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Confirmed: Emmis to Sell KXOS-FM

P

pjc1961

What's been rumored about on the L.A. board for a while is now confirmed by Jeff Smulyan, CEO and Chairman Of Emmis in the press release announcing the New York City sale of WRKS-FM's intellectual property to YMF Media's WBLS-FM along with Disney/ESPN's LMA of WRKS FM's frequency (moving ESPN Radio from WEPN AM, which will become ESPN Deportes). This deal reportedly netted Emmis $96 million in cash.

Paragraph from the Emmis press release of 4/26/12:

"I have so many friends on the Kiss FM team and this is an extraordinarily difficult decision for me, however the benefits to the financial health of Emmis as a whole are significant. Coupled with the sale of a controlling interest in three of our radio stations to Merlin Media and the forthcoming sale of KXOS in Los Angeles, we will have one of the healthiest balance sheets in media thereby positioning Emmis for future growth," Smulyan said.

It's been widely reported that Grupo Radio Centro (which has the LMA-to-buy agreement with Emmis) has had high expenses running KXOS and Smulyan "left the door open" to a possible sale of the station in a conference call back in February. One of the suitors could be the Emmis partner Merlin Media (WEMP NYC/WIQI Chicago/WLUP Chicago/WWIQ Philadelphia).
 
If Merlin is the KXOS buyer, and they go all news, could this force CBS to blow up an FM to simulcast with KNX? I'd say it's a definite possibility considering what they did in Chicago, and if so, which FM could it be?
 
calguy said:
If Merlin is the KXOS buyer, and they go all news, could this force CBS to blow up an FM to simulcast with KNX? I'd say it's a definite possibility considering what they did in Chicago, and if so, which FM could it be?
Click to expand...

They won't. 1) Fresh wasn't paying the bills in Chicago. I believe all of CBS LA's stations are making more than enough money. 2) CBS has found out that Merlin's news wasn't the threat they anticipated, which no doubt led them to blowing up Fresh. Now that they know Merlin isn't much of a threat, CBS won't touch a thing.
 
More details about KXOS and its situation in a piece from TheDeal.com about the NYC transaction:

http://www.thedeal.com/content/tmt/emmis-espn-ink-programming-deal.php

This paragraph in particular:

" Radio observers considered the moves consistent with an announcement earlier this month that Emmis had incentivized the designated buyer of its KXOS-FM station in Los Angeles to accelerate that deal's closing. The incentive temporarily reduces the price that Grupo Radio Centro SAB de CV or a designee must pay for KXOS to $85.5 million. GRC entered into a contract three years ago to buy the station on or before 2016 for $110 million. "

In other words, Emmis is pleading: "We'll take 24.5 million less for you to take KXOS off our hands now - we need the cash!"

Meanwhile, Grupo Radio Centro says: "Not so fast - this property is bleeding money in expenditures. Not sure if we want it long term. Hell, even short term." Thus, the Merlin speculation since they're in bed with Emmis to begin with.
 
pjc1961 said:
It's been widely reported that Grupo Radio Centro (which has the LMA-to-buy agreement with Emmis) has had high expenses running KXOS and Smulyan "left the door open" to a possible sale of the station in a conference call back in February. One of the suitors could be the Emmis partner Merlin Media (WEMP NYC/WIQI Chicago/WLUP Chicago/WWIQ Philadelphia).
Click to expand...

GRC has not had "high expenses" in operating the station... in fact, they have operated rather frugally. They do have a high LMA rental expense, but the real issue is that they have not achieved ratings that would produce good revenue. Their 2011 billings were less than the LMA rental, in fact.

Still, they may want to exercise the option they have have. And they have a deal that would preclude anyone else buying until they pull out.
 
So basically, just like its east coast counterpart WQHT, KPWR will also be a standalone property. Its one thing for Emmis to maintain clusters in Austin and Indy but it seems like they wanted to hold on to the flagship rhythmics by getting rid of other stations (including a heritage urban in NYC that is set to fold into its crosstown competition).
 
You know Jack-FM isnt doing so well, and it sure would be nice to see 93.1 once again be KNX-FM and restore at least part of that combo...Of course I would like to see KCBS change calle letters to KNX-TV (and yes I know it was formerly KNXT).
 
600kogo said:
You know Jack-FM isnt doing so well, and it sure would be nice to see 93.1 once again be KNX-FM and restore at least part of that combo...Of course I would like to see KCBS change calle letters to KNX-TV (and yes I know it was formerly KNXT).
Click to expand...

Yeah, maybe call letters no longer matter in the PPM era but it kinda bugs me that the KCBS (radio) calls are split between SF and LA. I think there is more listener awareness of the KCBS calls in SF. So, Jack should give those calls up, hand them to KFRC-FM, and change their own (back) to KNX-FM. Then, CBS would have KCBS AM/FM SF and KNX AM/FM in LA. How logical is that?
 
Last I saw, on these boards, Jack was billing $30 million a year, with much lower expenses than the rest of their cluster. Unless they NEED to move KNX to FM, CBS could less about Jack's 6+ numbers.
 
chrocket87 said:
Last I saw, on these boards, Jack was billing $30 million a year, with much lower expenses than the rest of their cluster.
Click to expand...

Jack's costs are only slightly less than those of other members of the cluster... hardly even close to "much."
 
Too bad SoCal didnt pick it up. They could have bought 93.9 or LMA it and sell 93.5 to a another company later on.
 
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