Rumors were rampant on Wednesday night that Entercom Communications would be making an announcement of some sort on Thursday morning.
What was the news? Entercom is selling its Country station in Philadelphia to Beasley Broadcast Group, its one-time owner.
Entercom won’t be dropping in station count in the City of Brotherly Love however: It is acquiring Jerry Lee‘s stand-alone AC, WBEB-FM 101.1 “More FM.”
The purchase price for WBEB is $57.5 million in cash.
Entercom, therefore, will be dipping in to its bank account to spend nearly $20 million to effectively trade up a heritage Country station created by Beasley in 1983 for an Adult Contemporary station long-owned by one of the last independent owners of an FM radio station in a top 10 market.
Beasley is paying $38 million to welcome back WXTU-FM 92.5 in Philadelphia to its stable of stations.
In a statement released before the Opening Bell on Wall Street Thursday, Entercom said the transactions are immediately accretive to Entercom and are leverage neutral.
With mainstream AC “More FM,” Entercom will now have a cluster in its home market (certain business operations are based in New York) a group comprised of Talk WPHT-AM 1210 (the former WCAU-AM), all-News KYW-AM 1060, Sports WIP-FM 94.1 (the former WYSP), Hot AC WTDY-FM 96.5, and Oldies WOGL-FM 98.1.
“We are very pleased to add the legendary WBEB, one of the country’s most recognized and awarded stations, to our group,” said Entercom President/CEO David Field. “It is a terrific addition to our lineup that will enhance our ability to serve our listeners, customers and the community. I tip my cap to Jerry Lee, one of the industry pioneers and a visionary leader who built WBEB into such a special station and has done so much for radio over the decades. We are saddened to say goodbye to our colleagues at WXTU, but know that they will be in great hands.”
A Local Marketing Agreement for WXTU will begin Monday, July 23. The transactions are expected to close by the end of Q3.
Commenting on the proposed transaction, Beasley Broadcast Group CEO Caroline Beasley said, “Our acquisition of WXTU-FM represents a strategically and financially compelling growth opportunity for our shareholders and further enhances our revenue and competitive position with a strong cluster of five FM and two AM stations in a key, top-ten market. Importantly, the addition of WXTU-FM is consistent with Beasley’s disciplined approach to growing our platform by executing accretive transactions that deliver valuable synergies and the potential for SOI margin improvement, all with a limited impact to our leverage.”
Caroline Beasley and her family know a thing or two about running a Country station in Philadelphia, the nation’s fourth-largest radio market. In 1983, Beasley launched WXTU against the advice of a number of industry pundits who believed it wouldn’t succeed.
WXTU was born in September 1983, transitioning from an Urban-influenced Top 40 as WIFI-FM. On March 1, 1984, Elvis Presley and Don Williams helped usher in the transition to Country with Sue Sanders behind the microphone.
The station thrived and resulted in Beasley’s exchange of WXTU-FM in 2014 to CBS Radio as part of a larger asset exchange agreement.
“Today, WXTU-FM remains one of the best and most listened-to country music stations in America,” Caroline Beasley said. “We are proud of this heritage and confident in our ability to continue the growth and success of WXTU-FM as part of the Beasley family of stations.”
She added, ““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. This focus continues to be an essential component of our long-term growth and success. We look forward to realizing the strategic benefits of this transaction in the coming quarters as we leverage our legacy ownership and knowledge of the Philadelphia market to deliver great local programming to listeners while creating an even stronger marketing platform for local area businesses.”
Entercom was advised by MVP Capital LLC on the WBEB transaction. Methuselah Advisors acted as financial advisor to WBEB-FM.
The Reed Smith deal team represented Philadelphia-based Jerry Lee Radio and was led by corporate attorneys Matthew Petersen, Nikki Bechtold and Amanda Mueller, and included Arnie Grant, Allison Sizemore, Shannon Mincemoyer, Michael Kostiew, Jessica Rose, Jennifer Smokelin and Mark Francis.
RBR+TVBR is speaking with Caroline Beasley exclusively and will offer a report later Thursday (7/19) for Members. Not a member? What are you waiting for! Join now.