RBR has learned that Jeff Warshaw will replace Dean Goodman as CEO of the new company backed by American Security Capital Partners (ASCP) to buy 187 stations from Clear Channel for 452.1 million dollars – the single largest package of the Clear Channel Radio divestitures in medium and smaller markets. Relations between Goodman – former President of Ion Media Networks and its predecessor, Paxson Communications – and his equity backer had been deteriorating for a couple of months as ASCP delayed approving the management team that Goodman had chosen and resisted buying TV stations as well, although that had been specified in the original partnership deal. Our sources say ASCP brought Warshaw in to give it a second opinion on the Clear Channel deal and Goodman's plans, then decided to go with Warshaw instead of Goodman.
When contacted by RBR, Warshaw would confirm only that "I have been working as their advisor."
Goodman confirmed to RBR that he and ASCP have agreed to terminate their partnership, but not anything about his successor. He will continue to consult ASCP through closing of the Clear Channel purchase. Goodman will retain the GoodRadio.TV name and the non-Clear Channel stations, so ASCP will need a name change for the company as well when it files the FCC paperwork to change CEOs.
Warshaw sold his first Connoisseur group, mostly to Cumulus Media, for 258 million. His second company, Connoisseur Media, currently owns 17 radio stations and four CPs, mostly in markets 100+.
Note: RBR's full station-by-station and market-by-market breakdown of the original Goodman/ASCP deal ran in May (5/16/07 RBR #96).
SmartMedia observation: Don't shed too many tears for Dean Goodman. He got five million bucks when he left Ion and millions more when Citadel Capital took Ion private and bought out all of the public shareholders, including Dean. Now he gets a few million more from ASCP to walk away. With his own cash and that of the investors he had brought to the table (including Eddie Fritts, Larry Patrick and Carl Hirsch), Dean will be able to build a substantial radio and TV company without having to answer to a private equity partner. The six stations in Iowa that he already owns will be pulled out of the ASCP package, as will the 16-station Shepherd Group in Missouri that Dean is buying for 30 million. Other radio and TV buys are in the works and Dean's financing is not tied to the ASCP deal for the Clear Channel stations.
Meanwhile, we also hear that ASCP is trying to get Clear Channel to reduce that 452 million price tag, complaining about some of the financial details of the station operations, including contracts with Premiere, Katz and other Clear Channel subsidiaries. But Clear Channel doesn't seem to be inclined to budge – and could go after the 20,344,500 escrow if ASCP tries to play hardball.