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Randy Michaels back in the radio biz in Chicago

It's funny...for a long time I've read on this board and others how someday, all the real broadcasters sitting on the beach will come back at fire sale prices and show the dopes running radio how it's really done. Then today we get this news. So you now have Randy Michaels and Larry Wilson back in ownership. Now what?
 
Anybody see how much of Randy's money is actually in the deal? I'm not sure that "ownership" really describes his position. This is a case where Emmis is up against it financially, and has to sell of assets to meet covenants and stay afloat. The particulars on this deal are pretty hazy, so it's hard to tell what Merlin will actually pay for the stations, and what the private equity boys and Randy will actually pay for a controlling interest in Merlin. In fact, Emmis will still own "a significant minority stake".

Bottom line on this is that Emmis can't make those stations pay enough, and Randy thinks that he can. He's convinced several other heavy hitters that he's got a plan. How much skin he has in the game is unknown. What will happen from here on out is also unknown. One thing is for sure, he's approaching it as a multimedia company, not just as a radio company.
 
"Anybody see how much of Randy's money is actually in the deal?

$100 million, according to Inside Radio.

Now that's by no means all of his money, or even a majority of it. But he is putting a significant stack of chips in this game.

The most interesting aspect of this is that he's taking control of New York's WRXP, which has been an underperformer...there are a lot of format niches open even in market #1 and if he clicks there with something new--or a new take on an existing format realm--it can have a big impact across the country.

I wouldn't bet against him.
 
Well, I noticed the deal is for an estimated $110-120M.

http://www.marketwatch.com/story/emmis-announces-agreement-to-sell-controlling-interest-in-stations-to-gtcr-2011-06-21?reflink=MW_news_stmp


GTCR is the money merchant.

http://www.gtcr.com/

Emmis continues to hold a minority position with Merlin Media.

http://www.merlinmediallc.com/

Emmis expects to incur expenses of $10M, some of which is set aside for severance. Compare the impact of that to the "$50 million in synergies" projected by Cumulus in a much larger deal $(2.4B) for more stations and involving far more people who may or may not receive severance.

Michaels is a core broadcaster. He and I are not remotely close, but like many Buffalo broadcasters, "we knew him when." He shared a few thoughts, some laughs and offered his perspective on the business when he was in Buffalo for the BBP awards a few years ago.

Some very talented people will be lining up to work with Michaels because he knows radio inside from the control room to the comptrollers office. He's demanding, mercurial and successful, so it won't be easy. His competitors know he plays hardball.

http://www.merlinmediallc.com/jobs.html

Like half the radio people watching this play out, I'd expect one of the Chicago stations to go talk.

The experts in New York have all kinds of theories about WRXP, a station that just can't get no satisfaction or traction. There could be a format change at WRXP. It could go talk. Randy was instrumental in giving Rush a large playing field. Merlin could lure Rush away from WABC... or just counter program WABC with local NY-NJ-Conn-LI talk talent in the NJ 101 mode.

Michaels also worked with Ed Schultz. It's a stretch, but imagine a hard-swingin' brawl in NYC between Conservative WABC-AM and a full signal FM Progressive that takes no prisoners.

Largely because the experts say there's no significant revenue to be drawn from a Country format, NYC is without a big signal FM Country station. If anybody could give the format wings in Market #1, Michaels is the guy.

Imagine if Country drew listeners way from NY's AC leaders, Lite and Fresh and scored Top 5 in that demo, the way WYRK often scores Top 3 (if not #1) 25-54 Women in Buffalo.

Michaels is enigmatic and has as many detractors as he has supporters. One thing the man is not is boring.
 
Bob1370 said:
"Anybody see how much of Randy's money is actually in the deal?

$100 million, according to Inside Radio.
Click to expand...

Nope. That's how much money Emmis, GTCR, Michaels, and Merlin will have in the deal. GTCR and Michaels are acquiring a controlling interest in Merlin, and Merlin is acquiring a controlling interest in the stations in question. There's no info on how much money Randy actually has on the table. GTCR may be giving him a share, or allowing him to buy in cheap, simply to tap his expertise.

Bob1370 said:
I wouldn't bet against him.
Click to expand...

Me neither. If Randy's anything, it's shrewd.
 
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