Radio Waves Podcast #173

Radio: May 19, 2017

Power 106 (KPWR) -- a part of Emmis Communications since the company bought then-Magic 106 from Century Broadcasting in 1984 -- has been sold to Meruelo Group for $82.75 million.

The move takes Emmis out of a bitter ratings war with competitor Real 92.3, and allows the company to focus its resources in cities where the company owns more than once stations ... and can combine resources more easily. But I agree with CEO Jeff Smulyan when he calls the sale “bittersweet.” And the sale actually highlights a stark contrast in how Emmis operates compared with its much larger rivals iHeart and Cumulus.

Emmis is using the funds to pay down debt. Had the company not had debt, I sincerely doubt it would have sold. The $80 million will pay off about 60 percent of its debt and leave the company with a solid footing. 

Compare that with iHeart and Cumulus, both of which own hundreds more stations than Emmis’ remaining 18. The big boys owe billions -- with a b -- in debt, which they continue to try to restructure instead of selling properties to pay it down. Perhaps this is yet another reason to keep radio groups small ... the executives know how to play grown-up and handle their own finances.

"Power 106 has been part of the Emmis family for more than 32 years, so this day is bittersweet, but I am confident that the station and our team are in good hands," Smulyan told Billboard Magazine. "The Meruelo Group will be great owners of this historic brand, and take it to even greater heights."

Rumor has it that as part of the deal Meruelo will keep the vast majority of the current staff on board. For its part, Meruelo -- which also owns KDAY (103.5 FM) and KWHY-TV Channel 22 and is diversified into numerous other industries -- seems to have no plans for major changes anyway.

Still, that Emmis -- the company that let me intern at Magic 106 and the early months of Power 106, treating me well and teaching me much about the industry itself as well as giving me the chance to work directly with numerous true professionals both in front and behind the microphone -- will always be a special company to me, and I hope that they consider a return to Los Angeles when iHeart and Cumulus go bust.

Short Takes

I have to pull out my Carver TX-11B tuner out of the attic: rumor has it that KFI is indeed broadcasting a full audio bandwidth (translation: good-sounding analog audio), even though radios that can play full-bandwidth AM are few and far between ...

I happened to stop by a local Radio Shack store the other day, just a few days after the store put up signs announcing that it was closing. Kind of sad and ironic: not one radio in the store. I think I know part of the company’s problems ...

Oldies are here to stay on K-SURF (1260 AM), says owner Saul Levine. Unfortunately it appears that there will be no DJs on the station, a change of heart for Levine. The reason: the songs appear to be selling themselves and listeners are digging the sound. Still it would be nice to hear some announcers who could tie the songs together and add some more reasons to listen. Johnny Hayes comes to mind ...

Speaking of oldies and K-SURF: notice how even a station that barely covers metro Los Angeles can still attract an audience playing music instead of the typical fare found on the dial? A 0.4 share is pretty impressive for a station that barely makes it above the static where I live. Can I say “I told you so?” I will anyway; imagine what could be done with a real signal like 570, 710 or even 790 ...

I read it on a Facebook meme so it must be true: Congratulations to the busiest man in media, Ryan Seacrest, for being chosen as the next Director of the FBI ...