Citadel adds to Providence cluster
Citadel Broadcasting is adding to one of its largest markets, Providence, RI (#34) with a deal to buy a trio of stations from AAA Entertainment for $16.5M.
Citadel, which already owns four FMs and two AMs (including heritage giant WPRO-AM) in Providence, is now adding Rhythmic CHR pair WWKX-FM Woonsocket, RI and WAKX-FM Narragansett Pier, RI, along with Classic Rock WMOS-FM - - which is licensed to Montauk, NY in the Nassau-Suffolk market (#18) but broadcasts from studios inside the Mohegan Sun casino in Connecticut and is reported by Arbitron in the New London market (#171). Since Citadel already has an AM and two FMs in the New London market, this deal actually adds stations in two Citadel markets.
Providence was long Citadel's largest Arbitron market, but it was surpassed a few books back by Salt Lake City, which currently ranks #32.
AAA's broker for this sale was Robert Maccini of Media Services Group.
RBR Observation:
It's pretty much a given that the FCC will red-flag this deal, since Citadel and Clear Channel already have huge revenue shares in Providence, even before Citadel adds the AAA stations.
We've often written that in many small markets there is only room for two strong yet legal radio station clusters. This is an example of a larger market for which the same case can be made. Clear Channel and Citadel are basically operating in a dead heat in Providence - - both are around a combined 20-share 12+ above the line. One of the AAA stations - - WWKX-FM - - pulled a 3.0 12+ over the summer, giving Citadel an edge. The other - - WAKX-FM - - is barely a factor in the market. In the last year it never did better than an 0.3.
If the AAA stations combined with all of the others in the market, which total about an 8-share, they would still come in a distant third to Citadel and CC. It would take an unimaginably complex deal to create such an also-ran cluster, and it simply isn't going to happen.
The reason for this is Boston and New Bedford, each of which take a significant bite out of Providence's total share. New Bedford, in fact, is considered to be embedded in the Providence market, and some of its stations actually show up above the line in both books (we've treated them as out-of-market for this discussion). New Bedford stations took about a 9-share. Almost 24 points went to other below-the-line stations, mostly out of Boston.
For the record, Clear Channel Boston stations grab about a 4-share in Providence; Citadel stations out of New Bedford grab about a 2-share.
In summation, combined shares in the 20s are nothing in this era where scores in the 30s are common. This is an unusual market. If the station contours are legal, the FCC should just wave this one on through.
