Forced sale of Finest City Broadcasting's assets

[ncountysurf]

What is the impact of the forced sale of Finest City Broadcasting's assets (Z90.3, 91X, and Magic 92.5)?

Will the operations shut down as of 1/7? I assume a new owner could do whatever he/she wants...

 

[hotpatrick2004]

This could be great news for fm 94.9 i hope 91x does not go anywhere both stations are good!!!

 

[mj]

a new owner could do what they wanted with the stations format wise, but even with the reduced prices they are likely to pay under current market conditions the value they are buying includes the formats and brand equity each of the stations has along with the cash flow they are generating. One again this is likely not a case of stations losing money, but simply unable to service debt from a time when values were much higher and loans to support those values were established.
The bid date is 1/7...it would be some time after that time that a new owner would assume control.

 

[DavidEduardo]

What is the impact of the forced sale of Finest City Broadcasting's assets (Z90.3, 91X, and Magic 92.5)?

Will the operations shut down as of 1/7? I assume a new owner could do whatever he/she wants...

The Mexican stations are not owned by Finest City... they just have what amounts to a rather more complicated LMA for the programming and sales rights to the facilities. While the degree of "investment" is often rather nebulous in such cases, any transfer of the use or ownership of the licenses depends on Mexican agencies such as their equivalent of the FCC and such.

The only easily salable assets would be studio and office equipment.

 

[pjc1961]

From SDRadio.net: http://www.printfriendly.com/print?...-for-ale-91x-magic-92-5-z90/&partner=sociable

And the legal notice in the S.D. Tribune: http://classifieds.signonsandiego.com/ads/0010332227-01/

And from the "News" section of www.radio-info.com:

In San Diego, Finest City Broadcasting assets go up for sale January 7
Finest City broadcasts on Mexican frequencies, so it’s not transferring U.S. licenses, but is instead selling off whatever is used in the operation of its three stations. Those are modern rock “91X” XETRA-FM, rhythmic oldies “Magic 102.5” XHRM-FM, and rhythmic “Z90.3” XHITZ-FM. The reason for the sale is the borrower’s default on a December 2005 loan. Local Media of America Holdings is the agent for the lenders (the successor to CIT). Kevin Peterson of K & L Gates LLP is handling the sale in San Diego. Bids are due the morning of January 7 at Peterson’s office.

 

[SDRadio]

a new owner could do what they wanted with the stations format wise, but even with the reduced prices they are likely to pay under current market conditions the value they are buying includes the formats and brand equity each of the stations has along with the cash flow they are generating. One again this is likely not a case of stations losing money, but simply unable to service debt from a time when values were much higher and loans to support those values were established.
The bid date is 1/7...it would be some time after that time that a new owner would assume control.

I do not disagree with your assessment of the FCB. I do know that folks with contracts are nervous as all bets are off after Jan. 7. I do not believe it will take much time for a new company to take over the marketing rights of the three stations. Street buzz for a month highly suggest another group in town will grab them; but the process has to be played out. Three legendary stations, even with an "X" in the call letters, change the radio skyline in the San Diego / Tijuana market.

Oldies on a 100kw signal closer to the border would dominate.

Happy New Year 2010, everyone.

 

[nocoradio]

And because this potential deal involves Mexican transmitters (and Mexican station owners), that adds more chefs in the mix. For years, CC was forced to keep Magic 92.5 in National City at a building that was owned by the owner of the Mexican license. He collected rent on the transmitter use, and rent on the office space. He also forbid CC from changing formats. I don't know the current day specifics of the the true owners of the licenses, but my point is: There are more variables to this equation than just who will buy the furniture and equipment, then start running these stations. The agreements are between the owners and FCB. Also, don't forget the FCB is located inside the CC building. They are a major source of revenue for CC. CC leases office space, engineering services, IT services etc. to FCB. And that deal would come to an end potentially with FCB out of the picture. Which, sadly, would mean more layoffs at Granite Ridge.

This "Fire Sale" only relates to the physical property FCB owns, and could sell to payoff their loan. It is possible that one US company will takeover all 3 stations. But it's also possible that they will be split up. CBS only has 2 FM's in the market and could legally take on 3 more (although KYXY and Sophie are perpetually "For Sale") Lincoln Financial Media already has 4 FM signals in the market (97.3, 98.1, 94.9 and 92.1), so they would be prohibited by the FCC from operating all 3 of the FCB stations. John Lynch and his company could do it, though. And of course, CC is out of the picture, as they were forced to divest their operation of these same stations a few years ago.

 

[DavidEduardo]

It is possible that one US company will takeover all 3 stations. But it's also possible that they will be split up.

Only one real operator in SD has the experience needed to deal with Mexican LMA's.

(Well, really there are two, including Clear, because of Clear's involvement with Grupo ACIR in Mexico... but they are capped out)

CBS only has 2 FM's in the market and could legally take on 3 more (although KYXY and Sophie are perpetually "For Sale")

I doubt CBS would like to deal with the complexities of operating in the gray area of an acrosss-the-border non-owned license that has tocomply with Mexican law.

John Lynch and his company could do it, though.

Bingo. You just won a Walrus T-shirt.

 

[Garrett]

Just kicking the tires here,
but you know who those stations would be a great fit for?
BCA, that's who.

Hm, 91X associated with John Lynch, with an AM sports sister station?
That'd be a good fit, eh?

I'm sure someone else will grab em. But who knows, it'd be a good fit.

Just kickin' tires...

a new owner could do what they wanted with the stations format wise, but even with the reduced prices they are likely to pay under current market conditions the value they are buying includes the formats and brand equity each of the stations has along with the cash flow they are generating. One again this is likely not a case of stations losing money, but simply unable to service debt from a time when values were much higher and loans to support those values were established.
The bid date is 1/7...it would be some time after that time that a new owner would assume control.

I do not disagree with your assessment of the FCB. I do know that folks with contracts are nervous as all bets are off after Jan. 7. I do not believe it will take much time for a new company to take over the marketing rights of the three stations. Street buzz for a month highly suggest another group in town will grab them; but the process has to be played out. Three legendary stations, even with an "X" in the call letters, change the radio skyline in the San Diego / Tijuana market.

Oldies on a 100kw signal closer to the border would dominate.

Happy New Year 2010, everyone.

 

[RadeoEngineer]

Also, don't forget the FCB is located inside the CC building. They are a major source of revenue for CC. CC leases office space, engineering services, IT services etc. to FCB. And that deal would come to an end potentially with FCB out of the picture. Which, sadly, would mean more layoffs at Granite Ridge.

It's my understanding that these services were part of the deal with FCB and no cash flow to CC is involved.

"Fire Sale" only relates to the physical property FCB owns, and could sell to payoff their loan. It is possible that one US company will takeover all 3 stations. But it's also possible that they will be split up. CBS only has 2 FM's in the market and could legally take on 3 more (although KYXY and Sophie are perpetually "For Sale") Lincoln Financial Media already has 4 FM signals in the market (97.3, 98.1, 94.9 and 92.1), so they would be prohibited by the FCC from operating all 3 of the FCB stations. John Lynch and his company could do it, though. And of course, CC is out of the picture, as they were forced to divest their operation of these same stations a few years ago.

Lincoln isn't a player. They'd sell you their properties tomorrow for about 73 cents. Lynch has the expertise, but not the money, and the banks aren't lending for broadcast properties in any form right now. Those three stations could be playing Bonilla tunes next week. Hide and watch.

 

[mj]

FCB paid CC for those services monthly...

A new company already bought the bank debt from the previous lenders and that move is part of what is triggering the sale of the assets. So

I would put my money on BCA....

 

[radiode]

Correct, but the lease and services agreement were integral to the CC/FCB deal.

The lease was insisted on by CC since they obviously didn't want all that space sitting empty and anything they could due to help raise the enormous monthly nut for the GR building was definitely a Good Thing. It also saved FCB the time, upheaval and expense of relocating.

The Engineering and IT services agreement turned a potential major expense for CC into a nice monthly cash flow. (Which may have saved several Engineering jobs. At least for a few years...) Under CC's Corporate security rules at the time, non-CC employees were not allowed access to CC Engineering and IT equipment/areas. This would have required CC to completely recreate/duplicate the Engineering and IT facilities related to the FCB studios somewhere on their end of the building. FCB was insistant that any replacement facilities had to have absolute parity with they already had. The word came down from very high up on the Finanace side of Corporate to do "whatever it takes to get this deal done..." After looking at the cost and time required to meet FCB's requirements, it was proposed that CC simply furnish those services using CC employees, thereby avoiding the problem. (And making a little money on the side...) It also ment that FCB didn't have to deal with the expense of hiring their own technical support staff. They may have actually come out a little ahead financially on the deal. As far as the Service part, (once the people who actually put the deal together left both Companies), I can't say...

 

[nocoradio]

FYI, I called the law firm "handling the sale in San Diego" and they have no knowledge of their involvement in this. The woman I spoke with was very helpful, and scoured their entire company directory and found no Kevin Peterson of K & L Gates LLP in the San Diego office, or any of their offices worldwide. Hmm...

 

[johndavis]

FYI, I called the law firm "handling the sale in San Diego" and they have no knowledge of their involvement in this. The woman I spoke with was very helpful, and scoured their entire company directory and found no Kevin Peterson of K & L Gates LLP in the San Diego office, or any of their offices worldwide. Hmm...

This morning's Taylor on R-I newsletter issued a correction. It's Kenneth Peterson.

 

[nocoradio]

John, I saw that today. Still a little strange that nobody at the office had any idea what was going on. It appears it's all a dog and pony show. BCA is buying the stations (I have heard from 2 different sources in the know), and the "public sale" is just a legal show. What remains to be seen is:

Where will the studios relocate to? Or will they? Who will survive the new consolidation? What will CC do with the vacant office/studio space? Will BCA move all of it's operations into the same building with CC?

Also, this doesn't involve the FCC, and because payment is due on Thursday, I expect the transition to take effect immediately. The facility questions will take time to work out, but expect personnel changes quickly.

 

[SDRadio]

Also, this doesn't involve the FCC, and because payment is due on Thursday, I expect the transition to take effect immediately. The facility questions will take time to work out, but expect personnel changes quickly.

A simple cross border authorization will be filed (and granted) and the three stations won't miss a beat. As far as where they are going for studios ... that won't take long either but I expect some ch-ch-changes in the line up. Concur it'll be fast.

 

[RockTheGlobe]

FYI, I called the law firm "handling the sale in San Diego" and they have no knowledge of their involvement in this. The woman I spoke with was very helpful, and scoured their entire company directory and found no Kevin Peterson of K & L Gates LLP in the San Diego office, or any of their offices worldwide. Hmm...

That's because he's not in San Diego, he's based out of K&L Gates' Chicago offices, and his name is Kenneth Peterson, not Kevin.

 

[RockTheGlobe]

But it's also possible that they will be split up.

Not possible in this deal. The notice of sale specifically states that the entire lot will be sold together and that no assets can be individually purchased. The only way they could be split up is if someone buys all three stations and then turns around and spins one or two to another company.

 

[hipman2]

I assume that it's a done deal according to Chris

http://blog.sdradio.net/776/fcb-goes-to-bca/

 

[Garrett]

Oh, by the way...

Sometimes, stuff like this gets by me, and I just let it go. Not this time.

Several years ago, when these stations were split off to FBC, I questioned whether these stations could some day go to BCA. Was batted down. Guess what?


That said:
Correct me if I'm wrong, but 91X is going back into old hands, is it not?
With the XTRA call letters, I could imagine a scenerio (not specuilating, just saying) where "The X" is moved to a different frequency, and XX because "Xtra Sports FM," if, in the event that CC abandons XTRA on 1360.

Could be interesting, eh?