WBEB Gets Recap Funds


WBEB FM B101Monroe Capital is lending several million dollars to WBEB(FM), Philadelphia to help pay down debt.

The $35 million senior credit facility will support the recapitalization of WBEB by a fund affiliated with Equity Group Investments. The funds could also be used to fund future growth opportunities, BackBay Comunications tells RBR+TVBR.

Monroe Capital provides senior and junior debt and equity co-investments to middle-market companies.

Control of Jerry Lee’s WBEB was transferred from his JL Radio Enterprises to Zell Credit Opportunities Fund, LP, giving Zell a majority of the board seats (three out of five).

In November, Lee and Zell filed paperwork with the FCC to approve the transfer. The FCC approved the request in December.

According to the document, here’s what they told the commission in November:

“At present, Jerry Lee, LLC is directly controlled by Zell Credit Opportunities Fund, L.P., a Delaware limited partnership (“ZCOF”). Upon consummation of the proposed pro forma transfer, ZCOF would control Jerry Lee, LLC indirectly through ZCOF Radio, L.L.C. (“ZCOF Radio”), a new limited liability company of which ZCOF would be the sole member and sole owner. ZCOF Radio, in turn, would have 96 percent of the Class A Equity of Jerry Lee, LLC—an interest conferring voting control—and would continue to control the Board of Managers of Jerry Lee, LLC, as ZCOF does now. ZCOF— ZCOF Radio’s immediate parent company—would hold a 96 percent direct interest in the non-voting Preferred Equity of Jerry Lee, LLC.”

They said in the documents the changes would simplify the station’s ownership structure:

  • The membership interest of Methuselah Capital Partners, L.P. in Jerry Lee, LLC will increase to a four percent Class A Equity and four percent Preferred Equity interest;
  • The non-controlling equity interest of JL Radio Enterprises, L.L.C., in Jerry Lee, LLC will be redeemed; and
  • ZCOF affiliate Zell Credit Opportunities Master Fund, L.P. will no longer hold its present 23 percent non-voting minority interest in Jerry Lee LLC.

Except for Methuselah Capital Partners, which has a four percent equity and preferred interest in Jerry Lee, the only entities holding attributable interests in WBEB(FM) following the consummation of the pro forma transfer will be entities under common control with ZCOF and three previously passed-upon irrevocable trusts holding Non-Managing Interests in ZCOF affiliate EGI Investors, L.L.C. for the benefit of children of Mr. Samuel Zell.

They characterize the change as an internal reorganization among an existing investment group.

Last year it became public that Lee bought out partner Dave Kurt’s family for $85M+ when Kurt died in 2005. Lee had to pay a $22M note that came due; In July Lee and Zell filed a Form 315 with the FCC for Zell to take over the license.

RBR+TVBR contacted WBEB for comment.