In June 2011, headlines blared the news that Randy Michaels — the flamboyant showman who took Jacor Communications and grew it into a 1990s-era radio industry force that’s now a part of iHeartMedia — was back in the business as an owner.
With funding from Chicago-based private equity firm GTCR, a newly formed entity named Merlin Media agreed to purchase an FM in New York and two Windy City FMs from Emmis Communications in a deal with a total value of $198 million.
The Chicago stations dealt to Merlin Media were Alternative WKQX-FM “Q101” and Classic Rock WLUP-FM 97.9. Unfortunately, Merlin’s experience as an owner of radio stations wasn’t exactly a positive one. By January 2014, it relinquished control of Q101 and WLUP to Cumulus Media with the crafting of an LMA-to-purchase agreement.
Now, Cumulus is moving forward with its right to acquire the FMs.
As stated in a Form 314 filing with the Commission made Tuesday (10/24), Merlin and Cumulus entered into what’s called a “Put and Call Agreement” on Jan. 2, 2014.
This essentially created a trigger event that would enable Cumulus, when it opted to, to outright purchase WKQX and WLUP; an LMA went into effect under the pretense that it would be in effect until FCC approval was granted.
With the purchase, Q101 and WLUP will now be sister stations of News/Talk WLS-AM 890 and Classic Hits WLS-FM 94.7 in Chicago.
How much is Cumulus paying for the two Chicago stations? The terms have not been changed since 2014, and it pay an amount equal to the greater of $70 million minus the aggregate amount of monthly LMA fees. Or, Cumulus may pay $50 million with 90 ninety days of the LMA’s fourth anniversary — January 2018.
Given the timing of the Form 314 filing, is is believed that the $50 million option is being executed at this time by Cumulus.
The official transfer of control of WLUP and WKQX to Cumulus marks the end of an effort by Michaels to launch a new radio company specializing in FM news programming. This saw the format change of WKQX to all-News, which was largely unsuccessful in its attempt to pull away listeners from CBS Radio’s WBBM-AM, NPR member station WBEZ-FM 91.5, and other radio stations targeting the younger listeners Merlin sought.
Merlin also launched FM News stations in Philadelphia and in New York, also in a failed attempt to draw listeners from CBS Radio all-News AMs in the respective markets.
In New York, Merlin’s former station is now Sports WFAN-FM 101.9, owned by CBS Radio.
In Philadelphia, the former WWIQ-FM 106.9 was sold to Educational Media Foundation in 2013 and is now WKVP-FM, airing the Christian AC KLOVE Network.
