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TUESDAY, OCTOBER 13, 2015
Radio M&A Hit $422.1 Million in Q3. Radio station merger and acquisition deals rang up the register to the tune of $422.1 million during the third quarter, according to new data from SNL Kagan. While the dollars weren’t at the same level as 2013 and 2014’s billion-dollar quarters, the number of station transactions is on the upswing as the M&A action shifts to small and medium markets. Larry Wilson’s Alpha Media kept its dealmaking hot streak alive in Q3. Alpha’s $264 million acquisition of 116 stations from Dean Goodman’s Digity Media was the quarter’s top-dollar deal. SNL Kagan estimates the purchase translates to year-forward seller’s cash flow multiples of 6.8x for the FM and 6.3x for the AM stations. (Alpha also had the second quarter’s biggest transaction, shelling out $38.25 million for 34 stations from Morris Communications.) Entercom’s swap of four Denver properties for Bonneville classic rocker “The Sound” KSWD, Los Angeles (100.3) was the third-quarter’s second-largest radio deal. SNL Kagan estimates deal values of $25 million for KSWD and $20 million for the four Entercom stations. There were two other deals in the $20-million range in Q3. First, the radio portion of Gray Television’s $442.5 million deal to buy all of the radio and television assets of Schurz Communications, for which SNL Kagan allocated $22.0 million. And Educational Media Foundation’s $21.7 million acquisition of four Florida stations from non-commercial American Public Media Group. Total broadcast station M&A volume reached $3.04 billion in the third quarter, with the lion’s share due to heightened consolidation in the TV arena, where deals worth $2.61 billion hit the books. The total more than doubled the amount registered the previous three quarters. Year-to-date, at the end of September, radio registered a total of $663.4 million while TV deal announcements hit $2.75 billion.
Sales o’ Plenty Continue In Smaller M&A Market. With fewer big-ticket transactions, the dollar volume of radio dealmaking slowed dramatically in the third quarter. But individual station sales are as strong as ever as the M&A activity has migrated outside of the major markets. Radio station sales have been ramping up all year long. Not counting construction permits and partner buyouts, there were 77 announced sales of full-power radio stations in the first quarter, 177 in the second quarter and 250 in the third, according to data from SNL Kagan. Sales of translators and low-power FMs are also on the upswing, from 43 in Q1 to 37 in Q2 to 70 in Q3. “Individual station sales are as strong as ever,” says broker Glenn Serafin, director of Serafin Bros. and president of the National Association of Media Brokers. “This is because the prices are low and the deals can be acquired with cash on hand or financed by the seller. People who could never afford to own a station now can afford one.” Increasingly the action is outside the major markets. To wit, six of the top 10 largest radio deals year-to-date were done by Alpha Media, which has emerged as a powerful small- and medium-market consolidator. “The middle and smaller markets will have more activity because that’s where it’s needed the most,” says Chris Rowe, managing director at FourBridges Capital Advisors. Investors are looking for cash-flowing properties in rated markets where there is an opportunity for growth, he says. More To Come—Serafin handicaps the coming M&A opportunities at InsideRadio.com.
In Latest M&A Trend, ‘Family’ Matters For Company. When Petrus Holding Company made a substantial investment in Connoisseur Media in July, the news garnered headlines in part due to the family name behind the investment firm. Petrus is run by the family of Ross Perot, Jr., son of the former presidential candidate and businessman with an estimated net worth of $4.1 billion. But the investment may be more notable as part of a growing radio trend, the rise of so-called “family offices.” In the deals, investment companies operate for the benefit of one family and its close allies. Among them are Michael and Greg Frischling’s Steel City Media. The family-owned, second- generation, Pittsburgh-based operator marked its 30th anniversary last year with a $105.5 million acquisition of Wilks Broadcasting’s Kansas City cluster. “There are more of these out there than people realize,” says broker Glenn Serafin. “What I hear from most radio
[email protected] | 800.275.2840 PG 1 NEWS insideradio.com TUESDAY, OCTOBER 13, 2015 broadcasters is that they want to be better, not necessarily bigger.” Chris Rowe, managing director at FourBridges Capital Advisors, also anticipates more family-based radio dealmaking. “A lot of the mom and pops will transition into larger regional broadcasters,” he predicts. As Baby Boomer-aged independent operators retire, “some of these mom and pops will be looking for their option to sell,” Rowe says. “And while there aren’t a lot of buyers in small markets, there are pockets of opportunity.” Rowe also anticipates more private equity-backed radio companies, such as Community Broadcasters’ $2.5 million deal to buy 12 radio stations, 10 FM translators and three TV station construction permits from Miller Communications in South Carolina. Northwood Ventures, a Long Island, NY- based venture capital firm, provided the financing. ‘Attractive Investment Opportunity’—Broker Glenn Serafin breaks down the investment power of ‘the original wireless medium’ at InsideRadio.com.
Digital + Radio Ads Help Keep Brands In Local Mix. Advertisers looking to connect with consumers on the local level would be wise to combine digital and traditional advertising, according to a new report on local advertising by the Interactive Advertising Bureau. And broadcast radio is a key piece in a mix that is set to bring in $139.4 billion in total local U.S. ad revenue this year. Overall, radio, including broadcast and online, will claim about $15.5 billion in local ad revenue in 2015. Broadcast radio dominates the radio category, with 10.3% of total local ad spend, compared to 0.8% for online radio, which includes stations’ digital assets and pureplay streaming services. Radio, the IAB says, “Remains a part of the advertising mix for national and local companies, but over-the-air advertising revenue growth remains slow, while online is showing strength.” TV stations, meanwhile, will earn 13.8% of the total ad expenditures, with print newspapers taking 11.5%. On the digital side, online and interactive ads command 11.5% of spending, while mobile represents 4.8%. Notably, the largest take for a single media category belongs to direct mail, which commands 26.9% of local media ad revenue. The IAB expects local advertising to rise to $145.4 billion in 2016 and hit $157.7 billion in 2019. The bureau also expects digital media to grow at a rapid clip, up from 26.2% of all local ad spend in 2015 to 28% next year and 35.4% by 2019. Within the digital space, the IAB expects mobile, video and social to emerge as the big growth areas. Digital radio, for one, is forecast to grow slightly to 0.9% of all local ad revenue in 2016 and 1.1% in 2019. Sizing Things Up—Which groups of marketers dominated local ad spending in 2015? Go to InsideRadio.com.
TuneIn Scores Total NFL Premium Package. Beefing up its fledgling subscription-based service, TuneIn has announced a multi- year partnership with the NFL that will bring live play-by-play coverage of all games to TuneIn Premium subscribers. The new NFL pact includes audio feeds for every preseason, regular season and postseason game, including the Super Bowl, and comprises play-by-play feeds for all 32 NFL teams, with both home and away feeds, national radio broadcasts and Spanish-language broadcasts. The Premium package’s exclusive NFL channel also features audio from select NFL Media programming, including shows “NFL Total Access,” “Around the NFL” and “NFL HQ,” as well as NFL Media podcasts “Move the Sticks” and the “Dave Dameshek Football Program.” In November, TuneIn will add a seven-hours-long Sunday broadcast to the channel, with live analysis, stats and drop-ins of local radio coverage for Sunday games airing in-progress. The alliance makes TuneIn Premium a more attractive year-round proposition by adding the NFL to the $8-per-month package that launched in August with Major League Baseball and Barclays Premier League soccer play-by-play coverage, alongside its 600 Premium-level commercial-free music channels and 40,000 audiobooks. In all, the online radio aggregator provides 100,000 free streaming U.S radio stations and 5.7 million on-demand programs and podcasts. TuneIn Premium is capitalizing on the fact that two of its most streamed free stations are ESPN Radio and CBS Radio’s “The Fan” WFAN, New York. CEO John Donham explained to USA Today in August that its Premium sports content is designed to offer a low-cost alternative to fans who would otherwise pay $20 a month for SiriusXM Radio’s All Access package and another $4 for the streaming add-on. Making the Right Play—NFL and TuneIn execs on why the deal makes sense for both companies, at InsideRadio.com. iHeart Plays Favorites With Users. Today’s eclectic music tastes can find hip-hop beats riding shotgun with sensitive singer- songwriters in music lovers’ personal collections. Responding to diverse consumer tastes, iHeartRadio has introduced a My Favorites Radio feature to its custom radio service. Drawing on both the webcaster’s algorithm and human curation, the genre-mixing feature gives users their own personalized radio station by pulling together the songs and artists they have favorited in previous iHeartRadio
[email protected] | 800.275.2840 PG 2 NEWS insideradio.com TUESDAY, OCTOBER 13, 2015 listening sessions. Available for free to registered users, the My Favorites channel can be named by the user and sent to friends and fans via social media, email and text. The channel is designed to get more personalized as listeners use the service and favorite and thumb-up different stations, songs and artists. To keep things fresh, iHeart says My Favorites Radio will add bonus tracks into the mix over time to promote music discovery. The feature also allows users to remove songs from their channel. To up the personalization quotient for users, Owen Grover, iHeartRadio’s senior VP and general manager, says the company put together a team of data scientists to sift and sort through the reams of listening data its collects. “We’ve been doing this now for four years, and we have an extraordinary amount of actionable data,” Grover told Engadget. “We felt that the combo of listener’s data and the expertise from our leading programmers was really the special sauce for us.” iHeartRadio surpassed 75 million registered users in the third quarter, a 35% increase over the same period in 2014.
DraftKings, FanDuel Fallout Deepens. Bets may be off for the fantasy football industry—a fast-growing ad category for radio and other media—as lawmakers continue to contemplate whether the business constitutes an illegal form of gambling. Odds for a good outcome grew longer on Friday when gaming attorney Daniel Wallach announced that a federal grand jury in Tampa is investigating whether fantasy sports companies are violating a law originally enacted to target gambling ventures that enrich mafia families. A story Friday in the Washington Post outlined a feud between fantasy football leaders DraftKings and FanDuel revolving around “allegations that an employee profited off insider data.” The New York Times reported last week that an employee of DraftKings used insider information to place a bet on FanDuel and won $350,000. According to The Post report, “A scandal-fueled crisis of confidence among fans, swelling resistance from lawmakers and fresh doubts from even some of its top allies have given the fantasy sites their biggest reality check yet. The controversy now threatens to undermine an industry that exploded over the last year to become one of the nation’s most unavoidable forces in advertising.” Sen. Rob Bradley, a North Florida Republican and lead negotiator on gambling issues in the Florida Senate, said DraftKings and FanDuel “are promoting a product that looks a lot like sports betting,” according to the Tampa Bay Times. According to TV commercial analytics company iSpot.tv, DraftKings and FanDuel have been among the top 10 national advertisers over the past 30 days. Both spent more money and aired more commercials than Ford, Chevrolet and McDonald’s. Despite the controversy, ESPN, which had banned segments on the companies in the wake of the allegations, resumed them last Friday. As Inside Radio previously reported, DraftKings spent $4.5 million on radio ads in 2014 while FanDuel allocated $5.2 million, according to Kantar Media.
Competitive Info: More TV Ad Clutter Means Nets Are Off-Message. TV viewers who feel they’re seeing more commercials than ever before should rest assured that it isn’t their imagination. TV networks are in fact squeezing more commercial breaks into every hour, with commercial time on broadcast and cable networks at an all-time high in Q2 2015, and up significantly from a year ago, according to new analysis from Kantar Media and Media Life. As more ad money heads toward digital and away from traditional media, with viewers lured away by other media choices, TV networks are offsetting losses by increasing their commercial load. Minutes of paid ads on cable networks increased 4.6% in Q2, compared to a year before, and broadcast networks upped their ad load 2.8% in the same period, according to Kantar data. While the increase may help TV networks shore up total ad dollars, it runs counter to what advertisers say they want to accomplish—to showcase their brands in a less cluttered media landscape. Increasingly, marketers say they want their brands to stand out with consumers. But overall, Kantar said two-thirds of networks it tracked increased their ad time year-over-year, and five networks aired more than 20 minutes of commercials per hour (including network promos). The results can be off-putting to viewers while weakening advertiser messaging, Kantar notes. “For the advertiser, the impact of greater clutter is obvious— more noise, more messages and more people are out there, so potentially the effect of your message gets diluted,” Jon Swallen, Kantar’s chief research officer told Media Life. And, as networks increase their commercial load, frustrated viewers may turn off their TVs, Swallen added. “I can’t help but think that some of that migration of audience from TV to other video alternatives is exacerbated and encouraged by a less enjoyable viewing environment,” he said. “And commercial clutter plays into that.”
NAB Asks FCC To Slow TWC Merger Deal. The FCC should hold off on its review of the proposed merger between Charter Communications, Time Warner Cable and Bright House Networks until it completes the long-delayed 2010 and 2014 quadrennial
[email protected] | 800.275.2840 PG 3 NEWS insideradio.com TUESDAY, OCTOBER 13, 2015 reviews of broadcast ownership rules, the NAB said in a petition filed with the Commission on Monday. And if the FCC fails to reform its broadcast ownership rules to better reflect current competitive realities, then the FCC should deny the proposed merger, the petition says. Although the request was triggered by the latest cable TV mega-merger, the NAB is asking the FCC to update its review of all broadcast ownership rules, including those that govern radio station ownership. “The FCC has repeatedly failed its congressional mandate to review and update broadcast ownership rules while, on the other hand, approving massive consolidation amongst pay-TV providers,” NAB president-CEO Gordon Smith said in a news release. Under the Telecom Act of 1996, the FCC is obligated to complete a review of its ownership rules every four years, and repeal or modify those rules that are no longer necessary in the public interest as the result of competition. The commission failed to complete its 2010 quadrennial review on time and announced it was combining that review with its 2014 quadrennial review, which the FCC has scheduled to complete in 2016. The consolidation of the pay-TV industry has put TV stations at a competitive disadvantage and outdated ownership rules have prevented broadcasters from achieving the economies of scale and scope that multichannel video programming distributors enjoy, the NAB petition says.
WXPN Extends Jersey Footprint With WNTI Buy. University of Pennsylvania-owned WXPN, Philadelphia (88.5) is expanding its broadcast footprint into northwestern New Jersey and northeastern Pennsylvania with the purchase of WNTI, Hackettstown, NJ (91.9) from Centenary College. The influential non-commercial adult alternative station’s programming will simulcast on WNTI starting at noon on Thursday. The deal calls for WXPN to pay $1.25 million in cash for the station and provide $500,000 in underwriting value to Centenary College over 10 years. WXPN general manager Roger LaMay said the station wasn’t in the acquisition market, but was approached about WNTI, calling his station “the best option to preserve WNTI’s long tradition of musical discovery,” in a news release. The move continues WXPN’s presence in Pennsylvania’s Lehigh Valley, which began via a translator at 104.9. The addition of WNTI, a 6,000-watt Class BI, opens the station up to the area between the Allentown, PA and New York City metros. WXPN also broadcasts on translators in Worton, MD (90.5); Lancaster/York, PA (88.7); and Harrisburg, PA (99.7). Along with extoling his station’s commitment to local artists and events, LeMay said he expects the move will, in the long term, “strengthen WXPN’s financial sustainability.” WNTI abruptly shut down operations last Tuesday after announcing on Twitter that it had sold its license. The loss triggered an outcry on social media for a station that had been on the air for over 50 years. Dr. Barbara-Jayne Lewthwaite, president of Centenary College, says the school will continue to operate its own online station at WNTI.org, “to enhance our curriculum and involve students and community volunteers in programming.” In addition, Centenary students will be given opportunities to intern at WXPN at the University of Pennsylvania. Centenary College was represented by Patrick Communications.
In Detroit, Re-Upped Red Wings, Tigers Deals. CBS Radio’s “97.1 The Ticket” WXYT-FM, Detroit has re-upped play-by-play rights for both the Detroit Tigers and Detroit Red Wings, while adding new sports marketing and entertainment partnerships with the CBS Motor City cluster. The agreement, which runs through at least 2020, keeps Dan Dickerson calling Tigers game action and hosting the MLB team’s pre- and postgame shows and off-season show “Hot Stove.” Ken Kal will continue to call Red Wings games and host the weekly in-season “Inside Hockeytown” show. The renewal is the latest example of how sports teams are successfully negotiating for additional programming and promotional firepower from their media partners. CBS’ “Newsradio 950” WWJ will add three one-hour sports shows—“Inside The Arena” to keep fans up-to-date on a new Detroit Red Wings hockey stadium; “Inside The Ballpark,” which includes news and information about the Detroit Tigers upcoming season; and “Inside District Detroit,” focusing on expansion of “The District.” On the entertainment site, CBS Radio’s Detroit cluster—including country WYCD (99.5), classic hits WOMC (104.3) and CHR “98.7 Amp Radio” WDZH—will partner with the sports teams’ owner Olympia Entertainment for select concert and entertainment events. WYCD’s citywide “Downtown Hoedown” is currently produced with Olympia and the “Opening Day Block Party” at Grand Circus Park in Detroit is produced by WXYT-FM in alliance with the Tigers. Both events have drawn more than 100,000 people to Detroit annually, according to CBS. In a memo to staffers, Debbie Kenyon, CBS Radio senior VP & Detroit market manager, wrote, “Our cluster of stations [is] an important part of our growth strategy in 2016 and beyond. I’m particularly looking forward to expanding our presence in The District Detroit and creating destination experiences for the local community.” Taking It To Detroit—More from Red Wings and Tigers execs about the new deal, at InsideRadio.com. — Get more news, people moves and insider extras @ www.insideradio.com. —
[email protected] | 800.275.2840 PG 4 CLASSIFIEDS insideradio.com TUESDAY, OCTOBER 13, 2015 qual NEWS-TALK GENERAL SALES MANAGER SALES MANAGER Looking for your dream job as a market-leading news/talk/sports GSM? Tired of the Mega News / Talk 95.3 MNC is looking for YOU! We are a family-owned, company rat race? innovative, and legacy media company based in Northern Indiana in the heart of Notre Dame Country. You’re 90-minutes away from Want to work for a company where Chicago and less than an hour from the beach. This market is a great place to raise a family and has some of the most affordable housing in your efforts are appreciated? the nation. We have all the top radio brands (Rush Limbaugh, Glenn Santamaria Broadcasting seeks Beck, Fox News, etc.), plus a local all-news morning show, a great local a Sales Manager for our PM-drive talk host and one of the best interactive teams in America. The Minneapolis Stations. Successful station already has ratings success. Now all we need is the right leader candidates should have a minimum to take us to the next level. You will have demonstrated experience of 5 years radio sales experience leading a spoken-word radio sales team and a proven track-record of and a proven track-record of sales success. See a full list of requirements in our full ad HERE. Interested? success and leadership. For confidential interview, send resume & cover letter: If you are ready to take on a Stephanie Michel, new challenge where the Director of Sales rewards will match your [email protected] efforts,send resume to: Federated Media provides extensive marketing and sales training interestedinthejob@yahoo. through The Radio Advertising Bureau and The Center for Sales com Strategy. Digital Training and Digital Services are provided through Federated Digital Solutions. Equal Opportunity Employer. An equal opportunity employer. qual SALES — NEW YORK CITY ACCOUNT EXECUTIVE - AUSTIN, TX You are the best of the best. You are self-motivated, creative, a pro- Salem Radio has an active problem solver, tenacious, detail-oriented, money-motivated unusual opportunity for a and approach this job as if you are your own CEO. You are a self- dynamic sales executive to starter, organized, detail-oriented and have the ability to work without much direct supervision. Entercom is seeking AE’s for 94.7 MIX FM, join the New York Cluster. Magic 95.5 FM and Talk Radio 1270 AM/96.3 FM. Entercom has Salem is one of the the latest tools and technology, the most knowledgeable management great dependable media and is known as offering the best work environment for selling radio advertising in the industry. Nobody in the Austin market can offer more companies in America. to their clients than Entercom Austin. Come join us!
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