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Susquehanna sells radio properties to Cumulus

B

bierkenstock

Guest
Reuters reports:
<blockquote>Susquehanna agrees to sell radio, cable units-WSJ
NEW YORK, Oct 31 (Reuters) - Susquehanna Media Co., the nation's largest closely held radio operator by revenue, agreed to sell its radio assets to a group led by Cumulus Media Inc for $1.2 billion, the Wall Street Journal reported on Monday, citing people familiar with the matter.

Susquehanna also agreed to sell its cable assets to Comcast Corp. for just over $750 million, the paper said, citing a person familiar with the deal.

The group buying the radio stations, called Cumulus Media Partners, is backed in four equal parts by Cumulus and private-equity firms Bain Capital, Blackstone Group and Thomas H. Lee Partners, according to the people familiar with the matter.

If various performance targets are met, Cumulus could later boost its stake in the group, the paper reported.

The radio deal could signal a rise in merger activity in that sector, potentially jump-starting stock prices, the paper said. One prize many radio companies have their eyes on is Walt Disney's radio assets, including ABC Radio.

Cumulus, which owns more than 300 stations mostly in smaller and medium markets, would have stakes in stations in several big cities such as San Francisco and Dallas when the transaction is completed. Susquehanna's 33 stations posted revenue last year of $231.1 million, the paper said. ... </blockquote>
http://today.reuters.com/investing/..._01_N31628353_RTRIDST_0_MEDIA-SUSQUEHANNA.XML
 
The two companies compliment each other nicely. It looks like it won't be necessary for Cumulus to divest a single station in order to comply with ownership caps. Rather unusual in a merget this size, and testament to why the companies are a good fit.

After the merger is complete, it looks like Cumulus will have 343 stations, meaning it will remain the #2 group by number of stations. However, total combined revenue looks to be in the neighborhood of $515M, making it the #3 group by revenue, up from #9. Even though Susquehanna only has 34 stations, their revenues are only $50M/year short of Cumulus' $285M.
 
What about Kansas City? That would leave Cumulus with 94.9, 95.7, 96.5, 101.1, 105.1, 107.3, 107.7 (Forthcoming Move-In), 710, & 1660 AM. 7FMs & 2 AMs. Will they be able to keep that many sticks?


> The two companies compliment each other nicely. It looks
> like it won't be necessary for Cumulus to divest a single
> station in order to comply with ownership caps. Rather
> unusual in a merget this size, and testament to why the
> companies are a good fit.
>
> After the merger is complete, it looks like Cumulus will
> have 343 stations, meaning it will remain the #2 group by
> number of stations. However, total combined revenue looks to
> be in the neighborhood of $515M, making it the #3 group by
> revenue, up from #9. Even though Susquehanna only has 34
> stations, their revenues are only $50M/year short of
> Cumulus' $285M.
>
 
> What about Kansas City? That would leave Cumulus with 94.9,
> 95.7, 96.5, 101.1, 105.1, 107.3, 107.7 (Forthcoming
> Move-In), 710, & 1660 AM. 7FMs & 2 AMs. Will they be able to
> keep that many sticks?
>
>

96.5 and 1660 are Entercom stations.

It'll be 6 FM (counting 107.7 if it ever moves) and 1 AM, and they'll probably cram it all into the Mission Bank building.

The biggie, though, is the Chiefs Radio Network. The Chiefs still have a couple of years left on their contract with KCFX, and that is a big, big property the other companies would love to have.<P ID="signature">______________
"Your solution is both fair and democratic ... and I want no part of it."

http://kcradio.tripod.com
http://zerwekh.hypermart.net</P>
 
> 96.5 and 1660 are Entercom stations.


That's correct...although I do believe they'd be okay with 7 too. At least I think so. Actually, I believe KC is the only market where both Susquehanna and Cumulus own stations.
 
> That's correct...although I do believe they'd be okay with 7
> too. At least I think so. Actually, I believe KC is the only
> market where both Susquehanna and Cumulus own stations.

Houston, too, though it's nowhere near the concentration in Kansas City. Susquehanna has 104.1 KRBE while Cumulus has 103.7 KIOL and 97.5 KFNC, both move-ins.
 
> Houston, too, though it's nowhere near the concentration in
> Kansas City. Susquehanna has 104.1 KRBE while Cumulus has
> 103.7 KIOL and 97.5 KFNC, both move-ins.


OOps, I missed that one. I should be ashamed since KRBE is one of my favorite Houston stations.

According to my handy-dandy copy of "Who Owns What", it looks like Cumulus also has KSTB(FM), for a grand total of four.
 
> What about Kansas City? That would leave Cumulus with 94.9,
> 95.7, 96.5, 101.1, 105.1, 107.3, 107.7 (Forthcoming
> Move-In), 710, & 1660 AM. 7FMs & 2 AMs. Will they be able to
> keep that many sticks?

TheRob is correct that 96.5 and 1660 are Entercom stations. I believe you can have 5 FM's and 3 AM's in Kansas City. The way I'm hearing it, 107.7 will likely remain a Topeka station now that this deal has happened. From what I was told, Cumulus would have been able to get it on-air almost six months ago but held off once it heard Sasquatch might be going up for sale. If Cumulus decides to go ahead and build it, one station will have to go.

It's also going to be interesting to see what happens next. My experience with Cumulus was that it operated on a centralized programming model with a large number of programming decisions coming out of Atlanta. Whether they'll keep Jack FM and some of the other Susquehanna formats will be interesting to watch. Susquehanna's programming model, possibly excluding Jack, is very much the opposite of the Cumulus model.
 
> According to my handy-dandy copy of "Who Owns What", it
> looks like Cumulus also has KSTB(FM), for a grand total of
> four.

I believe you're correct, though I hear KSTB doesn't really cover much of anything!
 
> I believe you're correct, though I hear KSTB doesn't really
> cover much of anything!


It looks like KSTB's Transmitter is out on an island just north of Galveston. Being a Class-A, it doesn't reach any of the population of Houston. My guess is that Cumulus picked it up in hopes of upgrading it eventually. That, or it was co-owned with a bigger stick when they started acquiring their Houston stations. I'm honestly not sure what the history is.

Here's the contour map if you are interested:

http://www.fcc.gov/fcc-bin/FMTV-service-area?x=FM617767.html
 
> My experience with Cumulus was that it operated on a
> centralized programming model with a large number of
> programming decisions coming out of Atlanta.


That's exactly what I hear from folks who've worked there. I have some good friends who are disgusted with the thought of "Cumulus having more stations to ruin". Just what I hear...I have no personal experience with them myself.
 
> It looks like KSTB's Transmitter is out on an island just
> north of Galveston. Being a Class-A, it doesn't reach any of
> the population of Houston. My guess is that Cumulus picked
> it up in hopes of upgrading it eventually. That, or it was
> co-owned with a bigger stick when they started acquiring
> their Houston stations. I'm honestly not sure what the
> history is.

I remember hearing about it a little bit. Let's see how good my memory is. Cumulus wanted to find a way to keep KAYD on-air since it was moving 97.5 into Houston. It tried to buy KTFA 92.5, but Clear Channel beat them to the punch. So, it settled for KLOI 101.7 Silsbee, which became KAYD. The problem? 101.7 had a TERRIBLE signal to say the least. So, Cumulus acquired KSTB 101.5 and castrated it to upgrade KAYD's signal.

Someone told me KSTB's citygrade signal contour now doesn't even cover 2,000 people. It looks like the secondary contour does a little better, though. KSTB may be simulcasting KAYD.
 
> I remember hearing about it a little bit. Let's see how
> good my memory is. Cumulus wanted to find a way to keep
> KAYD on-air since it was moving 97.5 into Houston. It tried
> to buy KTFA 92.5, but Clear Channel beat them to the punch.
> So, it settled for KLOI 101.7 Silsbee, which became KAYD.
> The problem? 101.7 had a TERRIBLE signal to say the least.
> So, Cumulus acquired KSTB 101.5 and castrated it to upgrade
> KAYD's signal.
>
> Someone told me KSTB's citygrade signal contour now doesn't
> even cover 2,000 people. It looks like the secondary
> contour does a little better, though. KSTB may be
> simulcasting KAYD.


AAH, so instead of buying it to upgrade, they bought it in order to upgrade another signal. That makes sense. I would ask why they didn't spin it after they neutered it...but I'm pretty sure nobody would want it!

Actually, looking at it's contours, I'm not even sure it counts againt them in the Houston Metro. Is the county it's licensed to a part of the Arbitron metro definition?
 
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