CBS And Beasley Swap Philadelphia/Miami For Charlotte/Tampa

CBS Radio Beasley Broadcasting 92.5 WXTU 96.5 WRDW Philadelphia  Power 96 WPOW 560 WQAM Miami Charlotte TampaCBS Radio and Beasley Broadcasting have agreed to exchange 19 stations in four markets.

CBS will acquire five stations from Beasley: Country 92.5 WXTU and Rhythmic CHR “Wired 96.5” WRDW-FM Philadelphia along with Sports 560 WQAM, Rhythmic CHR “Power 96” WPOW-FM, and Country “99.9 Kiss Country” WKIS in Miami.

Heading to Beasley are fourteen stations including CBS’ entire Charlotte and Tampa clusters: CHR “Kiss 95.1” WNKS, Urban “Power 98” 97.9 WPEG, Urban AC “V101.9” WBAV, Country “The New 103.7” WSOC, AC “K104.7” WKQC, Sports “610 The Fan” WFNZ, and Sports “CBS Sports Radio 1660” WBCN Charlotte, Spanish CHR “Maxima 92.5” WYUU, Rhythmic CHR “Wild 94.1” WLLD, Sports “98.7 The Fan” WHFS-FM, Country 99.5 WQYK, Classic Hits “Q105” 104.7 WRBQ, and Sports “CBS Sports Radio 1010” WHFS. Beasley also gains Sports “CBS Sports Radio 610” WIP Philadelphia.

Beasley Broadcast Group, Inc. (NASDAQ: BBGI) (“Beasley” or “Beasley Broadcast”), a large- and mid-size market radio broadcaster announced today that it entered into an asset exchange agreement with CBS Radio, whereby Beasley will exchange five stations in Philadelphia and Miami for fourteen CBS Radio stations in Tampa-St. Petersburg, Charlotte and Philadelphia. Pursuant to the terms of the agreement, there is no cash consideration or other
contingent consideration to be paid by either party beyond the asset exchange.

The planned asset exchange will substantially broaden and diversify Beasley’s local radio broadcasting platform and revenue base with fourteen new stations that are geographically complementary to the Company’s ongoing operations while also presenting financial and operating synergies with the Company’s ongoing station portfolio and digital operations. Beasley Broadcast Group expects the transaction to be accretive to its station operating income in the first eighteen months of ownership. Station operating income or “SOI,” a non-GAAP financial measure, consists of net revenue less station operating expenses.

The transaction is expected to close in the fourth quarter of 2014, subject to Federal Communications Commission approval, the expiration of the applicable Hart-Scott-Rodino waiting period and other customary closing conditions. Upon closing, the proposed transaction will increase Beasley’s portfolio of owned and operated stations to 53, including 33 FM and 20 AM stations, in twelve markets with approximately 7.7 million weekly listeners. Today, Beasley owns and operates 44 stations, including 28 FM and 16 AM stations, in eleven markets with approximately 7.1 million weekly listeners.

Commenting on the proposed transaction, George G. Beasley, Chairman and Chief Executive Officer, said, “Throughout Beasley Broadcast Group’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 eighteen 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.”

Mr. Beasley added, “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.”

He continued, “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 J. Bergner of Bergner & Co. assisted Beasley Broadcast with this transaction

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  1. Nathan Obral says

    I am impressed. This is a perfect, clean swap that benefits both chains.

    I wouldn’t be suprised for CBS to swap the intellectual property of 610 and 1210, with 1210 taking the CBS Sports Radio lineup and WIP calls. WPHT is the odd duck in CBS’ spoken word cluster, but that programming could at least be run in tandem with WWDB/860.

    1. Autodyne says

      That makes good sense.

      Though CBS maintains the intellectual property of WIP via 94.1 regardless, they may well decide it’s more valuable to clear CBS Sports programming on an O&O in Philly than achieve any real ratings or local billings with 1210. Beasley could then broker 610 to carry Premiere and Cumulus talk programming as 106.9 did.

      The 1210 blowtorch would once again become a listenerless proxy for corporate priorities, harkening back to the WOGL(AM)/WGMP days, which is a shame, but the conservative talk audience would still have 610 as a consolation prize.

      Then, as Lance speculated, the question becomes whether CBS puts KYW-FM on 96.5 or goes with another music format.

      Since CBS already invests in KYW’s expensive format, lately for diminishing returns, an FM presence is a likely priority. That would mean that spoken-word programming returns to 96.5 in Philly after a 14-year hiatus – but will the teletype and traffic beds be in stereo as they are on 94.1 HD2, or will 96.5 return to “glorious wrap-around mono??”

  2. JayR says

    560 WQAM is the CBS Sports Radio affiliate in Miami. Will they replace the entire lineup or simply modify it and keep some of the local programs?

    Now this is truly interesting…

  3. Stelly says

    Funny that both the heritage WHFS and WBCN calls, though parked as parked can be, are now leaving the CBS stable.

    1. Joseph_Gallant says

      Unless they get moved somewhere else and get “parked” there.

  4. ksradiogeek says

    CBS owns the CW affiliate in Tampa, WTOG. Would it really be worth it? (Of course, you can make the same argument for KSTW in Seattle in combo with their cluster.)

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