David Landau, Spencer Brown on the merger of DG, WW1


RBR-TVBR asked Dial Global managing partners David Landau and Spencer Brown about the merger of Dial Global with Westwood One, now that it is complete and has cleared Hart Scott Rodino. Dial-Global will control the combined entity. We wanted to know their plans and more about the deal:

What does this new, combined entity mean to the radio industry?
Brown: We’re in a great position now to serve all constituents—large stations, small stations, medium markets. For us, it’s like the “Democratization of Radio.” We’re going to make sure that we serve the totality of markets and get them products like the NFL, The Wall Street Journal, basketball and more. Also, we are very proud to represent CBS Radio and CBS News.

What changes might be in store? What will be your first goals?
Brown: We want to make sure to focus on the customers. That’s our primary focus. But before making a lot of wholesale changes, we just want to make sure that our advertising and station customers get the best out of the newly-merged company.

Now, being on NASDAQ with access to the public markets and that money, what might you make Dial-Global into? Any diversification plans into other media?
Landau: We’re going to stick to our core constituency—radio. Westwood One is a good brand, they’ve got some great properties and we believe that by combining, we can be one of the leading providers of content to the radio industry. This is a great merger—NCAA, NFL, Dennis Miller, CBS News. They’ve got some great properties and we want to take it to a higher level.

Our mantra is it takes really talented, gifted people behind the scenes—production, sales, affiliate relations—to monetize what stars and quality product comes out of the speakers. At the end of the day, radio is a vital, vibrant industry and it’s about people. We’re creators and builders. Everything that we’ve done in almost 10 years—Kenny, Spencer, Neal—everything that we’ve put together has been about value creation, not growth for the sake of growth.

What about content from Compass Media Networks—you sell advertising for Compass, but Compass competes with Westwood One for sports rights in the NFL, NCAA and more. How do you see those gears turning together down the road?
Brown: Our relationship with Compass continues unchanged. Compass will continue to produce its own football games and sell them to radio stations and we’ll continue to provide ad sakes for Compass—no change. It will continue to run independent of Westwood One Sports. (Compass CEO Peter Kosann) has been a great partner and friend.

How much of the Westwood One name will be retired?
Brown: We intend to continue using the Westwood brand with regard to the NFL and possibly other sports.

How do you plan to grow the business in this tough economy? Is big going to be better?
Landau: It’s not about big, it’s about quality. Big has never been our focus. By creating quality products that stations and audiences want and enjoy—that’s the difference-maker. When you have creative, talented people on your staff that are in tune with the market and they know what the customers want, that’s what makes it work.

Are you comfortable with the combined debt level of the companies? Is there room to make more acquisitions?
Brown: We’re very comfortable with the capital structure. We worked very closely with our managers and partners at Oaktree Capital and we’re extremely comfortable with the way the company is set up. What’s critical for us is to make sure we consolidate this acquisition. As we said in the beginning, the first step is to make sure we are servicing our customers and doing everything right. Then we can look and see whether there are more acquisitions that make sense. We’ve never done acquisitions for the sake of doing them. We’re not serial acquirers—we’re builders. So we really want to consolidate this acquisition and then look and see what’s out there. Integration will be a part of this.

RBR-TVBR observation: This is a victory for folks that have done it the right way. Dial-Global built the company block by block (we knew them when…), they never let their customers down, they didn’t build the company on the backs of their employees, they built DG up in a very challenging environment and the capital investments followed. This is the fruition—it shows if you do things the right way, it can work out like this.

Moving forward it will be interesting to see if all the assets can truly build a digital strategy to accompany the content. Content is only King when you Control the Content.

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