The sale of KRBV-FM for 137.5M gives the buyer a strong foothold in a huge market and the seller a headache remedy far more effective than anything the pharmaceutical industry has come up with thus far.
It was only after New Years that Radio One rebranded the former KKBT-FM "The Beat" as "V100" KRBV-FM. Back in February, Radio One CEO Alfred Liggins said he was counting on a big head start for 2008 revenue results for the company simply because he anticipated the station’s turnaround was sufficient that at the very least it wasn’t going to drain 5M worth of black ink out of the bottom line. Instead, it will be bringing in a hefty bank deposit.
"This is an attractive transaction for Radio One, as it frees up capital and management resources which can be re-deployed to execute our long-term strategy’" said Liggins. "We expect to use the proceeds from this transaction to reduce our leverage, accelerate our internet strategy and re-commence a limited buy-back of our securities."
Bonneville CEO Bruce Reese said the company was looking forward to its return to Los Angeles and that it would get a time brokerage agreement in place just as soon as regulations allow. Although he didn’t mention any plans for the station, it is widely believed that a News format similar to WTOP Washington is in the works.
What about the other rumor – that Bonneville might flip the signal to Country? Mt. Wilson FM Broadcasters CEO Saul Levine, which operates Country KKGO-FM in LA, tells us if it happens, they will be in for a fight: “Under that supposition, some have speculated we would just pick up our tail and run…and that is not so. We ain’t leaving—we’re staying. We’ve been doing this for over a year now. We like what we’re doing—my 28-year old son is running the station as GM and my daughter is our legal counsel. They would be in for battle—I have no debt service and we have a far superior signal—a good part of the Country audience here is in south Orange County and up around Lancaster-Palmdale-Santa Clarita. We get in there, they don’t.”
Star Medias Group’s Peter S. Handy brokered the deal on behalf of Radio One. Additionally, Rothschild Inc. provided financial advice to the seller, and Lazard Freres & Co. worked with Bonneville.
RBR/TVBR observation: This is not the only Radio One/Bonneville arrangement; there’s Radio One’s LMA of WPRS-FM in Washington. We expect that will become a sale on the other end — Bear Stearns’ Victor Miller is looking for Radio One to send 35M Bonneville’s way to assume full ownership.
We believe this weighs in as the #4 single-station deal of all time. Ahead in line: the 280M sale of WALR-FM Atlanta from Midwestern to Cox; the 250M sale of KFSG-FM Los Angeles (now KXOL) from Foursquare Gospel Church to SBS; and the 140M sale of WQCD-FM New York from Tribune to Emmis.