Fallout from the CBS Sale in Rochester

[Mark_Giardina]

Just hours after it was announced that Entercom was going to purchase the CBS radio stations in Rochester speculation started as to what two FM's Entercom would put on the market. So far the Zone and Nerve seems to be the two most mentioned stations. The question remains who will buy them? My guess is that some religious organization(s) will swoop in and purchase both stations. Or there is the slight chance that some new group might try for a start-up operation. But I still think my first hunch is correct.

Even the Democrat & Chronicle did a feature story on the radio station sales both on their internet site Monday and in today's business section. In today's article they mention about the possible merging of all stations into one location. Personally I would think they would go to the HSBC building downtown, versus staying on Mill Street. While the Mill Street location isn't bad, I doubt there is room in that building to handle the new stations, plus personnel and especially parking. So my guess is that the Mill Street location will be abandoned and everyone goes to HSBC.

Finally I doubt you will see any changes when it comes to major on-air talent. Entercom isn't about to show Wease, Spezzano, and Tony and Dee the door. They are the breadwinners for that operation. There will be however some changes in the front office and perhaps merging sales people.

So much for my two cents. I'm off to work for the government.

 

[JakeLongwell]

Actually, the Nerve (WNVE) is owned by Clear Channel, so I doubt that station is in play here. I think the speculators might be referring to the Zone, and Fickle, when trying to guess which stations will be spun off.
I must also say that Mark's first prediction would certainly make sense. So many times, whenever one or two stations need to be spun off in a major deal, the companies almost always turn to pay-for-pray broadcasters. Sometimes, they have even been known to DONATE a station to said organizations. While I am not particularly fond of religions broadcasting, I can see why this pracitce is done so often in situations like this one. First, religious broadcasters are for the most part, in a class by themselves. They are non-profit, and non-commercial. Therefore, the "big guys" wouldn't have to worry about the "new kids on the block" stealing advertising dollars away from their respective clusters. Then too, there is the programming aspect of things. Religions broadcasters seldom engage in any secular programming. So by dumping your unwanted stations on, say, American Family Radio (which doesn't as yet have any stations in the region), you are preventing any new owners from mounting any challenge to your existing formats.
I'll close by asking this question. Do we really NEED another satellite fed station pumping out the same tired "we've got all the answers" message in Rochester? I think not.

 

[SirRoxalot]

No Giveaways

With the amount of money that Entercom is paying for the CBS cluster, I doubt that they'll be giving ANYTHING away. Besides, they have to divest 3 FMs according to FCC rules:

Local Radio Ownership Limit - The current rules reflect numerical caps set by Congress in 1996. The restraints are based on a sliding scale that increases with the size of the local market. As a general rule, one entity may own (a) up to five commercial radio stations, not more than three of which are in the same service (i.e., AM or FM), in a market with 14 or fewer radio stations; (b) up to six commercial radio stations, not more than four of which are in the same service, in a market with between 15 and 29 radio stations; (c) up to seven commercial radio stations, not more than four of which are in the same service, in a radio market with between 30 and 44 (inclusive) radio stations; and (d) up to eight commercial radio stations, not more than five of which are in the same service, in a radio market with 45 or more radio stations. The Third Circuit in Prometheus questioned the rationale behind the Commission’s decision to retain these caps. The Further Notice calls for comment on whether the limits should be revised or whether additional evidence exists to further justify retaining them as they are.

As Pickle reported, here are the station lineups:

Entercom-Rochester

WBEE-FM 92.5 FM Country
WBZA-FM 98.9 FM Best of the 70's & 80's
WFKL-FM 93.3 FM Random Radio
WROC-AM 950 AM News/Talk

CBS Radio-Rochester

WRMM-FM AC 101.3
WPXY-FM CHR/Pop 97.9
WCMF-FM Classic Rock 96.5
WZNE-FM Rock/Alternative 94.1

Expect Entercom to sell Fickle, The Zone, and either PXY or Buzz. They'll want to maximize the dollars they get for those three in order to help finance the purchase, so expect new competition in the market. I'm guessing that they'll dump the younger-skewing PXY and consolidate their 25-54 numbers with BEE, Buzz, Warm, and CMF.

I'm sure that there are players who couldn't afford to go after the CBS cluster that will be interested in picking up a three station cluster with at least one decent biller.

 

[Bob1370]

You hear differing interpretations of the rules...some say any two stations in the combined portfolio can be sold, donated or taken dark to come under the legal limit, others say it must be two FMs.

If it's the former, expect the Zone and WROC-AM to get the ax, they're by far the weakest performers. If it's the latter, the two weakest FMs are the Zone and Fickle. It's hard to imagine Entercom dumping any full market coverage Class B FM if it can possibly help it, those babies are gold on the basis of potential even if they may be underperforming at any given moment.

The big question is, who will buy? There are already so many religious stations on the air in the area on both AM and FM that it's hard to imagine how that format could be spread any thinner, and I can't imagine any of the players in that arena spending just to dilute their small (though loyal) audiences even further...no return in it. Right wing talk is also oversaturated already. For those reasons, I don't see either Salem or any of the other religious chains coming into Rochester through purchase of Entercom's castoffs--although Entercom might WANT to sell them to such a company knowing it wouldn't provide any real competition.

The market DOES need a Spanish language station, and maybe an urban gold station. Urban gold is a successful format nearby in Buffalo, and the Latino population in the market has just about reached critical mass to be able to support at least one fulltime radio station catering to it. Who would bring those formats to the market, and be able to make lower power signals into real players? Anyone know if the Langston family of WDKX has some extra cash it might want to spend to expand its holdings?

 

[raymond_shaw]

You hear differing interpretations of the rules...some say any two stations in the combined portfolio can be sold, donated or taken dark to come under the legal limit, others say it must be two FMs.

Thanks for the input Bob. Much appreciated. Sounds like it's the usual government regulation/deregulation crap that nobody can make heads or tails of. Is Scott Fybush out there to give his opinion on this?

The market DOES need a Spanish language station, and maybe an urban gold station.

Definitely there would be a market for Hispanic radio in Rochester, especially on FM. I also think Rochester could use a real Community run non profit station. A voice for the voiceless. In fact, all communities should have this. Thank you NAB lobbyists and Congress for putting the kibosh on much needed LPFM in metro areas.

 

[dampier]

From everything I have seen, Entercom will have to dump two FM stations, and it will be no surprise which ones those represent.

Commercial spectrum in this market is still valuable, so there is no reason a smaller player couldn't come in and pick up the two outlets and run them commercially, especially considering the price may be right because of their signal patterns. I can't imagine a "giveaway," which would be outrageous in any event, considering the fact those limited airwaves are supposed to be serving the public interest, not a tax writeoff giveaway for megacorps. Yeah, how naive of me.

Now a religious outfit could be the highest bidder as well, but considering the excessive bloat of religious pollution on the educational FM band (thank you FCC for your nonsensical 'translator' loopholes) + Crawford on FM and the Catholic radio service on 1460, that's slicing a small audience share so thin you can see through it. Having two new religious broadcasters + the panoply of outlets already on the air would be another indictment of dysfunctional FCC policies. Rochester does not need three or four fulltime religious broadcasters + at least another half dozen plus translators running Family Radio, et al.

The ethnic format approach would be a better possibility. A smaller player might make waves by running a talk format on FM, and that could be accomplished through automation.

 

[SirRoxalot]

Gentlemen, I don't see how Entercom would be allowed to keep 5 FM stations. The rule seems clear, and it appears that they'll have to (eventually) divest 3 FMs. Since the rule quoted was directly from the FCC site, I don't see any room for "interpretation".

Fickle, the Zone, and either Buzz or PXY will be up for grabs. That's an attractive cluster for a mid-sized player.

 

[ThePickleReport]

Anyone know if the Langston family of WDKX has some extra cash it might want to spend to expand its holdings?

Glad I read your post Bob. I was just thinking that as well! WDKX is a major ratings player in the market, they could use at least another station.

 

[ThePickleReport]

I don't see either Salem or any of the other religious chains coming into Rochester through purchase of Entercom's castoffs--although Entercom might WANT to sell them to such a company knowing it wouldn't provide any real competition.

There ought to be a rule that any stations that have to be sold off due to DOJ concerns be placed in a trust and sold INDIVIDUALLY to the highest bidders to create competition. Yeah, I'm dreaming..........

 

[Radknowski]

Gentlemen, I don't see how Entercom would be allowed to keep 5 FM stations. The rule seems clear, and it appears that they'll have to (eventually) divest 3 FMs. Since the rule quoted was directly from the FCC site, I don't see any room for "interpretation". Fickle, the Zone, and either Buzz or PXY will be up for grabs. That's an attractive cluster for a mid-sized player.

It would appear that Rochester had a working template for the limits on stations, that being CBS itself having four FM's, maximum. Clear Channel as well operates four FM's. Reading and interpret the Rules, it appears Entercom will be able to bring in only the number of FM stations that would satisfy the FCC Rules.

It would be reasonable to expect Entercom to maintain four full power FM's, divesting itself of low power Fickle and The Zone. The question is, what full power FM stations will Entercom retain? As Rox suggested, either WPXY or WBZA will get "The Doyle Deal."

In this regard, a commercial buyer such as the oweners of WDKX, Randy Michaels' company, Charles Banta or Backyard Broadcasting might find a cluster comprised of two low power FM's and one full power FM quite attractive. WDKX itself would be well-suited to make swing the deal, having equity and a certain "gravitas" in the Rochester market.

A knowledgeable Buffalo source has suggested two other possibilities:

(1) Entercom may apply for a temporary waiver of the Rules, to allow holding and operating ALL the acquired properties until it can properly divest at market value. That's been done before.

(2) A shell company could be created with the help of certain suburban operators (only to serve as an example, Bob Savage or the Kimble brothers) wherein the three remaining FM's are owned by the shell company while Entercom operates them as an LMA.

There has been the suggestion from two separate industry sources who are knowledgeable and reliable indicating that the CBS Buffalo cluster will be sold to Clear Channel.

This having been said, it would surprise me not the least if Citadel is involved in some unique way.

 

[Mark_Giardina]

Gentlemen, I don't see how Entercom would be allowed to keep 5 FM stations. The rule seems clear, and it appears that they'll have to (eventually) divest 3 FMs. Since the rule quoted was directly from the FCC site, I don't see any room for "interpretation". Fickle, the Zone, and either Buzz or PXY will be up for grabs. That's an attractive cluster for a mid-sized player.

It would appear that Rochester had a working template for the limits on stations, that being CBS itself having four FM's, maximum. Clear Channel as well operates four FM's. Reading and interpret the Rules, it appears Entercom will be able to bring in only the number of FM stations that would satisfy the FCC Rules.

It would be reasonable to expect Entercom to maintain four full power FM's, divesting itself of low power Fickle and The Zone. The question is, what full power FM stations will Entercom retain? As Rox suggested, either WPXY or WBZA will get "The Doyle Deal."

In this regard, a commercial buyer such as the oweners of WDKX, Randy Michaels' company, Charles Banta or Backyard Broadcasting might find a cluster comprised of two low power FM's and one full power FM quite attractive. WDKX itself would be well-suited to make swing the deal, having equity and a certain "gravitas" in the Rochester market.

A knowledgeable Buffalo source has suggested two other possibilities:

(1) Entercom may apply for a temporary waiver of the Rules, to allow holding and operating ALL the acquired properties until it can properly divest at market value. That's been done before.

(2) A shell company could be created with the help of certain suburban operators (only to serve as an example, Bob Savage or the Kimble brothers) wherein the three remaining FM's are owned by the shell company while Entercom operates them as an LMA.

There has been the suggestion from two separate industry sources who are knowledgeable and reliable indicating that the CBS Buffalo cluster will be sold to Clear Channel.

This having been said, it would surprise me not the least if Citadel is involved in some unique way.

First let me apologize for making the mistake in my first posting regarding the station owned by Clear Channel. Stations change call letters and owners more than I change my granddaughter's diapers, and she's only 1 year old, so I forget sometimes who owns what.

Anyways Mike I heard the following regarding the future of two of the FM stations that have to be spun off because of the CBS/Entercom deal.

• A new company could come into the picture and purchase any of the current or future Entercom chain. It doesn’t have to be the two low-power FM stations either, as some people are speculating on here.
• Entercom might either sell or give two FM stations to some religious broadcasters, thus taking a tax break.
• The public radio station in Rochester, WXXI, might try to purchase one of the FM stations. (This rumor I doubt because that would cost millions of dollars and besides WXXI already has a working agreement with the University of Rochester FM radio station; WRUR.

Personally I would love to see Bob Savage get his hands on an FM station. There is man who knows radio and he would program that station to be a major competitor. Maybe if Bob reads this he might consider the idea.

 

[dampier]

• A new company could come into the picture and purchase any of the current or future Entercom chain. It doesn’t have to be the two low-power FM stations either, as some people are speculating on here.
• Entercom might either sell or give two FM stations to some religious broadcasters, thus taking a tax break.
• The public radio station in Rochester, WXXI, might try to purchase one of the FM stations. (This rumor I doubt because that would cost millions of dollars and besides WXXI already has a working agreement with the University of Rochester FM radio station; WRUR.

At the rate things are going, number one could be the most likely scenario. Bite your tongue on idea number two. As far as WXXI goes, if they DONATED one of the FM's to WXXI instead of Family Radio, et al., that would be a public relations coup. If they tried to sell it, we'll be up to our armpits in pledge begathons for years to pay for it!

WXXI-AM heading to FM would be an amazing opportunity, one that WRUR will not offer them. It would solve a number of issues, especially with the night pattern problem. But not at any price.

The universal truth here is that there is more speculation in this thread than on MSNBC over Jon Benet.

 

[JakeLongwell]

Didn't Bob Savage own 93.3 at one time, in its days as classic rock "The River" (WHRR)?

If indeed Entercom decides to sell/donate the stations to a non-profit. I too hope they would look to WXXI. Not only would that give the city a full time NPR news outlet on FM, but it might also mean WRUR would have the option to revert back to a community based freeform station.

I realize with all the different scinerios posted on this thread, this particular one isn't likely to happen. But anything is possible I suppose. Stations in the market have been given away before. When American Radio Systems was being swallowed up by CBS, they almost donated 990 AM to St. John Fisher College, and they probably would have done so had Crawford not stepped in with an offer to purchase the station.
Also, 102.1 in Albion was donated to the CSN network by Clear Channel.

 

[Mark_Giardina]

Didn't Bob Savage own 93.3 at one time, in its days as classic rock "The River" (WHRR)?

If indeed Entercom decides to sell/donate the stations to a non-profit. I too hope they would look to WXXI. Not only would that give the city a full time NPR news outlet on FM, but it might also mean WRUR would have the option to revert back to a community based freeform station.

I realize with all the different scinerios posted on this thread, this particular one isn't likely to happen. But anything is possible I suppose. Stations in the market have been given away before. When American Radio Systems was being swallowed up by CBS, they almost donated 990 AM to St. John Fisher College, and they probably would have done so had Crawford not stepped in with an offer to purchase the station.
Also, 102.1 in Albion was donated to the CSN network by Clear Channel.

Yes Bob did create the River and sold it a few years later.
My take on all of this is before Entercom gives anything away to either public radio or a religious organization they will try to find a cash carrying buyer.

 

[Element9]

Re: Free Fallout from the CBS Sale in Rochester

At the rate things are going, number one could be the most likely scenario. Bite your tongue on idea number two. As far as WXXI goes, if they DONATED one of the FM's to WXXI instead of Family Radio, et al., that would be a public relations coup. If they tried to sell it, we'll be up to our armpits in pledge begathons for years to pay for it!

WXXI-AM heading to FM would be an amazing opportunity, one that WRUR will not offer them. It would solve a number of issues, especially with the night pattern problem. But not at any price.

The universal truth here is that there is more speculation in this thread than on MSNBC over Jon Benet.

Add this morsel, which flies in the face of the "CC will buy Buffalo" conjecture, to this board's menu of speculation:

From Inside Radio, Wednesday, 8-23-06:
Is Regent in line for one of the CBS Radio spin-markets?
That's the popular speculation. We're still waiting for CBS to announce the winners of the auctions for these six markets - Buffalo, Columbus, Fresno, Greensboro/Winston-Salem, K.C. and San Antonio. One dealmaker thinks CBS is favoring public radio companies. But we're aware of at least one private buyer who's pursuing Fresno - where the CBS cluster pulls about 40% of the market revenue.
-9-

 

[radiomike]

Considering what these properties cost, and that Entercom spent 262Million for their buyout to date, I would think they would want to make back some of the purchase price, so it would likley not result in a "giveaway". The price tag would indeed price itself out of a purchase by a non-commercial entitity, even with favorable financing. Even a college that would want to get a station will see this as way too much money. However, being that these are commercial stations, it could be interesting if a college bought one and kept it commercial. This a more of a long shot, but it would be interesting. I would think Regent, Saga, and maybe, dare I say Galaxy looking into it? They all have properties in the state nearby. What about Citadel wanting to hop in? Cumulus is still out there, as well. I would think Family Life would be out priced, and I would think Salem would not want to hop into the Rochester market, with 3 religous stations already, 6 if you count Family Radio, Mars Hill, and Family Life (translators and Canandaigua).

 

[raymond_shaw]

So what about WROC 950? Apparently, Entercom must divest itself of 2 or 3 FMs(depending on what I've read on this board) but can keep it's one AM property in town.

With Entercom soon to be the owner of all the top FM stations in town, will it be worth the trouble to keep this limited signal, low rated AM?

Could they possibly throw this in as an extra to whoever they sell the 2 or 3 FMs they have to spin off?

Could they donate this to a non profit, just to get rid of it and not pay the property taxes and upkeep at the transmitter site?

Just wondering.

 

[Mark_Giardina]

So what about WROC 950? Apparently, Entercom must divest itself of 2 or 3 FMs(depending on what I've read on this board) but can keep it's one AM property in town.

With Entercom soon to be the owner of all the top FM stations in town, will it be worth the trouble to keep this limited signal, low rated AM?

Could they possibly throw this in as an extra to whoever they sell the 2 or 3 FMs they have to spin off?

Could they donate this to a non profit, just to get rid of it and not pay the property taxes and upkeep at the transmitter site?

Just wondering.

My advice is to sell the station to a religious broadcaster. They have the cash to purchase the station and transmitter site.

But then again I doubt Entercom executives would take my advice. ;D

 

[Philip_Airtime]

I don't see Entercom donating one of its properties to WXXI. First, I don't think any broadcast company would simply give away a frequency, despite the tax advantages. It's too valuable! But even if Entercom did, I can't imagine them selling to WXXI. An FM public radio signal would create too much competition, don't you think? I mean, very few people listen to the religious stations, so such a donation would make sense. Religious broadcasters don't offer much competition. Public radio does. So, I'd assume Entercom wouldn't simply give away a frequency, but would make WXXI pay for the right to compete against them.

 

[anoldguy]

First of all, I don't see Entercom donating anything to anyone. There may be some tax breaks involved, but not enough to make up for the actual value of the stations on the open market. Secondly, as I have stated before don't look for a Spanish lanquage station in the market. Any operator, would be looking at the dollars to be earned and I don't see it. The Hispanic population in the market is just not large (and wealthy) enough to support a commercial radio station at this time. Even if it was a Mom & Pop operation the operating costs would just be to high. How much would mortgage payments be? I am sure far higher than they could bill on such a format. WDKX was put on the air a long time ago and I am sure was paid off years ago. Even if it isn't paid off, I bet the mortgage payments are low.
So here's the deal, Entercom will try to hold on to all the stations if they can.
If they can't, maybe they will sell one of the class "B"'s along with both 93.3 & 94.1 as well as 950 just to sweeten the deal and get rid of their less productive units. My guess, in that scenerio, they would keep 98 PXY for the younger demos, and sell WRMM which has a very similar audience as WBEE. Who might buy them?, Citidal, Regent, or even Galaxy or Buckley, among others. Personally, I'd love to see Bob Savage get at least one but I bet his money is tied up in raising the power on his AM. Maybe, if we all got together and formed a new corperation and backed him.......