.

 

[radiofan2023]

From what I've seen on this site and RadioInsight, some AMs that are in towns under 10,000 people have gone off the air in the last year - did Alpha have any AMs in markets that size?

 

[Barry]

Also a live body on Long Island,.

Which station?

 

[Kent]

In this case, the “right price” is the one that gets that asset sold. Holding out for more in a declining business isn’t going to get the asset (the stations in the cluster) sold.

Maybe. We really don’t know enough about Connoisseur's strategy to know exactly what they'll do. I don’t remember the original Connoisseur from the 90’s having this many stations. This is uncharted territory. Alpha very much had the philosophy that it wasn’t willing to go below its number if a cluster was profitable, even if it wasn’t achieving the margins it wanted. With Connoisseur being in charge now, there's no guarantee it will have the same approach as Alpha, but it might.

Depending on the cluster, how realistic is that? You and I both know some of these communities with Alpha clusters. The purchase price would have to be very low for there to be any payback.

It's as realistic as Connosseur being willing to accept his price. He knows the area better than almost anyone else, and he's not going to offer a price that he doesn’t think is sustainable. Plus, that particular cluster would augment a couple of his existing groups. I'm also told he's interested in some of the Cumulus stations that recently signed off. He would seem to still be bullish on radio, at least so long as he can buy it out of his own pocket. That might be stupid. I don’t know, but some of those clusters likely only have value to people operating in or around those areas.

From what I've seen on this site and RadioInsight, some AMs that are in towns under 10,000 people have gone off the air in the last year - did Alpha have any AMs in markets that size?

Alpha had quite-a-few of those, including a couple near you. KMRN 1360 in Cameron and KAAN 870 in Bethany come to mind immediately. I don’t think Cameron has 10,000 people if you count the inmates living there! Alpha managed to sell its stations in Clinton, and the new owners quickly took KDKD 1280 dark. The tower lease was sited as one of the reasons.

 

[radiofan2023]

Alpha had quite-a-few of those, including a couple near you. KMRN 1360 in Cameron and KAAN 870 in Bethany come to mind immediately. I don’t think Cameron has 10,000 people if you count the inmates living there! Alpha managed to sell its stations in Clinton, and the new owners quickly took KDKD 1280 dark. The tower lease was sited as one of the reasons.

Their NW MO stations website shows that KAAN and KMRN both have translators. The signed off AM stations I was thinking of, I think were stations without translators.

 

[Mark Roberts]

Maybe. We really don’t know enough about Connoisseur's strategy to know exactly what they'll do.

That’s a very fair point. It is early days for the expanded Connoisseur.

I don’t remember the original Connoisseur from the 90’s having this many stations. This is uncharted territory. Alpha very much had the philosophy that it wasn’t willing to go below its number if a cluster was profitable, even if it wasn’t achieving the margins it wanted. With Connoisseur being in charge now, there's no guarantee it will have the same approach as Alpha, but it might.

As with any M&A, it will also probably take time for Connoisseur to impose its vision and philosophy on the stations acquired from Alpha. Especially with an M&A of this size and scale, changes can’t be immediate.

Alpha had quite-a-few of those, including a couple near you. KMRN 1360 in Cameron and KAAN 870 in Bethany come to mind immediately. I don’t think Cameron has 10,000 people if you count the inmates living there!

KMRN and KAAN are part of the same cluster which gets them over the (somewhat artificial) 10,000 threshold. I don’t see those AMs as viable long-term, though.

Fun fact: KAAN-FM actually preceded the AM. I’m not sure why Shepherd decided he needed the AM, but that was almost 45 years ago and I guess that’s just what you did then. For many years, the AM and FM simulcasted, which wasn’t a normal Shepherd practice, but that AM was a very limited daytimer.

 

[MarkW]

I had my misgivings about the Citadel/Cumulus merger on several levels, this being just one of them.

Warshaw does appear to have a plan for this ... he had better, given that Connoisseur has just grown exponentially. I would imagine that he has been looking at this intensely while waiting for the deal to consummate, and I will not be surprised to see some less-important clusters spin off.

I'm also interested in seeing what changes Keith Dakin will make in the near future to correct some of the programming issues that plagued Alpha Media.

Their 106.3 WGER in Saginaw, MI made a noticeable programming change (for the better, in my opinion) the Thursday before Labor Day weekend.

I cannot confirm if that significant playlist shift was initiated on the local level or if it was initiated by the new guard at the corporate level.