Weekly News Recap April 30-May 4, 2018 Industry Consensus Remains Elusive On Media Ownership.

As the FCC prepares to launch the next some groups look to sell the AMs in their Despite a lack of unanimity on radio’s legally-required quadrennial review of clusters to buy more FMs. But that could ownership limits, there is some media ownership rules, the industry deflate the value of AMs, as many go on consensus that more needs to be done finds itself in a unique position of the sale block in an environment where to address the still-low number of women deciding what to push for. Executives a fewer number of buyers are interested and minority owners in radio. But how to from across radio have begun holding in those stations. Miller Kaplan data get there is still the subject of debate. And discussions and it’s quickly apparent shows roughly 15% of the industry’s some broadcasters worry that relaxing that there’s a wide array of perspectives revenue is still tied to the AM dial and one radio ownership rules could make the and no clear agreement so far. Whatever veteran market manager said eliminating problem even worse. The diversity consensus is presented to FCC chair the subcaps would also lead to less question also ties closely with subcap proposals, since a disproportionate number of women- and minority-owned stations are AMs. The NABOB has said doing away with subcaps would not only undermine efforts to revitalize AM radio but also disproportionately hurt minority broadcasters.

The NAB has formed a committee of industry players to develop and submit a proposal to the FCC in the coming months. The FCC has often been hesitant Ajit Pai will be critical in helping him differentiation and a cheapening of the to take any action if broadcasters don’t decide which way to go as he looks FM band. largely agree on the solution for what the to fulfill his pledge to do away with industry views as a problem. But some outdated media regulations. Some worry that an aggressive push on industry veterans say that might not hold media deregulation could also result in true in 2018 as Pai looks to make good The FCC is currently considering the industry being painted with a bull’s on his pledge to address outdated media an outline that would take a tiered eye by consolidation critics. There ownership rules. They say it only further approach, allowing more deregulation are a number of issues on Capitol Hill raises the stakes on why broadcasters in smaller and unrated markets, with where radio needs bipartisan support, need to think long and hard about what less relaxation in big and mid-sized and the concern is there could be they really want out of the upcoming metros. One variable in the equation political fallout that could make it more quadrennial review. would be whether to do away with the difficult to achieve wins in Congress. subcaps which limit how many AMs or Fresh evidence of just FMs an owner can have as part of their how toxic the media WHAT HAS local cluster. ownership issue remains in Washington The industry split on whether the came last week when PROGRAM subcap rules are still needed isn’t new 22 Senators sent a but, with an FCC that might actually take letter to the FCC urging action, some broadcasters are taking it to take a “holistic” DIRECTORS a fresh look at why advocates for the look at the state of status quo should be heard in what may broadcasting and the become a proverbial “be careful what media. “Until this has TALKING? you wish for” scenario. occurred, the FCC Read more on page 3 should not adopt any Brokers predict a decision by the FCC to additional changes to do away with the subcaps may stimulate its media ownership the deal market in the short-term as rules,” the letter said. THIS IS AN ADVERTISEMENT

Page 1 Weekly News Recap April 30, May 4, 2018

After Sale, Liggins Seeks More Deleveraging Deals. Fresh from signing a deal to sell WPZR Detroit (102.7) to EMF for $12.7 million, Urban One CEO Alfred Liggins has signaled the company is interested in doing more transactions to further deleverage its balance sheet. While no other deals are imminent, Liggins told investors the company will “look for any transaction” that will help it reach a more desirable leverage ratio. “Where we have underperforming assets that somebody would deem more valuable than they would be in our hands, and that would continue to reduce our leverage, we’re open to that,” Liggins said during the company’s first quarter 2018 results call. More sales like the WPZR deal, which went for a high double-digit seller’s multiple, could help Urban One With Court Approval In Hand, Cumulus Eyes Exit meet its deleveraging goal. “We’re always trolling and looking From Chapter 11. at stuff and we believe there will be some options out there,” Independence Day could have a double-meaning for Cumulus Liggins said. At the right leverage, radio is “a great business Media this year. The company says it expects to emerge from with great free cash flow,” Liggins told investors. So good that Chapter 11 before the end of the second quarter, giving it a he says he’s fielded calls from venture capital firms asking for newfound financial freedom after years of punishing debt. In a his view of the business as they consider buying stations and major step toward exiting bankruptcy protection, the company’s holding on to them for their cash generation. FULL STORY financial reorganization plan was confirmed in U.S. Bankruptcy Court on Tuesday. CEO Mary Berner said the court approval Report: Radio Newsroom Salaries Increased In 2017. “allows us to complete the balance sheet restructuring that is A new RTDNA study shows local radio news salaries grew by critical to the success of our turnaround strategy. With a firmer 2.8% in 2017 – up from a 2.3% increase a year before. It was financial foundation in place, we look forward to continuing a comparatively good year overall for radio news salaries. to implement the business initiatives that have already taken However, the RTDNA findings were mixed for the two most this company so far.” Before the company can make break common positions of news director and news reporter. The from Bankruptcy Court, it first needs to satisfy the conditions latest instalment of the Newsroom Survey saw average radio outlined in the plan. The confirmation marks a crucial victory by news director salaries increase, but “they held steady in the Cumulus in a battle with its junior creditors over the valuation more meaningful median of radio’s third largest company. The “juniors” had argued that (typical) category,” the report Cumulus “grossly underestimated” its value so it can hand a read. Average salaries for controlling equity share to “their preferred new owners”—the news reporters also rose, but in terms of median, they actually company’s term loan lenders. But Judge Shelley Chapman dropped, the study found. Meanwhile, news producers’ salaries overruled the juniors and adopted the company’s suggested were down in both average and median. Increases came for valuation. The reorganization will reduce the company’s debt news anchors, sports anchors and web producers/writers. by more than $1 billion. FULL STORY FULL STORY

Edison: Radio’s Biggest Users More Likely To Own Entercom Gains Stake In USTN. Smart Speaker. Entercom has gained an equity position in Traffic As broadcasters look to smart speakers to increase AM/FM Network (USTN) as part of a new agreement with the traffic radio listening at home, a new study from Edison Research provider. The deal follows USTN president Ivan Shulman’s shows that one-fifth of broadcast radio’s biggest users already -based Fair & Equal LLC buy-out of the company, which own one. The report, which looks at the 30% of Americans age separated it from the Australian-based Global Traffic Network, 12+ who listened to more than one hour of radio in the last day, after Entercom revealed its Q4 earnings were negatively finds 82% of heavy radio listeners have a radio in their home, affected by financial issues it was having with the company. which means nearly 18% of this group achieved “heavy” status Further terms of the transaction were not disclosed. Entercom primarily through in-car or at-work listening. Intriguingly, 20% CEO David Field said he was pleased with the partnership of heavy radio listeners have smart speakers in their homes, and noted that USTN’s new management team “has moved compared to 18% for the total population. Radio’s best custom- quickly to fix their issues and establish a solid business model ers are heavy users of all audio – nearly two-thirds of “heavies” following the company’s separation from its former corporate listen to audio online, with large numbers choosing YouTube parent.” When reporting its Q4 numbers in March, Entercom (44%), Pandora (29%), and the streams of AM and FM radio said it was having “significant financial issues” with USTN, and stations (20%). Over one-in-six heavy radio listeners now say its quarterly numbers were negatively affected by a $4 million they have listened to a podcast in the last week. The report write-down it took from the ongoing issues with the network. is chocked full of sales-friendly findings about radio’s biggest Shulman, who was named chairman and CEO of USTN after users. Heavy radio listeners lean slightly male, skew older and its buy-out, said he looks forward to Entercom’s “new role as show a strong correlation with employment. Heavy radio listen- an equity-holder as we continue to build out the new face of ers are well-educated and skew a bit toward higher income U.S. Traffic Network.”FULL STORY levels as well. FULL STORY

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HD Radio Owner Xperi Releases ‘DTS Connected Weekly News Recap Radio’ Platform. April 30, - May 4, 2018 After years of development, HD Radio owner Xperi’s DTS Connected Radio platform is now available for automotive , Nielsen Delve Into Podcast Fan Spending integration in North America, Europe and Asia. By combining . over-the-air analog/digital AM/FM radio with IP-delivered Working with Nielsen data, on-demand audio platform content, the technology creates an “innovative AM/FM Cadence13 will issue a quarterly series of research reports that experience in vehicles,” the company explains. In short, offer insights into podcast fans and their spending habits. The the system receives metadata—such as artist information first looks at listeners that favor three genres – sports, society and song title, on-air radio program information and station & culture, and TV & movies – and explores their preferences in contact information—directly from local radio broadcasters, three primary categories: snacks, carbonated beverages and which is then paired with IP- beauty products. It shows that podcast fan households account delivered content, and displayed for 58% of all beauty product purchases, 56% of all snack in vehicles. The company’s purchases and 53% of all carbonated beverage purchases. hardware and software platform “..It’s clear podcasts have opened the door to a large and supports all global broadcast very valuable audience,” Cadence13 points out. Last August, standards—analog, DAB/DAB+ and HD Radio— so that Entercom invested $9.7 million in the company. FULL STORY automakers around the world can “rapidly develop and test platforms to accelerate commercial integration in production Mexican Broadcasters Cleared To Buy Two FMs in SW. vehicles,” Xperi noted. DTS Connected Radio is integrated For only the second time in the history of U.S. radio, a in vehicles via such aggregators as Radioplayer, TagStation foreign-controlled company is being allowed to buy American and Radioapp, open standards like RadioDNS or directly stations. The FCC is allowing SMG-MX, owned by two with in-house content management systems. The company Mexican nationals, to buy the currently silent KRPH (99.5) has also released the Broadcaster Dashboard, a web-based Phoenix and regional Mexican “Qué Buena 105.7” KQMX content management system, which provides broadcasters Bakersfield, CA. The FCC says the move has the potential to with direct control over their content in the DTS Connected open reciprocal investment opportunities for U.S. companies Radio ecosystem. In its announcement, Xperi said: “The in Mexico. SMG-MX is controlled by Juan Carlos Rodriguez DTS Connected Radio platform will enable broadcasters to with the balance owned by Francisco Gonzalez. They’ve deliver new and engaging services into connected cars of the already owned a 25% stake in the company since 2010. But future.” FULL STORY because both are Mexican citizens, it required a waiver of the FCC’s foreign ownership limits for the $125,000 deal to buy Q4 Revenue At iHeart’s Radio Division Grew $2.7M the other 75% stake held by Roberto Medina’s Deportes Y to $942M. Musica Comunicaciones. FULL STORY iHeartMedia has released more information about its Q4 and full year 2017 financial results. Revenue at the division Orlando Is A Two-CHR Town Again. that houses its 850 radio stations increased $2.7 million, or Aiming to bust out of the mid-pack of the Orlando ratings race, 0.3%, to $941.88 million, compared to the same period one shifted “Power 95.3” WPYO from rhythmic year earlier. Q4 marks a 19th consecutive quarter of year- CHR to mainstream CHR. To boost sampling and TSL, the over-year growth for iHeart’s radio division. Full-year 2017 relaunched station will air two-hour blocks of commercial-free billings grew $39.9 million, or 1.2%, to $3.44 billion. The music three times a day. “Power” ranked 12th in Nielsen’s company said growth in national and other revenue was March survey, trending 3.7-4.1-3.6 among listeners aged partially offset by lower local revenue. An increase in national 6+, making it the lowest rated of CMG’s five Orlando FMs. trade and barter, mainly from November’s iHeartMedia Music Positioned as “Orlando’s “New No. 1 For All The Hits,” the Festival, drove the national revenue gains. But increased station will now go head-to-head with iHeartMedia CHR “XL- programmatic buying was also a contributing factor. Those 106.7” WXXL, which ranked second in March (8.9-8.3-8.5). gains were partially offset by a decrease in national traffic and The flip makes O-Town a two-CHR market, after Entercom weather revenue. Local revenue was down due to lower spot transformed “Amp Radio 101.9” WQMP from CHR to and political revenue, partially offset by an increase in local alternative last November. FULL STORY trade and barter. FULL STORY

Marketers Media Consumption Perceptions Stray From Reality. There is a profound difference in how Americans spend time with devices and media versus how media decision makers perceive how consumers spend their time. Those skewed perceptions often steer professionals away from reliable, traditional media forms like radio and TV, according to a new blog post from . Media decision makers believe that Americans only spend 22% of media time with live or time shifted TV. The Nielsen reality is 36%. And when it comes to AM/FM radio, media decision makers believe consumers spend 8% of their time with AM/FM radio. The Nielsen reality is nearly double, at 15%. And time spent with smartphones is far greater in reality at 27% versus the 15% perception among media decision makers. FULL STORY

Page 4 STATION SALES: – Real Presence Radio filesWeekly a News deal toRecap buy religious KSTJ, Hartford, SD (91.3) from the CatholicMarch 12-16,Chancery 2018 Detroit – Radio One has struck a $12.7 Office for one dollar. million deal to sell gospel “Praise 102.7” WPZR to Educational Media Founda- SALES – TRANSLATORS tion. EMF is already in the Detroit market with five FM translators carrying Alabama – Red Mountain Broadcasting files a $125,000 deal its contemporary Christian “K-Love” to buy the Huntsville, AL-licensed translator W225AH at 92.9 network. Under the terms of the deal EMF will transfer three FM from Focus Radio Communications. The filing says the of the translators to Radio One allowing the company to main- translator will relay the HD3 channel of iHeartMedia’s country tain its gospel programming in market No. 13. They include WDRM, Huntsville (102.1) which is currently airing the Way the Detroit-licensed W228CJ at 93.5 FM; the Detroit-licensed FM contemporary Christian network. W252BX at 98.3 FM; and the Riverview, MI-licensed W228CU at 93.5 FM. The move follows Radio One’s 2017 sale of WCHB – Combined Communications files a $26,700 deal (1200) to for $2 million. Once the EMF to buy the Bend, OR-licensed translator K261DO at 100.1 deal closes Radio One will still own urban AC “105.9 Kiss FM” FM from Edgewater Broadcasting. The signal already relays WDMK in Detroit and it operates urban “Hot 107.5” WGPR Combined Communication’s “News Talk 1110” KBND. under a local marketing agreement with the International Free & Accepted Modern Masons, which owns the FM. Maryland – Entercom files to acquire the Frederick, MD- licensed translator W286DJ at 105.1 FM from iHeartMedia. Raleigh-Durham, NC – Educational Media Foundation files Entercom plans to relocate the signal to the Richmond, VA a $3.5 million deal to buy jazz WSHA (88.9) from Shaw Uni- market where it will simulcast “Fox Sports 910” WRNL. No versity. The deal includes the Rocky Mount, NC-licensed cash is changing hands. The filing says the transfer is related translator W271BT at 102.1 and the Fayetteville, NC-licensed to a tax-free swap between the two companies that saw iHeart- translator at 102.3 FM which relay WSHA. The deal will allow Radio trade its entire clusters in Richmond and Chattanooga EMF to upgrade temporary Christian “K-Love” programming to Entercom. on the Raleigh, NC-licensed translator W232CH at 94.3 FM; Colathe Sanford-NC-licensed Wars Hit Full Force translator With W270AW at 101.9 FM; and CLOSINGS Pepsi,the Wake Coke Forest, Vying NC-licensed On Radio. W288BQ at 105.5 FM. The filing says the three new translators that EMF is buying from St. Louis – has closed on a pair of Shaw will also carry the “K-Love” network. The university says deals valued at a combined $60 million, exiting the St. Louis WSHA will continue to stream content online. market. In the first deal Hubbard Radio paid $45 million to buy rock KSHE (94.7) and “105.7 The Point” KPNT. Oklahoma – David Smulyan files a $230,000 deal to buy The two rock stations join Hubbard’s existing cluster which country KBEL-FM (96.7) and “Talk 1240” KBEL in Idabel, OK includes “92.3 New Country” WIL-FM, “106.5 The from Rod Liechti’s Brute Force Radio. Smulyan will operate Arch” WARH and “101 Sports.com” WXOS. In a separate deal the stations under a local marketing agreement until closing. valued at $15 million, Entercom has closed on a deal to acquire CHR “Now 96.3” KNOU and “News Talk 97.1” KFTK-FM from – Educational Media Foundation files a $75,000 Emmis. Entercom entered St. Louis as part of its merger with deal to buy adult hits “X-106.7” WTNX, Lawrenceburg, TN from CBS Radio and it owns hot AC “KY-98” KYKY, AC KEZK-FM Prospect Communications. The FCC is currently reviewing (102.5) and “News Talk 1120” KMOX in the market. Emmis an application to allow WTNX to move up the dial to 103.9 FM has owned stations in St. Louis since 1984. In an SEC filing from anew location. EMF currently doesn’t own Emmis reported after paying taxes and transaction-related ex- any stations covering the area and it’s expected to put the penses it netted $40.5 million in proceeds from the two deals. contemporary Christian “K-Love” network on WTNX. Once The sale leaves Emmis with stations in New York, Indianapo- deal closes Prospect Communications will still own five stations lis, and Austin where it holds a 50.1% controlling interest in a in the area including country trimulcast WLLX/WLXA/WWLX six-station cluster. (97.5/98.3/590), country WKSR (1420), and classic country “The Legend” WDXE (1370) Tampa – Isaac Calle closes a $251,402 deal to buy out his Vision Communications Network business partners in the Arizona – Marvin Vosper files a $70,000 deal to buy the ownership of Spanish Christian “Genesis 680” WGES. Calle, currently-silent KCNL, Quartzsite, AZ (105.9) from John Fiori’s who previously held a 30% interest in WGES, paid $143,659 to FMI Media. The deal includes a $56,000 promissory note. buy Evelyn Chaparro’s 40% stake and $107,744 to buy Edwin Vosper already owns KBUX (96.5) in Quartzsite. Fiori Ortiz’s 30% stake. Calle doesn’t own any other radio stations. secured KCNL during Auction 94 in Aug. 2013 with a 35% new entrant bidding credit. Vosper would qualify for a just a 25% – ’s Family Worship Center Church bidding credit so it’s expected the 10% difference would need closes a $175,000 deal to buy gospel WGSG, Mayo, FL (89.5) to be repaid if the closing occurs before Aug. 20. Once the from True Concepts of Levy County. The Class C3 FM covers sale closes, FMI Media will still own the construction permit an area between the Gainesville and Tallahassee markets. for KMFM, El Indio, TX (95.1). Family Worship Center Church owns 31 other stations and WGSG becomes its first in the state of Florida. – William Rainer’s New Braunfels Communications files to transfer a controlling 83% interest in Americana KNBT – Joe Young’s Smash Hit Media closes a $100,000 (92.1) and classic country KGNB (1420) to, Mattson Rainer, deal to buy “Classic Hits 95.9” WIQI, Watseka, IL from Randy in a cash-free transfer. The remaining 17% stake continues Michael’s Radioactive. Young already owns three other stations to be held by Van Hoisington. Mattson Rainer hosts afternoon in Illinois but none overlaps with WIQI. He has been operating drive on KNBT. WIQI under a local marketing agreement since 2016.

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