Connoisseur Media CEO Jeff Warshaw has been attempting to make his company a major player in the industry for years with recent attempts at acquiring Cumulus Media and Saga Communications. With their purchase of Alpha Media, Connoisseur will go overnight from nine stations in Connecticut and Long Island to 218 stations in 47 markets. And they likely will not be done.
Connoisseur is setting itself to become a major player in a likely deregulated market. The Alpha acquisition’s primary purpose will be to give Connoisseur the scale it will need to merge or acquire another of the larger operators. As there are many questions right now as to when further FCC action will happen on deregulation of the ownership caps and what it could look like, anybody who thinks they know what companies will be in play for an acquisition right now is just guessing. We may know what companies may be developing an exit strategy or preparing a growth plan, but not who will be able to execute.
Warshaw has already gone on the record that further growth is in the pipeline for the new Connoisseur. He told Inside Radio, “Strategic M&A has been a big part of my background and will continue to be. We think we have all the ingredients to be a highly successful local media company for many years to come.”
In Connoisseur’s announcement six markets are highlighted as being core to what the new company will be: San Antonio, Portland, Salt Lake City, Nassau-Suffolk, Palm Springs, and San Jose. Noticeable are that those are the five biggest markets the company will operate in along with one of the noticeable places that ad buyers and financiers are known to travel to. That seems to indicate as well that Connoisseur will be aiming for larger markets than small. The scale of revenue, number of stations, and access to financing that the new Connoisseur will have should make it a player to acquire one of many similar sized groups.
It was the smaller markets where Alpha made significant cuts last summer. In the interview Warshaw said, “We believe in having big presences, strong local teams, well-trained, large sales forces, providing the opportunity for our advertisers to be part of what we do for our local promotions and events.” How do you do that in markets that are down to just a handful of people?
After years of strife with the process of going through Chapter 11 bankruptcy followed by investors looking to cut their way to profitability including the massive cuts last summer, employees at Alpha Media should look at this deal as an attempt at bringing stability and growth to one that hasn’t seen that in years. We rarely see a much smaller company absorb a larger company, but Connoisseur has previously been bigger in its multiple incarnations. The original incarnation of the company sold 35 stations to Cumulus in 1999. Prior to cutting back to just Connecticut and Long Island last summer, the current company had grown to over 40 stations and over a dozen markets at its peak in 2015.
