Peter J. Benedetti is shaving the lone AM station from his five-station Billings MT cluster, hanging on to the four FMs that came with KGHL-AM in a transaction with New Northwest Broadcasters filed in late April 2009. But Benedetti’s company will retain an interest in the station after the sale to KGHL Radio LLC is completed.
The station is being sold for $500K. The buyer is led by Taylor Brown, officially designated manager of the entity in an operating agreement that accompanies the transaction contract, and also includes Shannon Brown, Russ Nemetz and Chris Nemetz. This group will make a $175K down payment and come up with another $175K in cash. BMG will kick in $150K in operating capital and benefit from a 30% stake in the company.
The purchasing entity will hold a 100% stake in the station assets and 70% of its membership interest.
The stations remaining in the BMG Billings portfolio include KGHL-FM, KQBL-FM, KRPM-FM & KRSQ-FM.
Often, when an AM-FM pair with similar calls is being split up, as is the case here, the buyer is contractually obligated to change calls at its earliest convenience, often before closing (necessarily with the seller’s cooperation). This case is the exception that proves the rule – the seller has promised to change the calls of KGHL-FM, allowing the buyer to stand pat with the calls.
The buyers will begin operating the station in an LMA prior to closing day, and will have five years during which to exercise an option to buy out BMG’s stake in the station.