Could this effect KROI?

[osr]

From www.radioandrecords.com

Wednesday, March 29, 2006
Radio One Could Sell Some Stations,
Sees Q2 Revenue Improvement


Radio One EVP/CFO Scott Royster said today that the multimedia company targeting African-Americans has begun talks with the banks it does business with in regard to amending the company's leverage covenant, as Radio One will likely divest between $100 million and $200 million worth of its portfolio.

Royster noted that stations to be sold are likely to be those that are not 100% consistent with the company's mission of targeting an African-American audience. Appearing at the Banc of America Securities Media Conference in New York, Royster also noted that Radio One's Q2 revenue looks better than that seen during Q1, although trends are softening as the quarter progresses.

Royster also acknowledged that ad pricing remains sluggish despite lower spot loads, and said the company's expenses will grow faster than inflation as Radio One executes its growth initiatives such as planned expansion into film production and the Internet. Radio One has a majority interest in TV One.


<P ID="signature">______________
You can't kill rock-n-roll, it's here to stay
R.I.P. KEGL-Dallas & KLOL-Houston</P>

 

[Mediafrog]

> as Radio One will
> likely divest between $100 million and $200 million worth of
> its portfolio.

Well, they bought the 92.1 stick for $72.5 million, which would sure clear a significant chunk of that total, assuming they get what they paid for it.

> Royster noted that stations to be sold are likely to be
> those that are not 100% consistent with the company's
> mission of targeting an African-American audience.

Which describes KROI exactly.

My gut feeling is that they'll hang on to KROI--a format flip is still a big possibility, they could and should be doing much better with something other than La Mera Mera. Smaller properties in other markets will probably be the ones to be put on the block. Still, a sale would not really surprise me--perhaps they are having buyers remorse with 92.1 and looking to get out.

 

[Mike_O]

> > as Radio One will
> > likely divest between $100 million and $200 million worth
> of
> > its portfolio.
>
> Well, they bought the 92.1 stick for $72.5 million, which
> would sure clear a significant chunk of that total, assuming
> they get what they paid for it.
>
> > Royster noted that stations to be sold are likely to be
> > those that are not 100% consistent with the company's
> > mission of targeting an African-American audience.
>
> Which describes KROI exactly.
>
> My gut feeling is that they'll hang on to KROI--a format
> flip is still a big possibility, they could and should be
> doing much better with something other than La Mera Mera.
> Smaller properties in other markets will probably be the
> ones to be put on the block. Still, a sale would not really
> surprise me--perhaps they are having buyers remorse with
> 92.1 and looking to get out.
>
I don't understand Radio One not going to Gospel with KROI, and have doubts if they will in the near future. Mediafrog you may have nailed it with buyers remorse and I would not be suprised to see R O sell off KROI if they can recoup their money. Several prospective buyers would be Univision and Cumulus. Both could use a fairly decent signal like KROI or as I have predicted before, it may become the first Vietnamese FM station in metro Houston. The coverage area is almost perfect for a Vietnamese language format. Covers much of the coast and also the two largest Asian population pockets, east of downtown and the Sharptown area. I think if R O can make a small profit on KROI they will sell and concentrate on Majic 102 and The Boxxx.

Mike O

 

[stan]

> I don't understand Radio One not going to Gospel with KROI,
> and have doubts if they will in the near future. Mediafrog
> you may have nailed it with buyers remorse and I would not
> be suprised to see R O sell off KROI if they can recoup
> their money. Several prospective buyers would be Univision
> and Cumulus. Both could use a fairly decent signal like
> KROI or as I have predicted before, it may become the first
> Vietnamese FM station in metro Houston. The coverage area
> is almost perfect for a Vietnamese language format. Covers
> much of the coast and also the two largest Asian population
> pockets, east of downtown and the Sharptown area. I think
> if R O can make a small profit on KROI they will sell and
> concentrate on Majic 102 and The Boxxx.
>
> Mike O


Mike,

Why would Cumulus buy a third station with bad coverage for all of Houston? Would they simulcast on 92.1 AND either 97.5 or 103.7? Would that be a profitable venture to do so?

 

[Mediafrog]

> Why would Cumulus buy a third station with bad coverage for
> all of Houston?

It would actually be a fourth station for Cumulus. Remember KRBE joins the stable under the new partnership soon.

The overall Houston market coverage of 92.1 is reasonably good; actually much better than the Devers area rimshots. And 92.1 doesn't have the co-channel severe tropo interference issues that 97.5 and 103.7 have.

> Would they simulcast on 92.1 AND either 97.5 or 103.7? Would that be a
> profitable venture to do so?

Any ratings increase would probably be small. Both KIOL and KFNC have programming issues that a better/second signal isn't going to help.

 

[Mike_O]

> > Why would Cumulus buy a third station with bad coverage
> for
> > all of Houston?
>
> It would actually be a fourth station for Cumulus. Remember
> KRBE joins the stable under the new partnership soon.
>
> The overall Houston market coverage of 92.1 is reasonably
> good; actually much better than the Devers area rimshots.
> And 92.1 doesn't have the co-channel severe tropo
> interference issues that 97.5 and 103.7 have.
>
> > Would they simulcast on 92.1 AND either 97.5 or 103.7?
> Would that be a
> > profitable venture to do so?
>
> Any ratings increase would probably be small. Both KIOL and
> KFNC have programming issues that a better/second signal
> isn't going to help.
>
Stan, I agree with everything that Mediafrog wrote. You do have a good point that KROI is not going to cover metro Houston like the other commercial stations, but placing KFNC on 92.1 would be a vast improvement over 97.5 which I have a difficult time listening to in the morning in the Galleria area. KIOL needs a major overhaul and until KFNC is more than a part time weekday daytime news station they could have the best signal in the city and probably pull only slightly better ratings. KFNC has great talent at the station, but if you call yourself a News station, people expect NEWS when they tune in, not TALK.

KFNC calls themself "The FM News Channel" not "The FM News occasionally but mostly BS Channel". If KFNC stayed true to the moniker I think 97.5 would really have something good going. The 92.1 signal would help KFNC since 97.5 is the worse signal trying to serve Houston. The streaming audio is great if I am at home, but no use in the truck at this time. Many people do not have internet connections available to them at work, only intranet, so again the streaming audio is of no help. If 92.1 does go on the market at a fair price Cumulus would be wise to buy the station and move KFNC there and I'm not sure how 97.5 does to the north and east. If the signal would complement 92.1 and give KFNC good coverage to the LA stateline and especially along I-10, then simulcast the two signals. If Cumulus could get a good signal on the west side of Houston and make it a tricast they would likely cover nearly as well as 740. Except the only station I can think of is KMKS 102.5 in Bay City that can be upgraded to a C1, but good luck buying KMKS.

Mike O