It’s a done deal. After a couple months of haggling, Alpha Media has closed on the financing of $264 million to acquire control of 116 struggling radio stations that were accumulated by a man named Dean Goodman, under the name of Digity.
Alpha Media now claims to be the fourth largest radio company in America, which is true if you ignore EMF and look only at number of licenses.
In terms of advertising reach and revenue, Alpha is not. Their collection of stations are in small markets or “rimshot” stations on the suburban fringes of bigger cities. Radio owners that are probably bigger in Revenue (in addition to iHeart, Cumulus and Townsquare?) would include Entercom, Cox, CBS, Univision, Radio One, Salem, Saga, Beasley, Hubbard and Greater Media. Digity and Alpha are not required to disclose financial data (yet).
The deal was funded at LIBOR + 6% according to Tom Taylor. The belief is that once the group of stations are being managed by Larry Wilson’s company, an IPO will be done to satisfy the insatiable demand for small market radio stations. This is the second time around – the first was a similar company called Citadel, which Larry sold. Once Citadel decided it was ready to swallow ABC Radio, Citadel immediately failed and was acquired by our friends at Cumulus Media.
So Digity now exists only as a name on FCC licenses. Whether the licenses will be changed to Alpha Mecia isn’t yet clear. Looking from afar, Alpha seems much better managed than Digity, so it may have a chance to succeed.