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Report: NextMedia Buying KEZR, KBAY

BossRadioDJ

BossRadioDJ

From Radio Business Report:

NextMedia catches Viacom cast-offs

A buyer has been found for the pair of San Jose FMs which Viacom/Infinity needed to spin in order to keep its radio/TV San Francisco cluster orderly. NextMedia will spend 80M to enter the market.

###

According to their website, NextMedia "operates 65 stations in 15 rated and suburban markets around the country," with outlets in Delaware, Illinois, Ohio, Oklahoma, Pennsylvania, Michigan, Nevada, North Carolina, South Carolina, Texas and Wisconsin. The acquisition of KEZR and KBAY marks the company's first foray into California.

Question: Will (or should) Infinity move the Mix 106.5 Adult Contemporary format to one of its other Bay Area stations?

DJ
 
> Question: Will (or should) Infinity move the Mix 106.5 Adult
> Contemporary format to one of its other Bay Area stations?

DJ,

I would imagine that any change in format would violate the covenants of the acquisition agreement -- it would be like the buyer not truly getting what they paid for. Unless, of course, the $80 million purchase price factored in an intention by both parties that Infinity would keep the format and move it elsewhere and leave just the "stick" for NextMedia. $80 million, by the way, represents (depending on exactly what you assume about the cash flows on the stations) a bit of a decline in the recent value of large market sticks. Although San Jose is not San Francisco, that's still not a bad deal for two stations in Market #33.
 
seaqkumba wrote:

> I would imagine that any change in format would violate the
> covenants of the acquisition agreement -- it would be like
> the buyer not truly getting what they paid for.


I haven't seen the agreement (nothing has been filed with the FCC yet), but you're right -- if NextMedia wants to keep Mix 106.5 as it is, with the same identifier, music mix and personalities, it will probably be stipulated in the sale agreement. Since they have no other presence here, NextMedia may prefer a turnkey operation where all they have to do is change the owner's name on the company letterhead and let everything continue as it was.

On the other hand, Infinity has a new station to program at 106.9 coming up in a few months...
 
I don't think Infinity will move San Jose personaliities to SF again, none are compelling enough to staff a 106.9 startup. Witness the recent debacle of KBAY/SF. And don't you think the KEZR and KBAY formats are already well-covered in SF?

> Since they have no other presence here, NextMedia
> may prefer a turnkey operation where all they have to do is
> change the owner's name on the company letterhead and let
> everything continue as it was.
>
> On the other hand, Infinity has a new station to program at
> 106.9 coming up in a few months...
>
 
The Official Press Release

Here's the official press release announcing the sale. The most interesting point is that NextMedia will begin operating the stations under an LMA beginning "on or before" August 1:


NextMedia to Acquire Two San Jose Radio Stations from Infinity Broadcasting

- Acquisition gives NextMedia entry into the nation's 10th largest city -

DENVER, July 18 -- NextMedia Group, Inc. announced today it has signed a definitive agreement to acquire KEZR-FM and KBAY-FM, serving the San Jose, CA market from the Infinity Broadcasting unit of Viacom Inc. Financial terms were not disclosed. The acquisition is expected to close in early 2006, pending FCC approval. NextMedia expects to begin operating the stations under a local marketing agreement on or before August 1, 2005, subject to regulatory approval.

Steven Dinetz, President and CEO of NextMedia, commented, "This is an ideal transaction that will enable us to enter our first top-ten metropolitan market. The capital of Silicon Valley, San Jose is a rapidly growing city with exceptional demographics, including a population with the highest median household income in the nation. KEZR and KBAY are two well-established music stations serving the 18 to 54 year-old demographic, which are audiences that advertisers covet. The addition of these stations will significantly expand our growth outlook today and over the long-term. We look forward to working with the local team that Infinity has assembled to integrate these stations into our portfolio and further increase the value of these assets."

"This transaction is a welcome deal for both parties," said Joel Hollander, Chairman and Chief Executive Officer, Infinity. "NextMedia, a rapidly growing and well respected media company, expands their operations into California's third largest city, and Infinity is able to strengthen its operations in the San Francisco market with the pending acquisition of KEAR- FM. The employees at KEZR and KBAY have built a solid foundation on which to build for the future, and I thank them for their contributions and dedication."

About NextMedia

NextMedia Operating, Inc. is a diversified out-of-home media company headquartered in Denver, Colorado. NextMedia, through its subsidiaries and affiliates, owns and operates 66 stations in 16 markets throughout the United States and more than 6,200 bulletin and poster displays. Additionally, NextMedia owns advertising displays in more than 3,000 retail locations across the United States. Investors in NextMedia's ultimate parent entity, NextMedia Investors, LLC, include Tailwind Capital Partners, Alta Communications, Weston Presidio Capital and Goldman Sachs Capital Partners, as well as senior management. NextMedia was founded by veteran media executives Carl E. Hirsch, Executive Chairman, and Steven Dinetz, President and CEO.

About Infinity

Infinity is one of the largest major-market radio operators in the United States, with stations covering the news, modern rock, oldies, country, FM talk, classic rock and urban formats, among others. A division of Viacom Inc (NYSE: VIA and VIA.B), Infinity operates 180 radio stations, the majority of which are in the nation's top 50 markets.
 
The latest. John Leathers is the new GM of the combo. Someone said he was with KSJO at some point.
 
Re: John Leathers New KEZR/KBAY GM

Slavegirl wrote:

> The latest. John Leathers is the new GM of the combo.
> Someone said he was with KSJO at some point.


Has he already started, or is NextMedia bringing him in?
 
Re: John Leathers New KEZR/KBAY GM

> Slavegirl wrote:
>
> > The latest. John Leathers is the new GM of the combo.
> > Someone said he was with KSJO at some point.
>
>
> Has he already started, or is NextMedia bringing him in?
>
I was told he was at the staff meeting yesterday to make the announcement...my informant thinks NM will take over operations next week. We shall see.
Anyone know John Leathers?
 
Re: John Leathers New KEZR/KBAY GM

> > Slavegirl wrote:
> >
> > > The latest. John Leathers is the new GM of the combo.
> > > Someone said he was with KSJO at some point.
> >
> >
> > Has he already started, or is NextMedia bringing him in?
> >
> I was told he was at the staff meeting yesterday to make the
> announcement...my informant thinks NM will take over
> operations next week. We shall see.
> Anyone know John Leathers?
>

Leathers was at KYLD for years.
 
Re: John Leathers New KEZR/KBAY GM

> > Leathers was at KYLD for years.
>
> He was GSM at KDFC until yesterday.
>
yeah..i used to work with him at KYLD for a long time, but after he left I lost track of where he landed. Good luck to him, he was a great guy!
 
Re: The Big Question is......

> Will that format wheel be spinning, and if so, where will it
> land?
>

We shall see. After numerous discussions, I'm finding NM is a group of very experienced radio guys. My 2 cents: They're more likely to fix the product than to start from scratch. Well, maybe. ;) hehehehe

It's all speculation at this point. If there was a hole in the format wheel... what NON ethnic format would it be? I'm dying my hair nappy brown and puttin on my disco shoes..for some jammin oldies... Or perhaps another country station? I just bought some boots and a hat and a Dodge Pickup. Oh, but wait how 'bout some old fashion head banging rock. Where is that bong? No, never mind.

If you had a station here, what would ya do?

slave
 
Re: The Big Question is......

> > Will that format wheel be spinning, and if so, where will
> it
> > land?
> >
>
> We shall see. After numerous discussions, I'm finding NM is
> a group of very experienced radio guys. My 2 cents: They're
> more likely to fix the product than to start from scratch.
> Well, maybe. ;) hehehehe
>
> It's all speculation at this point. If there was a hole in
> the format wheel... what NON ethnic format would it be? I'm
> dying my hair nappy brown and puttin on my disco shoes..for
> some jammin oldies... Or perhaps another country station?
> I just bought some boots and a hat and a Dodge Pickup. Oh,
> but wait how 'bout some old fashion head banging rock.
> Where is that bong? No, never mind.
>
> If you had a station here, what would ya do?
>
> slave


Look for both stations to remain with their present formats.
 
Re: John Leathers New KEZR/KBAY GM

> > > Leathers was at KYLD for years.
> >
> > He was GSM at KDFC until yesterday.
> >
> yeah..i used to work with him at KYLD for a long time, but
> after he left I lost track of where he landed. Good luck to
> him, he was a great guy!

If Mr. Leathers is smart--and I would think he is--he keeps his resume updated..because working for Skip and the NextMedia nimrods is an experience he'll look back on with much to regret..

NextMedia is a company where GMs and GSMs are disposable commodities..screaming matches via the Denver Speakerphone system are commonplace..

NextMedia is a company 254 million dollars in debt as of this writing..why they want to go into a market like San Jose is a total mystery, given that what they were trying to do before this purchase was succeed in smaller suburban markets..

Whether or not this is a trend, and they start selling off some those same suburban properties remains to be seen..

While formats may not change, cultures in these two stations are in for a rude awakening..
>
 
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