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2+3 = A Cluster

DrAkbar

DrAkbar

Star Participant
While TMISU get a year's worth of LMA time in San Francisco & Sacramento thanks to the See BS/Entercom deal, what they really need in the Valley is a cluster of five FMs. Entercom enters Phoenix through the See BS deal, but do they really want to be here? While they can't go back to SFO & SMF, perhaps they'll work something out with TMISU regarding KOOL, KMLE & KALV. TMISU want to get back to SFO, but the Nurse and I question why they would really want over radio-ed SMF. So maybe a deal could be cobbled together that has TMISU buying the SMF stations and Entercom's three Valley stations. That would give I ♥ Debt a real run!
 
I see it the other way around actually. Entercom is looking at this deal on national scale. Plus David Field has made it clear he sees sports properties as a HUGE deal and they are looking to nationalize that. TMISU's Phoenix cluster fits that perfectly. No way Entercom wants to have zero presence in a Top 15 market. My hunch is these NorCal LMA's turn into outright purchase/swaps with both KTARs and KMVP a central part of the deal going to Entercom. I still think TMISU's Denver stations could be in play too...
 
Tom Taylor's view was that they couldn't settle on a good price, but they knew they wanted to do business. The LMA allowed the Bonnies to kick the tires and see what will be involved in running these stations. And it served the purpose for DOJ and FCC. In a year, they'll have a better handle on what it's all worth. Very smart, those TMISU.
 
beauduran said:
I see it the other way around actually. Entercom is looking at this deal on national scale. Plus David Field has made it clear he sees sports properties as a HUGE deal and they are looking to nationalize that. TMISU's Phoenix cluster fits that perfectly. No way Entercom wants to have zero presence in a Top 15 market. My hunch is these NorCal LMA's turn into outright purchase/swaps with both KTARs and KMVP a central part of the deal going to Entercom. I still think TMISU's Denver stations could be in play too...
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Like owning a Gremlin...anything can (and will) happen! KTAR & KMVP are huge cash cows and Los Buckeye Boyz find it hard to see TMISU parting with them. Sacramento aint all that attractive to large buyers, so the LMA was the quick solution to the problem. Perhaps EMF will want to upgrade in their hometown if the price is right. But will Entercom piece out the stations? Just remember what we said about our '76 Gremlin!
 
Although I didn't get a word if Bonneville will eventually trade their Phoenix stations to Entercom, it will be interesting to see if those stations will be involved in the next round of trading. Given the formats on the stations Bonneville's acquiring in Sacramento, they're likely to eventually own those stations outright.
 
miketheradioguy said:
Although I didn't get a word if Bonneville will eventually trade their Phoenix stations to Entercom, it will be interesting to see if those stations will be involved in the next round of trading. Given the formats on the stations Bonneville's acquiring in Sacramento, they're likely to eventually own those stations outright.
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Anythings possible with these two. Entercom does have a special relationship with TMISU, so Los Buckeye Boyz can't help but feel they'll be taking a look at their Phoenix stations and perhaps do some horse trading. 2 + 3 = A Cluster.
 
DrAkbar said:
Anythings possible with these two. Entercom does have a special relationship with TMISU, so Los Buckeye Boyz can't help but feel they'll be taking a look at their Phoenix stations and perhaps do some horse trading. 2 + 3 = A Cluster.
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I understand the rationale behind Bonneville's Phoenix stations. However, I'm not going to speculate on the 2nd round of trades at this time.
 
miketheradioguy said:
I understand the rationale behind Bonneville's Phoenix stations. However, I'm not going to speculate on the 2nd round of trades at this time.
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I would never say never. But the LDS community is also very important to Bonneville. They traded WLUP to get KKLT, KTAR and KKFR (92.3).

This is the second longest continuous cluster they have owned. If they wanted out, why didn't they with Hubbard in Seattle a while back?

There was tons of speculation Hubbard was buying KSLX/KDKB/KUPD and the AM's and would add Bonneville's four and spin one of the AM's

Hubbard and Bonneville have a lot of history too.

I also believe there will be a second set of spins. I still feel like Bonneville might be a caretaker for San Francisco.


Cumulus may have to sell stations if they go Chapter 11... could see some swaps/spins in SFO, Salt Lake (Cumulus challenged there) and Entercom has nothing and Bonneville can own 2 more FM's.

Las Vegas has a very large LDS population and Entercom could look at that being barely top 30 as tradeable.

Cumulus also owns Boise which has a major LDS population with Country, News/Talk, Sports, and Classic Rock.

I respect Bonneville as a great broadcaster for their commitment to their communities ... I hope they stay in Phoenix.
 
radioresearcher said:
I would never say never. But the LDS community is also very important to Bonneville.
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It is, but it's not a major determinate when purchasing in a new market. In el Lay, KSWD's format and purpose had the fingerprints of former BBS CEO Bruce Reese all over it. His religion had nothing to do with The Sound. Bruce went with Hubbard when Mom purchased a bunch of BBS stations and since has retired, but serves as an advisor to the company. The positive relationship between TMISU & Mom has a lot to do with Reese.

Cumulus may have to sell stations if they go Chapter 11... could see some swaps/spins in SFO, Salt Lake (Cumulus challenged there) and Entercom has nothing and Bonneville can own 2 more FM's.
Click to expand...

Doubt they'd sell much, if anything. Cumulus has strong cash flow, but is burdened by over $2b in debt that carries very high interest. CEO Mary Berner will probably have better luck dealing with creditors than I ♥ Debt, who is reeling from over $20b in debt. And a big bunch of that comes due next year! The beauty of the CBS/Entercom deal is they don't have anywhere the debt these two operators carry.

I respect Bonneville as a great broadcaster for their commitment to their communities ... I hope they stay in Phoenix.
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Los Buckeye Boyz think they will. And picking up the three Entercom FM's would greatly enhance their presence in the Valley.
 
TheBigA said:
Hmmm...the deal didn't create NEW debt, but Entercom is currently carrying about $1.7 billion in debt.
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True...but projected revenue will be 3x what Entercom did as a stand alone ($1.5b) and they have very healthy free cash flow. ETM just bumped their dividend to 36 cents a share, making for a 3.1% yield based on the latest closing price. Their ability to service debt is so much better than Cumulus and I♥Debt, and CEO Field sez they'll be $100m in savings when the two companies are combined. While not a Media Hut grad, he does have an MBA from Wharton School.
 
DrAkbar said:
While not a Media Hut grad, he does have an MBA from Wharton School.
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Lew Dickey got his MBA from Harvard. So there.

My point is Entercom is carrying about the same debt as Cumulus. Cash flow or savings is no indication that any of that money will be used to pay down the debt.

Debt is not a problem until a company can't make their payments. Cumulus and iHeart are approaching a point where that payment is larger than cash on hand. That's why it's an issue now.
 
TheBigA said:
Lew Dickey got his MBA from Harvard. So there.
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Lew never understood the concept of hiring good people, then getting out of their way. Mary Berner has done a great job cleaning up his messes and has more leverage with debt holders than Bob Pittman at I ♥ Debt. That's looking more and more like an impossible situation. So Los Buckeye Boyz like what Entercom is up to, and feel they'll run the former CBS stations a lot better.

Oh, and other alumni of Wharton are Elon Musk and Warren Buffett.
 
radioresearcher said:
I would never say never. But the LDS community is also very important to Bonneville. They traded WLUP to get KKLT, KTAR and KKFR (92.3).

This is the second longest continuous cluster they have owned. If they wanted out, why didn't they with Hubbard in Seattle a while back?

There was tons of speculation Hubbard was buying KSLX/KDKB/KUPD and the AM's and would add Bonneville's four and spin one of the AM's

Hubbard and Bonneville have a lot of history too.

I also believe there will be a second set of spins. I still feel like Bonneville might be a caretaker for San Francisco.


Cumulus may have to sell stations if they go Chapter 11... could see some swaps/spins in SFO, Salt Lake (Cumulus challenged there) and Entercom has nothing and Bonneville can own 2 more FM's.

Las Vegas has a very large LDS population and Entercom could look at that being barely top 30 as tradeable.

Cumulus also owns Boise which has a major LDS population with Country, News/Talk, Sports, and Classic Rock.

I respect Bonneville as a great broadcaster for their commitment to their communities ... I hope they stay in Phoenix.
Click to expand...

I have a couple points to make:

1. Hubbard didn't enter Phoenix and Seattle until 2013, when they purchased Sandusky Radio.

2. Las Vegas would be a tough market for Bonneville to get into, despite their large LDS population, plus Cumulus doesn't even own any stations in that market.

3. I don't know if Bonneville would want to acquire Cumulus' Boise cluster, since it's a medium sized market, and Bonneville mainly own stations in large markets.

4. Although it seems like a good idea for Bonneville to expand their Salt Lake City cluster, would Cumulus be willing to sell one of their stations in that market?
 
DrAkbar said:
Oh, and other alumni of Wharton are Elon Musk and Warren Buffett.
Click to expand...

... and the Prez (although an undergraduate degree).
 
miketheradioguy said:
I have a couple points to make:

1. Hubbard didn't enter Phoenix and Seattle until 2013, when they purchased Sandusky Radio.
Click to expand...

And your point is?

2. Las Vegas would be a tough market for Bonneville to get into, despite their large LDS population, plus Cumulus doesn't even own any stations in that market.
Click to expand...

That is why @radioresearcher said "tradable". As in "with Entercom".

3. I don't know if Bonneville would want to acquire Cumulus' Boise cluster, since it's a medium sized market, and Bonneville mainly own stations in large markets.
Click to expand...

There are regional synergies.

4. Although it seems like a good idea for Bonneville to expand their Salt Lake City cluster, would Cumulus be willing to sell one of their stations in that market?
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The assumption is that this would be possible if Cumulus had to spin properties... Bonneville might take a number of them in a package. Unlike CBS, Cumulus has no tax concerns on most stations as they were acquired with much higher prices and valueations than today's market would bring.
 
DavidEduardo said:


And your point is?



That is why @radioresearcher said "tradable". As in "with Entercom".



There are regional synergies.



The assumption is that this would be possible if Cumulus had to spin properties... Bonneville might take a number of them in a package. Unlike CBS, Cumulus has no tax concerns on most stations as they were acquired with much higher prices and valueations than today's market would bring.
Click to expand...

It's possible that Bonneville didn't want to sell their Phoenix and Seattle stations to Hubbard in 2011. However, I do agree that Boise is a logical choice for Bonneville given their LDS population, but it would be interesting if Bonneville has a play in Vegas.
 
miketheradioguy said:
It's possible that Bonneville didn't want to sell their Phoenix and Seattle stations to Hubbard in 2011. However, I do agree that Boise is a logical choice for Bonneville given their LDS population, but it would be interesting if Bonneville has a play in Vegas.
Click to expand...

Honestly, Bonneville has shown a desire to be with larger cluster situations. Hubbard could also be a player. I don't know that the DOJ would even let a Bonneville/Hubbard cluster in Phoenix exist with all that rock and Men.

You've still got Seattle and Phoenix in play where Bonneville and Hubbard are under the max.

Hubbard and Entercom are under the max in St. Louis and Minneapolis.

Cumulus has stations in Minneapolis (some bad rimshots but also KQRS and KXXR)

KNBR is pretty damn attractive for Bonneville or maybe Entercom in SFO. KGO/KSFO might be for someone committed to making it work.

Cumulus could still run as a smaller company in large and medium markets after getting out of Chapter 11.

Lot of potential deals ...

Cumulus is in the middle depending on what they have to do IF they go Chapter 11.
 
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