In a deal that reorders the Charlotte radio landscape, WBT-AM (1110) – Charlotte’s first radio station and one of the first licensed broadcasters in the nation – will be sold for the third time in eight years.
Philadelphia-based Entercom Communications announced Tuesday it had reached agreement with Beasley Broadcast group to acquire WBT, its sister station WLNK-FM (“Link” 107.9) and the city’s leading sports station, WFNZ-AM (“Fan” 610), for $24 million in cash.
Beasley bought WBT and WLNK as part of the purchase of the Braintree, Mass.-based Greater Media, which has major radio stations in Boston, Philadelphia and Detroit as part of a $240 million acquisition announced this year.
Because of federal radio ownership limits, Beasley decided to sell WBT and WLNK and keep intact most of the rest of its Charlotte portfolio, which includes top stations WSOC-FM (103.7) and WPEG-FM (“Power 98” 97.9).
By adding WFNZ to the spin-off, Entercom controls the city’s prominent news-talk station, its leading sports station and a powerful FM signal in WLNK along with the syndicated “Bob and Sheri” show.
It also concentrates Charlotte’s key professional sports broadcasts under one owner: WBT has the contract for the NFL Carolina Panthers and WFNZ carries the NBA’s Charlotte Hornets.
Entercom, the nation’s fourth-largest radio company, had insisted that WFNZ be part of the acquisition, CEO David Field told The Charlotte Observer Tuesday.
“It was important to us because we felt adding that third brand to the cluster could create a great value here,” he said. “You think of the opportunities to collaborate and bring that firepower together – it will be good for listeners and customers.”
Field said negotiations for the stations have been going on for weeks.
No major changes can be expected at the three stations under new ownership at first, Field said, but managers at all of them will be asked how to make them better. Localism in broadcasting has long been a core value of the company, he said.
“We know there are a lot of great people there,” Field said. “You’re going to see us investing in great content. … We were attracted to these properties because the prior owners believed in building the brands with personalities and content.”
Entercom shares rose 10 percent to $14.36 after the announcement.
WFNZ sale unexpected
WFNZ’s sale had not been expected, but may have been telegraphed in a regulatory filing in September. Beasley said it estimated that it would have a $1 million annual cost savings in Charlotte after the sale of WBT and WLNK, meaning that savings would need to come from elsewhere in the company’s remaining Charlotte stations.
Locally-focused sports stations like WFNZ can be expensive to operate because they are management intensive, have a big stable of local personalities on the air and must pay fees to sports franchises and rights-holders.
“I’m hearing that Entercom regards WFNZ as one of the gems in the deal,” said Tom Taylor of RTK Media, a leading industry analyst.
“It makes the cluster more substantial and competitive,” he said, “and you’ve then got more male demos to pitch, along with hot WLNK and talk WBT.”
Without WFNZ, Entercom would have to compete with only two stations against the formidable cluster of stations owned by iHeart Media – which includes market leaders WEND-FM (“End” 106.5) and WKKT-FM (“Kat” 96.9) – and Beasley.
Under operations before the WFNZ spinoff, Beasley billed about $31 million annually of Charlotte’s $87.7 million radio revenues. WBT and WLNK billed about a combined $17 million annually, according to regulatory filings.
Loss of value
Entercom, founded in 1968, will operate 128 stations in 28 cities nationwide, including clusters in Greenville, S.C. – where it owns the news-talk station and sports station – and Greensboro. Field said there would be synergy between the nearby markets because many clients do business in two or three of them.
Greater Media paid a top-of-the-market price of $100 million for WBT and WLNK in 2008, which came as the recession was beginning to ravage the Charlotte economy. Under the acquisition, the stations were priced at less than a quarter of that, even with WFNZ added to the deal.
Greater Media admitted at the time of the 2008 purchase of the Charlotte stations that it paid a premium, but that it wanted to move away from more stagnant markets in Detroit and Philadelphia and into the then-booming Sun Belt.
WBT and WLNK were sold by Lincoln Financial, which was trying at the time to divest its broadcast holdings. In the latest deal, the stations return to the portfolio – Entercom bought the rest of the Lincoln Financial stations, from Miami to San Diego, in 2014.
WBT was the first licensed station in the South in 1922. It has had a variety of owners through the years, including CBS and Jefferson Standard Life Insurance Co., later Jefferson-Pilot. Its 50,000-watt signal is audible from Canada to Cuba.
Entercom is expected to begin operating WBT and WLNK in November and WFNZ by January as the transaction awaits regulatory approval. Entercom said it expects the transaction to close late fourth quarter or early in the first quarter of 2017.