We know that Dean Goodman’s Palm Beach Broadcasting is getting five FM stations in West Palm Beach from CBS Radio to add to the one he already has there, and we know that he will have to spin two of them. There is also one little item he isn’t going to get.
The stations involved in the deal are WIRK, WEAT, WPBZ, WHFS and WMBX. Goodman already owns WRMF.
For starters, the parties entered into purchase/LMA option agreements for both WEAT and WHFS, and the stations are identified as the ones that will be sold to a third party.
The WEAT option is pegged at $10.4M of the $50M deal total.
The WHFS option is pegged at $2.4M – not surprising for the least powerful station of the six.
CBS has also agreed not to compete with PBB for two years.
Finally, CBS retains the rights to the WHFS call letters. Those particular calls have long been associated with Progressive and then Alternative radio in the Washington and Baltimore markets.
The two parties will cooperate to put new calls on the station, and will also look into the possibility of a new city of license for West Palm Beach-based WEAT, possibly with an eye toward more populous turf to the south in Miami.
Star Media Group’s Peter Handy was the broker on the deal, on behalf of PBB.
Marci Ryvicker of Wells Fargo places the multiple in the low-double digits and think it is a great move for CBS – she said it “…shows CBS Radio’s ability to monetize its valuable assets.” She said that would put it a bit higher than other recent deals. She added that she does not believe this is an indication that M&A activity is suddenly going to pick up.
RBR-TVBR observation: The item CBS is keeping doesn’t come as a major surprise to us, and we have an idea where CBS may decide to put it to use.
We haven’t been keeping close track of call letter changes, so as an almost lifelong resident of the Washington DC area, it was a little disconcerting to see the call letters WHFS in use way down in Florida. Now that we know that they will continue to be the property of CBS, we will not be at all surprised to see them returned to the Washington-Baltimore corridor at some point.