If there was a day for radio industry pundits and prognosticators to digest perhaps the biggest merger-driven divestments in a generation, this was it.
Two AMs and two FMs in Boston and an AM and two FMs in Seattle are being traded to iHeart media by Entercom. In return, Entercom is getting two AMs and four FMs in Richmond and four FMs in Chattanooga, Tenn., from iHeart.
Also involved is Beasley Broadcast Group. It’s saying goodbye to a heritage AC in Boston, and in doing so just landed “The Sports Hub.” It took a little cash along to get the deal with Entercom done, and CEO Caroline Beasley tells RBR+TVBR why the transaction was consummated.
Under the terms of the asset exchange agreement, Beasley will receive one station in Boston.
Beasley will exchange WMJX-FM 106.7 in Boston and pay $12 million cash in exchange of Sports Talk WBZ-FM 98.5 in Boston.
Entercom will begin operating WMJX upon the completion of its pending merger with CBS Radio via an LMA, and the transaction is expected to close in the first quarter of 2018.
Why did Beasley move forward with this deal?
“It’s all about content, and we believe Sports Talk offers us original, local content,” Caroline Beasley says. “That, in addition to [The Sports Hub] being one of the best brands in the country, gives us a way to diversity our revenue in the Boston market, between spoken word and music programming.”
Beasley is also high on the local content origination that The Sports Hub brings Boston, and believes this is a highly strategic fit to how the company’s other radio stations take a live-and-local approach to reaching listeners.
The Sports Hub is home to the New England Patriots, Boston Bruins and Boston Celtics.
She admits that swapping a heritage radio station such as “Magic 106.7” is “very difficult and bittersweet.” But, she believes that the swap “elevates our company” in terms of what it means for the entire radio industry.
“We did not go in to this swap lightly, because Magic is such a great brand in this market,” Caroline Beasley says. “It really was the foundation of Greater Media. This trade was not made lightly.”
What will the swap and cash payment for WBZ-FM do for Beasley’s Q4 2017 and 2018 earnings forecasts? There will be no adjustments, as the company expects to close on WBZ-FM in Q1 ’18.
“At this point, we’re going to just step back and take a look at this landscape,” she says.
Will the listener know that new owners are set for the respective stations? “I don’t think they will be able to tell of any changes,” Beasley notes.
Meanwhile, Caroline Beasley addressed the question of why Beasley Broadcast Group opted to acquire a Sports station in Boston. In Miami, Beasley’s cluster included Sports WQAM-AM; the company in October 2014 swapped its Miami stations for CBS Radio’s stations in Tampa.
However, that same deal saw Beasley and CBS Radio swap stations in Charlotte with properties in Philadelphia, bringing Beasley’s Philly cluster a Sports property — WTEL-AM 610.
She explains of Sports Talk, “It’s a format where there are passionate fans. It can be — and will be – successful. We’re very confident in radio, and the results speak for themselves. This swap is accretive to our shareholders, so our shareholders should be very happy with this transaction.”