Beasley Takes Over Two More In Las Vegas
May 28, 2010 at 2:06 PM (PT)
BEASLEY BROADCAST GROUP Chairman and CEO GEORGE BEASLEY's GGB LAS VEGAS, LLC is buying Rhythmic AC/Oldies KOAS and Alternative KVGS (107.9 THE ALTERNATIVE)/LAS VEGAS from RIVIERA BROADCAST GROUP, LLC for approximately $8.5 million, and the stations will be managed by BEASLEY BROADCAST GROUP's LAS VEGAS cluster, presently including Talk KDWN-A, Country KCYE (COYOTE COUNTRY 102.7), and Classic Hits KKLZ in the market, under a three-year management agreement with option to purchase for $8.5 million plus losses incurred before exercising the option.
The acquisition of RIVIERA's stations is expected to close in third quarter, subject to FCC approval; before closing, BEASLEY will operate the stations under an LMA that gives BEASLEY 40% of ad revenue for KOAS and KVGS until GGB closes on the acquisition. BEASLEY will then get the greater of 50% of aggregate monthly station operating income generated by the two stations or $10,000 per month.
GEORGE BEASLEY said, "This transaction allows BEASLEY BROADCAST GROUP to leverage its existing LAS VEGAS operating and management capabilities to immediately generate new cash flow through a structure that requires no capital commitment.
"Our existing LAS VEGAS cluster is benefiting from the focus we placed on identifying the right management leadership, and the 24% increase in revenue generated by our three stations in the market in the 2010 first quarter significantly exceeded the overall market which remains economically challenged. Notwithstanding the current economic and market challenges, we continue to believe that LAS VEGAS remains one of the most vibrant and promising radio markets in the country and this transaction is intended to benefit all BEASLEY BROADCAST shareholders both near-term and long-term as the local economy rebounds. On an immediate basis, the Company will generate guaranteed management fee revenue while the option to purchase these stations at an attractive price presents potential further upside to BEASLEY BROADCAST GROUP. Finally, KOAS-FM and KVGS-FM complement our existing LAS VEGAS station cluster as their current oldies and alternative rock formats, respectively, do not overlap with our existing stations in the market."
MICHAEL J. BERGNER of BERGNER & CO. acted as an adviser to GEORGE BEASLEY in the transaction.