It's A Big Deal: CBS Swaps For Beasleyâ€™s Philadelphia FMs, Miami Cluster
October 2, 2014 at 7:54 AM (PT)
As widely speculated in recent weeks, CBS RADIO is swapping its CHARLOTTE and TAMPA clusters and Sports WIP-A (CBS SPORTS RADIO 610 AM)/PHILADELPHIA to BEASLEY BROADCAST GROUP in exchange for BEASLEY's PHILADELPHIA FM and MIAMI stations.
CBS will receive Country WXTU and Top 40/Rhythmic WRDW (WIRED 96.5)/PHILADELPHIA and Top 40 WPOW (POWER 96), Country WKIS, and Sports WQAM-A/MIAMI in exchange for CBS RADIO's Urban AC WBAV (V101.9), Sports WFNZ-A (610 AM THE FAN), Top 40 WNKS (KISS 95.1 FM), Urban WPEG (POWER 98), Country WSOC-F, AC WKQC (K 104.7) and Sports WBCN-A (CBS SPORTS RADIO 1660)/CHARLOTTE; Sports WHFS-A (CBS SPORTS RADIO 1010 AM), Sports WHFS-F (98.7 THE FAN), Top 40 /Rhythmic WLLD (WILD 94.1), Country WQYK-F, Classic Hits WRBQ, and Tropical WYUU (MAXIMA FM)/TAMPA; and WIP-A.
The deal gives CBS two more FMs to add to its existing cluster, which includes Sports WIP-F, Classic Hits WOGL, News KYW-A and News-Talk WPHT-A. CBS also owns KYW-TV (CBS 3) and CW affiliate WPSG-TV (PHILLY 57 THE CW) and website CBSPHILLY.COM in the market. BEASLEY retains brokered programming and Spanish Sports WWDB-A and Religion WTMR-A/PHILADELPHIA. CBS RADIO enters MIAMI with the deal; CBS owns WFOR-TV (CBS 4) and MY NETWORK TV affiliate WBFS-TV (MY 33) in that market.
CBS RADIO Pres./CEO DAN MASON said, “This transaction reinforces our strategy to concentrate on large-market properties. We already have television duopolies in both PHILADELPHIA and MIAMI, so these new stations will be a terrific complement to our existing local broadcasting portfolio, and a welcome addition to the overall CBS family.”
In a memo to CBS RADIO staff, MASON added, "There are many positive effects this move will have on CBS RADIO in the future. Most importantly, for the first time we will own radio stations in MIAMI – a market where CBS already successfully operates two television stations, WFOR-TV and WBFS-TV. We’ve all seen the tremendous value we create by having our local radio and television properties work hand in hand. Our voices reach further, brands are more integrated into the daily lives of the audience, and advertisers can speak to a wide variety of consumers constantly on the go. Entering MIAMI marks an important step in enhancing our portfolio of premier stations.
"Secondly, we are attaining stations that appropriately align with our programming expertise in popular music and sports, two areas we have made significant investments in over the past few years. This also allows us to focus on markets that are showing the biggest growth potential and greatest returns on our investments.
"This move does mean we will soon be parting ways with a number of our respected colleagues. I have known the BEASLEY family for decades and admire their dedication to radio broadcasting. The properties they are acquiring dovetail nicely with their concentrated emphasis on operating mid-size market clusters of stations. BEASLEY highly regards our stations as first-rate organizations, and I am joined by all of the senior leadership at CBS RADIO when I thank our team members for their unqualified energy and commitment."
BEASLEY Chairman/CEO GEORGE G. BEASLEY said, "Throughout s 53-year history, we have actively managed our station portfolio with the goal of serving the local communities where we operate, diversifying our operations, managing risk and improving financial results. The asset exchange agreement with CBS RADIO addresses all of these strategic objectives as, upon completion, we will expand our station base by nine stations and add completed clusters in TAMPA and CHARLOTTE which complement our already strong mid-Atlantic presence. Furthermore, the transaction is also consistent with our long-term strategy to operate leading clusters in large- and mid-size markets.
"From a financial standpoint, the asset exchange will allow us to meaningfully expand our operating and revenue base without incurring additional borrowings or using cash from operations. Based on our expectation that the transaction will lead to station operating income accretion in the first 18 months after closing, we plan to further reduce the Company's leverage ratio which is presently near its lowest level in over ten years. Overall, we believe this transaction represents a unique and innovative means for BEASLEY BROADCAST GROUP to enhance shareholder value.
“Focusing on strong core programming and targeted localism is the cornerstone of BEASLEY’s operating philosophy, and it has proven vital to the Company’s ratings strength and success. While BEASLEY has operated in PHILADELPHIA and MIAMI and understands the value of stations in those markets, as well as the revenue they generate, consolidation and ownership of the maximum amount of stations in each market has been a long-term and consistent goal for the Company. This transaction places us in the unique position of owning a full complement of FM stations in seven of the twelve markets in which we operate.
“DAN MASON is a much-respected radio broadcaster and I hold him, as does BEASLEY BROADCAST, in the highest regard. The properties we are exchanging in MIAMI and PHILADELPHIA have been cultivated by committed and talented radio professionals and they enjoy deep roots in their respective communities. We believe they will prove to be great additions to CBS RADIO’s portfolio.
“As we look forward to welcoming the CBS RADIO stations to BEASLEY BROADCAST, and to integrating two new markets into our portfolio, we will continue delivering quality programming, effective online marketing solutions and dedicated service to the local communities we serve. Once approved by the FCC, it is my opinion that this transaction will create a win-win opportunity for both CBS RADIO and BEASLEY BROADCAST GROUP.”
MICHAEL BERGNER of BERGNER AND CO. represented BEASLEY in the deal.