Burlington buy ushers in new era of oversight
White Park Broadcasting, a subsidiary of Northeast Broadcasting Company (NEBCO), is acquiring WVAA-AM Burlington VT from Radio Vermont for 400K dollars. While that amount is not going to cause any ripples on Wall Street, the broader outlines of this transaction point to where the nuts and bolts of station trading are no doubt headed.
First, let's get the nuts and bolts of the deal out of the way. Kenley D. Squire is principal of the seller, and on the other side of the trading table are Steven A. Silberberg and Edward F. Flanagan. They've already put up 10K in earnest money, will pay an additional 90K at closing and will pay the rest over time pursuant to terms of a promissory note.
Here's the problem: Silberberg and Flanagan already own nine stations in the Burlington VT-Plattsburgh NY radio market, according to a BIA Financial Networks overview cited by NEBCO: WRSA-AM/WLFE-FM St. Albans VT, WFAD-AM Middlebury VT, WTWK-AM Plattsburgh NY, WXAL-FM Addison VT, WLKC-FM Waterbury VT, WNCS-FM Montpelier VT, WRJT-FM Royalton VT and WDOT-FM Danville VT. Obviously, the resulting 10-station cluster wouldn't fly in New York City. much less Burlington-Plattsburgh, which ranked #139 in the Spring 2004 Arbitron survey.
However, NEBCO claims that four stations, WDOT-FM Danville VT, WRJT-FM Royalton VT, WNCS-FM Montpelier VT and WLKC-FM Waterbury VT, "have all been removed from the Burlington-Plattsburgh Arbitron Metro..." by Arbitron.
And indeed, Arbitron does appear to have come to the rescue, despite the fact that three of the four stations cited as outside the market received above-the-line ratings there in the Spring 2004 survey - - only WDOT-FM failed to make the book.
Arbitron created two new markets in the area. In letters which NEBCO used in its cluster filing, Arbitron said that newly created and rated Montpelier-Barre-Waterbury is home to WDOT-FM, WNCS-FM and WLKC-FM. WRJT-FM is in brand, spanking new Lebanon-Rutland-White River Junction.
RBR observation:
Regardless of how you feel about station ownership consolidation, the bottom line is this: A far-flung ten station cluster, OK under the contour overlap rules but illegal under the new Arbitron-geographical rules, has been transformed from one illegal 10-station cluster into three compliant configurations - - a six-station superduopoly, a three-station superduopoly and a standalone FM - - with a simple wave of the wand by the Arbitron market-definition fairies - - at least, that's what they're claiming.
Of course, the act of turning one market into three is much more than the wave of a wand, and we certainly aren't suggesting that it was done in the present instance to enable a relatively minor transaction, but it does expose the possibility of creating mega-clusters by, in essence, hiring Arbitron to use its definition-setting power to break up an existing market.
So in fact, the definition change which was supposed to clamp down on ownership consolidation may well have opened the floodgates for even more.
Are you reading this from a forwarded email?
