SBS sells pair for 120 million

Spanish Broadcasting System is selling its 93.5 mHz simulcast in Southern California to de-leverage its balance sheet. The stations - - KZAB Los Angeles and KZBA Riverside-San Bernardino - - are going to Styles Media Group for 120 million dollars. Yes, that is the same Styles Media Group which currently owns stations in Panama City, FL, Dothan, AL and Southwest Georgia. One of the managing partners of Styles, Don McCoy, already owns KWIE-FM Riverside-San Bernardino, which will also be merged into Styles as it acquires the additional California stations.

Another Styles managing partner, Tom DiBacco, tells RBR that they had been talking to SBS since March about buying only KZBA for a duopoly, but SBS wasn't interested. Instead, Styles is now buying both stations and will split up the simulcast to launch new formats in both markets - - neither of which will continue the current Spanish programming. We asked the obvious question: Will Styles then sell the LA signal? "We want to keep it," DiBacco said. "It's not often you get to be in radio in the largest revenue market in America." He said Styles is currently debt free, so it has quite a bit of capacity to raise additional equity and borrow cash for the 120 million buy.

From the SBS side, CEO Raúl Alarcón says the sale will improve his company's balance sheet. "This transaction is consistent with our strategic plan of disposing of certain non-core stations to de-lever the Company. A combination of cash-on-hand and divestiture proceeds from recently announced station sales totaling approximately 230 million dollars will be available to reduce outstanding debt and strengthen our balance sheet. This, combined with our Company's superior audience delivery, will enable us to focus on increasing our cash flow and capitalizing on the explosive growth of the U.S. Hispanic market," Alarcón said. Closing is expected in Q4.