*So much for black-owned radio in NYC (with the exception of WWRL am, but who listens to it?).
If you haven’t heard, WBLSfm and WLIBam are being acquired by Emmis after it’s been determined a $131 million transaction will double the company’s station operating income.
WBLS 107.5 FM — focusing on urban adult contemporary — is the No. 2 radio station in New York while it sister station WLIB 1190 AM is New York’s fist African American targeted station — focusing on urban gospel.
The agreement will double Emmis’ annual station operating income — who already owns WQHT (HOT 97) in New York.
“Today’s announcement is indicative of our belief in the US radio industry and our desire to increase our footprint in the nation’s largest market,” said Jeff Smulyan, President & CEO of Emmis Communications. “Emmis has deep ties to the New York African-American community, and it is with great pride we take the helm of these iconic stations.”
The purchase price will be paid in two parts. The first payment will be an estimated $55 million. It will occur right after the initial grant of the FCC’s consent to assignment of the stations’ FCC licenses. This is expected in the summer of 2014.
The second payment will be an estimated $76 million, and it will happened in February 2015.
Emmis will be paying for the acquisition using a new senior credit facility. The company is planning to take advantage of the institutional loan market in the coming months. Emmis expects its senior secured debt-to-EBITDA leverage ratio — calculated with the company’s existing credit agreement — to stay under 5x after the acquisition.
The acquisition could expire or be terminated early under the Hart Scott Rodino Antitrust Improvement Act of 1976, a standard anti-trust review.
Emmis and YMF requested the waiting period to be terminated. Hence, this could grant the company permission to begin programming the stations under a Local Programming and Marketing Agreement (LMA) around March 1. The monthly fee will be $1.275 million until the first purchase price payment and after it will be decreased to $0.74 million until the second closing.
In 2013, WBLS and WLIB reportedly had $31.9 million in net revenues. $16.5 million of the station operating expenses resulted in $15.4 million of the station operating income — excluding amortization and depreciation.
Emmis plans to have $3 million in annual expense savings after combining these two stations with HOT 97.