No preferable bid was forthcoming and US Bankruptcy Judge Robert Drain approved the offer by Clear Channel-owned Katz Media Group to have Interep’s radio representation contracts cancelled in return for payment of $3.64 million. That order, effective immediately, means that Katz can now negotiate with stations formerly represented by Interep – and that didn’t take long. Katz immediately announced that it had struck deals to represent Interep’s two largest former client groups, CBS Radio and Entercom.
But stations can also seek other alternatives. The judge agreed to a provision sought by Spanish Broadcasting System that bars Katz from seeing financial details of Interep’s client dealings until it has a contract with that client.
Katz says a new sales organization, which will represent CBS Radio and Entercom stations, will be based in New York and operate out of 12 offices around the country. It will be led by Jana Cosgrove, formerly President of CBS Radio Sales, who joined Interep in 1993 and was named Executive Vice President of CBS Radio Sales in March 2006. She will report to Mark Gray, President of Katz Radio Group.
“We’re delighted to represent CBS Radio and Entercom, two of the country’s most well-respected broadcasters,” said Stu Olds, CEO of Katz Media Group. “Radio is undergoing transformational changes with aggressive expansions into online, on-demand, mobile text, real-time data and digital broadcasts, resulting in a significant expansion of the medium’s audience and more engaged listeners. We’re thrilled to create new partnerships with broadcasters on the leading edge of these advancements, and we look forward to building long-term relationships that will create exceptional value,” Olds added.
“We have positively benefited from Katz representation at a number of our stations, and believe this enhanced partnership has significant advantages for our radio stations and the way in which we work with our clients. Stu and his team have long championed the industry speaking from a position of knowledge and enthusiasm. Including all of our stations and diverse assets in their messaging will help strengthen radio’s overall place in an advertiser’s media mix,” said Dan Mason, President and CEO, CBS Radio.
David Field, President and CEO of Entercom Communications, had this to say in the joint announcement of the new rep set-up: “We are very excited to enter into this new relationship and bring the rest of our station group into the Katz family. No other medium offers a greater value proposition or is better positioned for success in the current economic climate than radio. And with the continued development of innovative content, new digital technologies and integrated marketing capabilities, radio is fundamentally reinventing itself for tomorrow. We are excited to be part of this evolution.”
Back at Interep, employees who worked strictly on the radio side were told yesterday not to report for work today (Wednesday). There’s still money to be collected and paid out to client stations and such, so the backroom operations continue. That may go on for months at some level. Also, the employees of the other sales operations, the two Hispanic TV reps, Interep Interactive and such, are still working while bankruptcy trustee Kenneth Silverman works on deals to sell those divisions as well – which may come in just a few days, we hear.
RBR/TVBR observation: We hear that there were other offers – and that at least one bidder who wanted all of Interep offered more than Katz. But the proposal carried some risk, rather than all cash on the barrelhead – and Chapter 7 is all about getting cash for creditors right now in liquidation. It’s unfortunate for Interep’s former employees that some of the bidders who emerged in Chapter 7 weren’t around in Chapter 11 when a more creative deal might have been struck. Alas, a chapter in the history of American Radio has come to a close. The mega-rep firm idea that originated with Ralph Guild lives on at Katz, but the company he created, Interep, does not.