At this point, basketball legend Magic Johnson is a radio mogul in only one market, having only recently filed to buy three stations in the Phoenix market. But he’s already said to be moving on a much larger transaction.
According to TheDeal.com, Johnson has cut a deal to buy the senior debt of ICBC Broadcast Holdings (Inner City Broadcasting) from Goldman Sachs. As with the Phoenix deal under the name Riviera Broadcasting, Johnson is said to be teamed with billionaire Ron Burkle’s The Yucaipa Companies. TheDeal.com reports that Fortress Investment Group is buying smaller slice of ICBC’s debt from GE Capital. In all, the debt held by Goldman and GE Capital is said to total $230 million in face value – although likely to be sold for a lot less.
Like so many broadcasters, Inner City was hit hard by the recession. At one point, ICBC CEO Pepe Sutton used an op-ed piece in the New York Daily News calling for the Obama Administration to bailout Black and Hispanic broadcasters as it did the banks and car makers. That didn’t happen, but it did apparently get the attention of the White House and made Goldman hesitant to move against one of the nation’s oldest and largest minority-owned radio companies.
Just what Magic Johnson plans to do – and how soon – isn’t clear. But it appears Inner City can no longer use the race card to keep its creditors at bay. Whether the 17 ICBC stations – including flagships WLIB-AM & WBLS-FM New York – will be totally merged into Johnson/Burkle’s Riviera Broadcasting, managed by CEO Michael Cutchall, is likely a matter to be negotiated.
ICBC President and COO Charles Warfield did not respond to an e-mail from RBR-TVBR seeking comment.
RBR-TVBR observation: However the chips fall, we hope that Johnson recognizes that the team at ICBC has some good players who have a lot to offer. The company just happened to be one of many which saw its leverage get out of control when the economy took a nosedive.