Entercom Divests 100.3 The Sound Los Angeles & Two Others To Educational Media Foundation

Educational Media Foundation KLove Air1 100.3 The Sound KSWD Los AngelesUpdate 9/27: Educational Media Foundation will pay $57.75 million for the three stations.

Part of the deal includes an environmental assessment of the station properties and a clause that should a Remediation Assessment of the 95.9 WGGI facilities exceed $50,000, than EMF can remove that station from the deal by subtracting $275,000 from the purchase price.

Both KSWD and WGGI will join EMF’s Christian AC “K-Love” network, while 92.1 KSOQ will join Christian CHR “Air 1“. All three stations have applied to convert to non-commercial status and main studio waivers. No LMA’s are included in the deal, which will not close until after the CBS Radio/Entercom merger is completed.

Original Report 9/26: Educational Media Foundation will acquire three stations from Entercom as part of that companies required spin-offs from its upcoming merger with CBS Radio.

EMF will acquire Classic Rock “100.3 The Sound” KSWD Los Angeles as well as 92.1 KSOQ Escondido CA (Simulcasts Country http://www.froggy101.com/“>97.3 KSON San Diego) and 95.9 WGGI Berwick PA (Simulcasts Country “Froggy 101” WGGY Wilkes-Barre). EMF will use KSWD to debut the Christian AC “K-Love” network in Los Angeles, however that will also require an agreement with Univision as that company’s Spanish AC “107.5 K-Love” KLVE predates EMF and local usage. No word on the status of the soon to be former Sound staff, or if the Intellectual Property could shift to one of the current CBS Radio stations in the market. The impending demise of KSWD would leave Cumulus’ 95.5 KLOS as the only Classic Rocker in Los Angles.

Those three stations had been expected to be among the stations to be divested since the announcement of the CBS Radio/Entercom merger. KSWD was a standalone next to CBS Radio’s maxed out group of FM’s in Los Angeles, while KSOQ and WGGI were formerly grandfathered signals used to simulcast and boost coverage of a nearby Country station.

Entercom is still required to dives 2 FMs in Boston, 3 FMs in Sacramento, 4 FMs in San Francisco, 2 FMs in Seattle, and whatever else is imposed on it by the Department of Justice or FCC to clear the merger.

Entercom Communications Corp. (NYSE: ETM), a leading media and entertainment company, today announced that it has entered into an agreement to divest three stations to Educational Media Foundation (EMF), including KSWD-FM 100.3 The Sound in Los Angeles, KSOQ-FM 92.1 in San Diego and WGGI-FM 95.9 in Wilkes-Barre. This transaction marks the first required divestitures related to Entercom’s pending merger with CBS Radio.

“We have made great progress towards the completion of our merger with CBS Radio and this agreement with EMF brings us one step closer to the finish line,” said David Field, President and Chief Executive Officer, Entercom. “We remain on track to close the CBS Radio transaction later this year and confident in the value-creating opportunities presented by this transformational combination.”

Based in Rocklin, California, EMF is a non-profit organization that operates radio networks specializing in adult contemporary Christian music, including K-LOVE and Air1. As of September 26, 2017, EMF owns and operates some 770 FM stations and translators.

With EMF adding to its footprint in Los Angeles, San Diego and Wilkes-Barre, EMF CEO Mike Novak commented, “We are particularly excited to see what God has in store for the people of Los Angeles, through our new station, Positive & Encouraging K-LOVE at 100.3 FM. The people at Entercom have been a joy making this purchase possible.”

On February 2, 2017, Entercom announced an agreement to combine with CBS Radio Inc. in an all-stock transaction which is expected to be tax-free to CBS and its shareholders. The merger will make Entercom a leading local media and entertainment company with a nationwide footprint of 240 stations, with strong positions in virtually all of the top 50 markets, as well as robust digital capabilities and a growing events platform.

MVP Capital, LLC acted as a financial adviser to Entercom for this transaction.

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  1. davidg says

    How does this impact Univision’s K-LOVE established branding at 107.5?

    1. Joseph_Gallant says

      This will be an interesting legal battle.

      1. Eric Jon Magnuson says

        My hunch is that EMF and Univision already have an agreement of some sort–as I’m all but certain that EMF would’ve known long ago about the trademark issues here.

        1. Lance Venta says

          EMF knows. Their trademark for the K-Love brand is “limited to the area comprising the entire United States and its territories and possessions, with the exception of the following counties in California: Los Angeles County, Orange County, Ventura County, Inyo County, San Bernardino County, Eastern Portions of Kern County, Western Portions of Riverside County, and San Diego County; and the following counties in Texas: Houston County, Trinity County, Polk County, Tyler County, Jasper County, Newton County, Orange County, Jefferson County, Hardin County, Chambers County, Liberty County, San Jacinto County, Walker County, Madison County, Brazos County, Grimes County, Burleson County, Washington County, Fayette County, Colorado County, Lavaca County, Jackson County, Wharton County, Matagorda County, Calhoun County, Austin County, Waller County, Montgomery County, Harris County, Fort Bend County, Brazoria County, Galveston County, Cooke County, Jack County, Wise County, Denton County, Collin County Fannin County, Lamar County, Red River County, Hunt County, Delta County, Hopkins County, Palo Pinto County, Parker County, Tarrant County, Dallas County, Rockwall County, Kaufman County, Rains County, Van Zandt County, Erath County, Hood County, Johnson County, Ellis County, Henderson County, Comanche County, Hamilton County, Bosque County, Somervell County, Hill County, Navarro County, Freestone County, and Anderson County pursuant to Concurrent Use Proceeding No. 94002217. Concurrent Use with Application Serial Nos. 76525621, 76525622, 75430440 and 76525620 and Registration No. 2326583.”

          Those would be the Los Angeles, Dallas, and Houston markets where EMF does not own the rights to K-Love. Would not shock me to see Entercom transfer the Dallas rights as part of this or another divestiture deal. And I have reached out to Univision for comment regarding Los Angeles and Houston (where the brand is no longer in active use).

          1. davidg says

            Lance, in active use in Los Angeles at KLVE-FM 107.5 — check their website!

          2. Lance Venta says

            David – I mentioned that in the column itself AND the parenthesis were for Houston.

          3. Nathan Obral says

            KLVE targets a Spanish language speaking audience and has a totally different format, which may make an agreement for 107.5 and 100.3 to co-exist with the same brands possible. (KLUV is obviously an Anglophone station as well, so that may be a bit more of a challenge to parse out.)

        2. Ben Ditzel says

          Correct. I have been in touch with EMF for years and the reason that Playlist 92.7 switched to Air 1 and not KLOVE is because there was already a station by that name in the LA market. Similar issue in Houston, I believe. It seems that EMF may have reached a deal (unlikely to be a local rebrand but who knows).

  2. Joseph_Gallant says

    I expect that EMF will acquire at least a couple of other stations that will have to be divested in the CBS Radio/Entercom merger.

    I suspect that the combined CBS/Entercom will have to divest itself of at least two FM stations (maybe even three) in the Boston/Worcester market, and that EMF will likely end up with one of the divested stations.

    I suspect that Entercom’s two Class “B” “rimshots” (WEEI-93.7 and WAAF-107.3) might both get divested (with the programming of WEEI and the sports rights held by it and CBS’s WBZ-98.5 consolidated on a single station at 98.5 under the WEEI call letters), and if that’s the case, look for EMF to pick-up one of them to bring “K-Love” into Boston.

    1. Joseph_Gallant says

      The reason I feel EMF will pick-up one of the divested CBS/Entercom stations here in Boston is simple:

      Both iHeart and Cumulus have crushing debt loads, and quite frankly, I think both of them could declare bankrupt (and perhaps one of them going the Chapter 7 route, which would mean liquidation) before the end of the year (or perhaps not long after the CBS/Entercom merger is completed). So they wouldn’t be able to pick any stations up.

      In fact, as regards Boston, barring a Salem Media pickup of one of the divested FM’s (to run the company’s “Fish” satellite-delivered Christian AC format), or the owners of Haverhilll’s WXRV-92.5 buying WKAF-97.7 (to give WXRV’s Triple-A format a strong signal in Boston and points South), I wouldn’t be surprised if all of the FM stations that the combined CBS/Entercom have to divest wind-up with noncommercial operators, including but not limited to, EMF.

      1. Eric Jon Magnuson says

        I’ve been wrong plenty of times before (including about EMF), but I think that Entercom is looking first and foremost for swaps in these markets. At the very least, it’d probably prefer to spin off groups of stations, instead of individual ones.

        That said, I thought that Cumulus still had some sort of chance of picking up KSWD (to pair with KLOS)–by swapping standalone KRBE in Houston, and maybe a full cluster or two elsewhere.

      2. Charles Everett says

        Musical Chairs is a children’s game, Joseph! Let the process sort itself out.
        With 100.3 The Sound being donated to EMF, the Los Angeles Rams will have to find a new key station on FM for their broadcasts.

        1. Nathan Obral says

          That will be a mess in and of itself. (Wouldn’t affect rights co-holder KSPN 710 one bit, though.)

      3. ksradiogeek says

        iHeart will just continue to refinance their debt like always, and business will remain as usual. If anything gets spun off, its small market things. That company (along with Cumulus) will NOT be liquidated en masse.

        1. Nathan Obral says

          Oh, I missed that insane bit of prognostication. Cumulus and iHeart will continue to imperil the industry with their crushing debt loads, and they will always live to see another day.

    2. Nathan Obral says

      The thought of merging WEEI and The Sports Hub is not only ridiculous and impractical, it would immediately run afoul of the DOJ on antitrust grounds and kill the merger right then and there.

      Some group will get the current Entercom Boston cluster as a whole. It’s only a matter of what group can afford to buy the cluster. Beasley, Salem and iHeart are all out of the picture for obvious reasons, Alpha Media is selling stations and cutting personnel significantly, and Cumulus is trying to avoid going under. Maybe it opens up a door for Steel City or Summit Media if they want to expand like that.

      1. ksradiogeek says

        Hubbard would be the more likely company to get the Boston stations than Steel City. Summit would be best to stick to Southern markets.

      2. Mike Fitzpatrick says

        Don’t count out Cox Media Group as well. They own WFXT in the market, so it would fit nicely into a radio-tv pairing like they have in other markets.

        1. Eric Jon Magnuson says

          That could also apply to Seattle–where Cox owns KIRO-TV.

        2. ksradiogeek says

          Cox left the Northeast radio dial with the Summit deal and a few deals before that. Highly doubt this will make them want to come back. Unless if E-com wants to dump a cluster or two for it, Boston is highly unlikely. Again, Hubbard is more likely to grab these spinoffs.

          1. Nathan Obral says

            Hubbard already has a sizeable cluster in Seattle (the former Sandusky Radio cluster). I highly doubt they can take the CBS Seattle cluster in a clean transaction, something Entercom is likely going for.

          2. ksradiogeek says

            @Nathan- Oh for Seattle, I meant Bonneville. Hubbard will probably take Boston.

        3. Nathan Obral says

          Fun coincidence: WFXT and WEEI (then still at their original home of 590) were co-owned by the Boston Celtics in the early 1990s.

  3. Ben Ditzel says

    This is the first good news for Los Angeles radio in a long time! To be fair, I’ve often spoken against EMF because of their lack of solid Christian music but if I had to pick between the two, KLOVE does at least play the occasional song that is doctrinally sound lyrically ‘vertical’. And I am always for anything that will potentially plant the seed in someone’s life who will then grow from milk to meat. ?

  4. Ben Ditzel says

    This is the first good news for Los Angeles radio in a long time! To be fair, I’ve often spoken against EMF because of their lack of solid Christian music but if I had to pick between the two, KLOVE does at least play the occasional song that is doctrinally sound lyrically ‘vertical’. And I am always for anything that will potentially plant the seed in someone’s life who will then grow from milk to meat. ?

    1. ksradiogeek says

      …”anything that will potentially plant the seed in someone’s life who will then grow from milk to meat”?

      Hmmmm…ok then.

      1. Steve Varholy says

        Probably the first time that particular euphemism has been used in a religious context.

  5. Nathan Obral says

    This was an obvious transaction to make – a standalone FM in market #2 and redundant simulcast partners.

    It portends absolutely nothing about any future transactions or swaps. Some group or another has to get the necessary divestures ordered in Boston, et al. Those stations are going as groups, not standalones.

  6. e-dawg says

    I wonder if K-LOVE (KLVE) 107.5 will change their name to AMOR 107.5 like their sister station in Miami and Fresno?

    1. davideduardo says

      KLVE used to brand as “K-Love, Radio Amor”.

      But today, KLVE is a rhythmic AC, and eliminated the use of “Radio Amor” years and years ago as the popularity of softer Spanish language AC music pretty much died.

  7. David @ USC says

    “All three stations have applied to convert to non-commercial status and main studio waivers.”
    Is there an opportunity for an in the public interest appeal here to the FCC to try and stop this on the grounds that this status change would not be servicing the local community for which these public airwaves licenses are intended? If yes, I’ll be happy to join in on such a legal effort.

    1. homerjay says

      They’ve long since been exempt from that rule with their status, and IMO, those regulations are woefully antiquated for the age we live in regardless.

  8. Eric Jon Magnuson says

    Inside Radio got some quotes from EMF’s Joe Miller (who has also been quoted in plenty of other news stories about the company’s expansion, over the years)–and it looks like the plan may be for both K-Love’s to (more or less) co-exist…

    “We have discussed this with Univision and will be making certain accommodations to reduce the possibility of listener confusion[….] We are very sensitive to Univision’s heritage and commitment to protecting the K-Love brand[….] Naturally there are very distinct differences in presentation and target audiences.”

    (See http://www.insideradio.com/free/can-you-feel-the-k-love-in-l-a-that/article_6e2e1b5e-a4e8-11e7-b2da-43dcc6d31e62.html.)

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