Family Stations Will Sell 94.7FM WFME Newark

[TheBigA]

GM is close with WMTR and WDHA, why not get a full market (at least 90% market) FM!  They have Boston and Philly stations, I'm sure one in the middle would be nice for them.  They also have a kick-ass country station in Boston...

All that makes sense, except they're a family-owned private company without access to the big money equity funds.

[TimeIsTight]

Everyone assumes that Merlin will buy WFME?  Where is this "magical money" supposed to come from?  I can't imagine that there's much positive cash flow from the properties they currently own.

Merlin is backed by a Chicago-based private equity fund GTCR, which invests in companies with "growth potential."  It reportedly has about $3.25-Billion to play with.  And buying an FM license in a major market like Philly for $22-million is not going to tap them out anytime soon.  Not that they are likely to want to put good money after bad, but when you start companies with new ways of doing things to eventually generate growth, you are in it for the long-term, or at least several years.  Merlin isn't a year old yet and people like GTCR understand that.

Check out GTCR's website and you'll get an idea of how they think and work:  http://www.gtcr.com/

That said, it seems they see the growth opportunity in all-news, and they want to be in as many major markets as possible, likely meaning one station per market.  The only reason they have the second Chicago station is that it was part of the three station package they had to buy to get FM frequencies in NYC and Chicago.  They probably don't want to be in a music format business, but that could change if they can't find a way to make all news work.

The even bigger bucks new player in the Jersey radio game is Townsquare, which owns NJ-101.5 and clusters in South Jersey.

They didn't exist two years ago, now have about 180 stations, and are backed by Oaktree Capital, which has about $80-billion under management.  They could easily buy WFME, as a North Jersey relay for NJ-101.5's Jersey-centric programming.  That might work very well for them and they wouldn't have to deal with moving the transmitter to NYC to achieve their goals or reach their target audience.

Under normal economic conditions there might be a slew of companies bidding on a rare NY area FM license, but too many broadcasters are just trying to hold on to what they have got now, and aren't interested in taking on more debt.  So, while there are still multiple likely bidders the list is probably a lot shorter than it would have been ten years ago.

[Nick]

What if Townsquare buys 94.7 and creates a New York version of NJ 101.5, complete with oldies on the weekend? That would blow FM News out of the water.

[DToTheJ]

Putting a radio reading service for the blind on 94.7 would "blow FM News out of the water," at this point.

[CTListener]

What if Townsquare buys 94.7 and creates a New York version of NJ 101.5, complete with oldies on the weekend? That would blow FM News out of the water.

Why would they throw away weekends just to roll out a deep-playlist, '50s- and '60s-intensive oldies format to compete with a very strong, tightly focused WCBS-FM?

[Bill_W]

GM is close with WMTR and WDHA, why not get a full market (at least 90% market) FM!  They have Boston and Philly stations, I'm sure one in the middle would be nice for them.  They also have a kick-ass country station in Boston...

All that makes sense, except they're a family-owned private company without access to the big money equity funds.

Where did they get the money to buy WMMR in Philly when CBS had to get rid of it years ago and then buy 97.5 moving in to Philly from Trenton?

[Scott Fybush]

Where did they get the money to buy WMMR in Philly when CBS had to get rid of it years ago and then buy 97.5 moving in to Philly from Trenton?

They got 97.5 as part of a trade with Nassau involving 99.5 in the Boston market.

The reality here is that nobody - not Nassau, not Greater, not Townsquare - can afford to pay the New York City-market price Family will demand for the 94.7 signal and then turn around and pay back that debt by operating the station as a New Jersey-focused standalone. The revenue's not there to make it work.

[badjef]

With the future of 107.5 in the balance, the value of 94.7 may not be as high as if Innercity were in better shape.

That variable makes a purchase of 94.7 available to players who otherwise might consider 94.7 too high of a risk.

Add to that, the medical condition of Brother Camping, one can see why they changed the condition of the license back to "Commercial".

This is an interesting one, indeed. And just as we had been predicting all along.

Jeff in Sa-ra-so-ta!

[Theater of My Mind]

Scott, you previously pointed out some pretty steep challenges in trying to move 94.7 to Empire. If it's not possible to do that could Family really get a full NYC-market price for this station?

[Scott Fybush]

Scott, you previously pointed out some pretty steep challenges in trying to move 94.7 to Empire. If it's not possible to do that could Family really get a full NYC-market price for this station?

I dug into this pretty deeply a few weeks back in NERW...but the short answer is, no, they're probably not going to get as much for the 94.7 signal out of NJ as they could with a full Empire B. But a lot really depends on who's in the hunt for a signal and what else is available. The potential sale of 107.5 couldn't come at a worse time for Family, since it could offer a much better signal for a price not much higher than what 94.7 would bring if it were the only NYC FM on the market.

Even so, whatever price ends up being paid for 94.7 will inevitably reflect the 10 million or so potential listeners outside of NJ, not just the 4 million or so in north Jersey.