Entercom Acquires Lincoln Financial Media. UPDATE: Entercom To Trade Four Stations To Bonneville

From Countryaircheck.com:

Entercom has entered into a definitive agreement to acquire Lincoln Financial Media for $105 million plus working capital. Subject to FCC and other regulatory approvals, the deal is expected to close in 2015's second quarter. Entercom receives 15 stations in Atlanta, Denver, Miami and San Diego, including Country KYGO/Denver and KSON/San Diego.

https://www.countryaircheck.com/art/30008

From All Access:

ENTERCOM COMMUNICATIONS CORP. has entered into a definitive agreement to acquire LINCOLN FINANCIAL MEDIA from LINCOLN FINANCIAL GROUP for $105 million plus working capital. The transaction is subject to FCC and other customary regulatory approvals and closing conditions. The Company expects that the deal will close in the second quarter of 2015.

The agreement includes fifteen radio stations in the ATLANTA, DENVER, MIAMI and SAN DIEGO markets, and it will expand ENTERCOM’s station portfolio to more than 130 stations in 26 markets. The stations included are Sports WQXI-A (790 THE ZONE) and Hot AC WSTR (STAR 94)/ATLANTA; Country KSON (and its simulcast KSOQ/ESCONDIDO), Alternative KBZT (FM 94/9), and Easy Listening KIFM (EASY 98.1)/SAN DIEGO; AC WLYF (101.5 LITE FM), Sports WAXY-A-F (SPORTS TALK 790 AM.104.3 FM THE TICKET), and Classic Hits WMXJ (MAGIC 102.7)/MIAMI; and Sports KKFN (104.3 THE FAN), Country KYGO, Top 40/Rhythmic KQKS (KS107.5), Sports KEPN-A (1600 THE ZONE), and Oldies KRWZ-A (CRUISIN' OLDIES 950)/DENVER.

Commenting on the agreement, ENTERCOM Pres./CEO DAVID J. FIELD stated, “We are excited to announce the acquisition of LINCOLN FINANCIAL MEDIA and welcome the addition of their outstanding brands and talented broadcasters to ENTERCOM. LFM is a great organization that has done an excellent job serving its listeners, customers and communities over many years and we look forward to building on that tradition. LFM is a perfect fit for us as it bolsters our position in DENVER and expands our footprint into ATLANTA, MIAMI and SAN DIEGO with terrific brands that have significant growth potential. Furthermore, it fulfills our disciplined acquisition criteria as it enhances our company’s competitive position and growth and should be accretive to shareholders in 2015 while having a minimal impact on leverage.”
FIELD also took to TWITTER to make the announcement:

http://www.coloradomedia.net/forums/...ntid=599&stc=1

"We are pleased to reach an agreement with ENTERCOM COMMUNICATIONS to sell LINCOLN FINANCIAL MEDIA," added LFM Pres./CEO DENNIS R. GLASS. "Not only will this transaction allow LINCOLN FINANCIAL MEDIA to align itself with a well-respected media organization, but it also enables LINCOLN FINANCIAL GROUP to focus on its strategy to grow its core lines of business."

The transaction is structured as an acquisition of the stock of LFM with a tax election that allows ENTERCOM to receive a step-up in the tax basis of the station tangible and intangible assets providing additional future tax shields and enhancing future free cash flow.
The $105 million purchase price will be paid in the form of $77.5 million in cash and $27.5 million in new perpetual cumulative convertible preferred stock that will be issued to LINCOLN. ENTERCOM expects to finance the cash portion of the purchase price through a combination of its existing $50 million revolver, cash on hand, and through other financing sources, if necessary.

The convertible preferred stock will not count as debt under the Company’s debt agreements. With the use of convertible preferred stock and adjustments for pro forma cost savings reasonably expected, the transaction will have minimal impact on the Company’s leverage as defined under its credit agreement.

Entercom anticipates that it will begin operating the LFM stations under a time brokerage agreement which is expected to commence in late JANUARY following the usual Justice Department regulatory review. In order to comply with the FCC’s station ownership limitations, the Company plans to divest one FM station in the DENVER market.

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From The Denver Post:

Entercom has reached a deal to acquire Lincoln Financial Media, both major radio operators in Denver, for $105 million plus working capital.

The sale of 15 stations in four markets including Denver will mean the loss of jobs for dozens of local radio employees. Lincoln Financial Media’s Denver holdings were KYGO, historically one of the most recognized country stations nationally, KQKS, KKFN, KEPN and KRWZ. KYGO-FM, Comedy 103.1, has shown tremendous growth in its first year.

The agreement, for $105 million plus working capital, will expand Entercom’s station portfolio to more than 130 stations in 26 markets. The transaction is pending FCC approval and other regulatory hurdles.

In a note to staffers, LFM chief Bob Benson said the transaction is expected to close during the second quarter of 2015 but Entercom will begin operating the stations under a time brokerage agreement on Jan. 16.

Here’s the complete list of LFM stations to be acquired by Entercom:

Denver
KEPN-AM Sports
KYGO-FM Country
KKFN-FM Sports
KQKS-FM Rhythmic CHR
KRWZ-AM Oldies
Translator (KYGO HD-2) Comedy

Atlanta
WSTR-FM Hot Adult Contemporary
WQXI-AM Sports

Miami
WAXY-AM/FM Sports
WLYF-FM Adult Contemporary
WMXJ-FM Classic Hits

San Diego
KBZT-FM Alternative
KSON-FM/KSOQ-FM Country
KIFM-FM Adult Contemporary

Entercom said it will have to divest one FM station in Denver to comply with FCC rules. Currently Entercom owns KALC (Alice 105.9 FM), KOSI (101.1 FM), KEZW (Studio 1430 AM) and KQMT (The Mountain, 99.5 FM) in Denver.

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Entercom owns these Denver stations: Classic Rock KQMT 99.5 FM, AC KOSI 101.1 FM, Hot AC KALC 105.9 FM, and Nostalgia KEZW 1430 AM.

Lincoln Financial owns these Denver stations: Country KYGO 98.5 FM, Sports KKFN 104.3 FM, Rhy CHR KQKS 107.5 FM, Oldies KRWZ 950 AM and Sports KEPN 1600 AM.
It also runs translator K276FK 103.1 FM, that has a comedy format.

I wonder which FM signal they will sell to get down to the max of 5 full signal FM stations in the Denver market? They can't touch the translator at 103.1 FM, since it wouldn't count as a full FM signal needed to be divested.

The 2 lowest rated FM stations between all of the Entercom and Lincoln owned stations are KKFN and KALC.

Since I hear sports has a bigger profit margin, maybe they will take KKFN's format and move it to KALC's better signal to give it better coverage before they divest KKFN's 104.3 FM signal?

Anything is possible, so it should be interesting to see what happens closer to when the sale is final.

Quote:

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Originally Posted by Rob

Entercom owns these Denver stations: Classic Rock KQMT 99.5 FM, AC KOSI 101.1 FM, Hot AC KALC 105.9 FM, and Nostalgia KEZW 1430 AM.

Lincoln Financial owns these Denver stations: Country KYGO 98.5 FM, Sports KKFN 104.3 FM, Rhy CHR KQKS 107.5 FM, Oldies KRWZ 950 AM and Sports KEPN 1600 AM.
It also runs translator K276FK 103.1 FM, that has a comedy format.

I wonder which FM signal they will sell to get down to the max of 5 full signal FM stations in the Denver market? They can't touch the translator at 103.1 FM, since it wouldn't count as a full FM signal needed to be divested.

The 2 lowest rated FM stations between all of the Entercom and Lincoln owned stations are KKFN and KALC.

Since I hear sports has a bigger profit margin, maybe they will take KKFN's format and move it to KALC's better signal to give it better coverage before they divest KKFN's 104.3 FM signal?

Anything is possible, so it should be interesting to see what happens closer to when the sale is final.

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This would be a perfect time for Janice that owns 93.7 the ROCK to acquire whatever FM station that well be let go and move that station to that frequency!
Since Entercom owns 104.3 and 105.9, the choice is probably going to be interesting. I would hate to loose ALICE, since that is the only unique radio station in the Denver area, and it is.
It's only those 2 stations that are up in the air to on which one well be let go?
I remember reading this about a year or so ago? They really should kill off 1600, since it's not doing them any good and since no one can even pick it up, and Oldies 950 isn't do that well either. Just two Djs left and that's it.

holy crap. 13 major market full power (as far as i know) stations for 8 million a pop, plus the translator? station valuations have really, really fallen.
wasn't the jeff-pilot sale more than that just for this cluster?

I can't imagine that there's room for the whole enchilada in either building.

i would think wilks would want alice so as to stop fighting with mix. i feel horrified for the alice peeps were that the case. I'd think ETM would want to spin off the sports thing instead, if you look at how the clusters are skewed and think in terms of combo buys; it really will hurt CC (or whatever ridiclous thing it's called now)

Station prices have taken a nose dive since the 90s when these stations were going for $20+ mil a piece.

There are so many scenarios with what happens...

Entercom may want to keep KALC to prevent someone from taking it and hurting KOSI.

But Entercom does have a sports station in more than half of their markets already. So keeping KKFN might be a better choice, especially if it is profitable.

Or they could get rid of one of the other FM stations, but they all have a great niche in the market with great ratings...

It will come down to what profits look like for each station.

It will be interesting to see who can buy the station that they sell.

They may sell it to someone who won't have a format that will affect the stations they decide to keep. That could hurt the owners of 93.7 The Rock's chances to buy since their format is similar to KOSI's.

Wilk's buying KALC is an interesting thought for sure...

Nothing's confirmed but according to Tom Taylor's Radio email newsletter that I get every weekday morning it looks like KKFN 104.3 might be the one that gets divested.

From: http://www.insideradio.com/Article.a...593&spid=32061


Entercom identifies spin-off in LFM deal.

Denver is the only market where a spin-off will be needed for Entercom to meet local FCC ownership limits in its $105 million purchase of Lincoln Financial Media. The company says it will sell sports “The Fan” KKFN (104.3), a 91,000-watt class C1. Not counting an HD-fed translator airing comedy, KKFN is Lincoln’s lowest rated FM in the market. Entercom CEO David Field says it has been operated “somewhat independently,” making it the “cleanest station” to sell.

It would be interesting if Dealin' Doug's group buys 104.3. Knowing those boys, I bet they're taking a look at this. Moving to 104.3 would suddenly make them a player in the market.