It took a little digging to find the price that Bonneville paid to acquire WTOP-AM in Washington DC, one of the 17 stations Bonneville just agreed to sell for $505 million.
According to Billboard Magazine from pg 97 on August 23, 1997:
Chancellor Media gave WTOP-AM and WGMS -FM(classical Music – now WTOP-FM) and KZLA-FM to Bonneville – Chancellor got WDBZ (New York), KBIG in Los Angeles, and KLDE in Houston in exchange. (KZLA-FM would be traded to Emmis in 2000 in exchange for the 4 stations in Saint Louis).
This was a station swap, so the “Price” of the transaction is somewhat arbitrary, except for the accountants and marketmakers wanting to inflate comporable station values to pump up the bubble. The “value” of the transaction at that time was considered to be $740 million.
So 3 major market stations were worth $740 million then, and 17 stations now for $505 million is a sign of a “recovery” in interest in radio? Hmmmm….. such a burden to care about history. So in 2000, the value of just WTOP AM/FM + WDRV-FM (Chicago) + the station they traded for St Louis was well over $1 billion….
Industry sources say that WTOP billed over $50 million in ad revenue last year, making it #2 in the country. They currently have 100 employees. $50 million to people in the government in DC is pocket change you don’t even bother bending down to pick up.
*** updated ***
The contract for this deal is now on file at the FCC here.
The $505 million to be paid at closing is cash – there is no assumption of debt mentioned in the contract other than the routine things involved in the day to day operations – the buyer is buying both the accounts payable and the accounts receivable. The wording makes it clear that some of the money for this transaction is coming from financing. The drop dead date to complete the closing is the end of May…. should the deal fail to close, there is a $20 million termination penalty.
Private hedge funds financing purchases of radio stations (probably with money from people who are not permitted to own U.S. radio stations) makes a mockery of the entire set of FCC ownership rules.
According to Tom Taylor’s sources, they are putting up only $100 million of their own money (and that might even be coming from their credit facility) – the rest is borrowed money. Here we go again.