In a major asset exchange that clears a big hurdle for Entercom in its effort to complete its merger with CBS Radio, the Philadelphia-based pure play broadcaster has agreed to trade WRKO-AM, WZLX-FM, WKAF-FM and WBZ-AM in Boston and KZOK-FM, KJAQ-FM and KFNQ-AM in Seattle to iHeartMedia.
In exchange, Entercom will acquire WRVA-AM, WRXL-FM, WTVR-FM, WBTJ-FM, WRNL-AM and WRVQ-FM in Richmond and WKXJ-FM, WLND-FM, WRXR-FM and WUSY-FM in Chattanooga, Tenn. from iHeart.
Seconds later, Beasley Broadcast Group revealed its making an FM-for-FM plus cash exchange in Boston. And, as expected, Bonneville International is getting control of stations in the Golden State.
Entercom kicked off the rapid-fire announcements at 1pm Eastern by noting that, first and foremost, it has reached a settlement with the Antitrust Division of the U.S. Department of Justice that will allow Entercom and CBS Radio to move forward with the proposed combination.
Then came confirmation from iHeart and Beasley of deals involving the four aforementioned markets.
Meanwhile, Local Marketing Agreements (LMAs) with Bonneville International Corporation in San Francisco and Sacramento.
As noted in our coverage of Entercom promotions and staff announcements, Entercom now expects its proposed combination with CBS Radio to close as early as Nov. 17, pending FCC approval.
“Today’s announcements mark a significant milestone as we work to complete the transformational combination of Entercom and CBS Radio,” said Entercom President/CEO David Field. “While it is necessary to divest certain stations in order to secure regulatory approval, it is difficult to part ways with so many strong brands and, most importantly, their talented people. However, we are excited by the terrific new additions to our lineup that will bolster our position in Boston and expand our footprint in the Southeast. We look forward to unlocking the potential of the combined company to deliver value for our listeners, customers and shareholders.”
Including the previously announced agreement by Entercom to divest three stations to Educational Media Foundation (EMF), Entercom and CBS Radio have agreed to divest a total of 19 radio stations in the markets of Boston, Los Angeles, Sacramento, San Diego, San Francisco, Seattle and Wilkes-Barre.
Collectively, Entercom will receive 11 stations in the Boston, Chattanooga and Richmond markets.
iHeartMedia Asset Exchange Agreement
Under the terms of the asset exchange agreement, iHeartMedia will receive four stations in Boston and three stations in Seattle. Entercom will receive six stations in Richmond and four stations in Chattanooga. As a result of the agreement, Entercom will enter two new markets in Richmond and Chattanooga.
The iHeartMedia transaction is expected to close in the first quarter of 2018.
“We’re excited to add these stations to iHeartMedia across broadcast, digital, mobile, social and our spectrum of iHeartRadio-branded live events,” said Bob Pittman, Chairman and CEO of iHeartMedia. “This exchange is an opportunity for us to expand our presence and further strengthen our position in two markets – Seattle and Boston – even though we have to give up two smaller markets that have been an important part of this company. This was a difficult decision for us, but we think we arrived at the best decision for our company, and we are pleased that we’ll continue to have a presence in the Richmond and Chattanooga markets through the iHeartRadio platform, Premiere Networks, the Total Traffic and Weather Network and the Virginia News Network.”
Pittman added that these markets are two of the few where iHeart did not have a full complement of stations.
The complete list of stations in the asset exchange agreement include:
|Stations to be divested to iHeartMedia|
|Boston||CBS Radio||WZLX-FM||Classic Rock|
|Boston||Entercom||WKAF-FM||Urban Adult Contemporary|
|Seattle||CBS Radio||KJAQ-FM||Adult Hits|
|Seattle||CBS Radio||KZOK-FM||Classic Rock|
|iHeartMedia stations to be acquired by Entercom|
|Richmond||WBTJ-FM||Hip Hop & R&B|
Beasley Asset Exchange Agreement
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-FM upon the completion of its pending merger with CBS Radio via an LMA.
This transaction is also expected to close in the first quarter of 2018.
Commenting on the proposed transaction, Beasley CEO Caroline Beasley said, “Throughout Beasley Broadcast Group’s 56-year history, we have actively managed our station portfolio with the goal of serving the communities where we operate with the best local programming and brands, diversifying our operations, managing risk and improving financial results. The agreement to add WBZ-FM to our portfolio addresses all of these strategic objectives as, upon completion, we will complement our already strong Boston market presence and content with the market’s best and most listened-to professional sports programming.”
She added that the transaction “will further diversify” Beasley’s Boston market content offerings with marquee sports programming and live game broadcasts of several of the most prominent and competitive professional sports teams in the country.
“Boston fans love their strong local teams and 98.5 The Sports Hub was the first Boston FM Sports Talk Radio Station to address this interest,” Caroline Beasley said. “Not only is The Sports Hub the flagship station for the New England Patriots, the Boston Bruins, the Boston Celtics and the New England Revolution, but it also features an outstanding line-up of on-air talent to keep Boston sports fans on top of all of their favorite teams every day, at any time and on any device.”
The asset exchange is expected to be accretive to Beasley at closing.
“Overall, we believe this transaction represents another unique and innovative means for Beasley Broadcast Group to enhance shareholder value,” Ms. Beasley said.
Bonneville Local Marketing Agreement
Under the terms of the LMA, Bonneville will program four stations in San Francisco and four stations in Sacramento.
The LMA will become effective upon the closing of the Entercom and CBS Radio merger. The complete list of stations in the LMA include:
|Stations to be programmed by Bonneville|
|San Francisco||CBS Radio||KMVQ-FM||Top 40|
|San Francisco||Entercom||KBLX-FM||Urban Adult Contemporary|
|San Francisco||Entercom||KOIT-FM||Adult Contemporary|
|San Francisco||Entercom||KUFX-FM||Classic Rock|
|Sacramento||CBS Radio||KYMX-FM||Adult Contemporary|
|Sacramento||CBS Radio||KZZO-FM||Hot Adult Contemporary|
There was no mention of an outright sale of the above properties to Bonneville.