Merger Means Ripple Effects for Beasley, iHeartMedia

Reshuffling in Boston while wholesale changes come to Richmond and Chattanooga

Though the proposed merger is making big headlines, the Entercom and CBS Radio deal will do more than create a media and entertainment company with a nationwide footprint.

The decision will shake up several media markets across the country. For the Beasley Broadcast Group, the move will allow this large- and mid-market broadcaster to continue its focus on “creation of premium local programming.” Under the deal, Beasley is expected to exchange Boston’s WMJX(FM) and $12 million cash for WBZ(FM), Boston. WBZ is the official home for major football, baseball and hockey teams in the sports radio-friendly Boston area market, notably the New England Patriots, Boston Bruins and Boston Celtics. The acquisition complements Beasley’s five other radio stations and digital operations in the Boston market, the company said.

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The agreement to add WBZ(FM) to the Beasley portfolio addresses the company’s strategic objectives — to serve the community, diversify operations, manage risk and improve financial results, said CEO Caroline Beasley.

“Focusing on strong core programming and targeted original local content is the foundation of Beasley’s operating strategy,” she said in a statement, adding that the acquisition of the station gives Beasley access to marquee sports programming and a prominent fan base.

“Boston fans love their strong local teams and 98.5 The Sports Hub [WBZ(FM)] was the first Boston FM sports talk radio station to address this interest,” she said.

The exchange is expected to be accretive to the company at closing, she said, and will enhance shareholder value.

iHeartMedia will also reap benefits if the Entercom/CBS Radio merger is approved, the company said.

iHeartMedia announced it agreed to a strategic station exchange with Entercom across four U.S. markets that would see iHeartMedia acquire seven radio stations from Entercom in Boston and Seattle. Under the deal, Entercom will acquire 10 stations from iHeartMedia in Richmond, Va., and Chattanooga, Tenn. 

The stations coming under the iHeartMedia umbrella include Boston stations WRKO(AM), WZLX(FM), WKAF(FM) and WBZ(AM) as well as Seattle stations KZOK(FM), KJAQ(FM) and KFNQ(AM). WRKO and WBZ in Boston are both legacy stations with lengthy histories dating from the early 1920s. All of these stations will also find a new home on the company’s iHeartRadio streaming music and live radio service, which iHeartMedia says has more than 100 million registered users.

“We’re excited to add these stations to iHeartMedia across broadcast, digital, mobile, social and our spectrum of iHeartRadio-branded live events,” said Bob Pittman, chairman and CEO of iHeartMedia.

The exchange is an opportunity for the media company to expand its presence and further strengthen its position in Seattle and Boston, which are two markets where iHeartMedia does not have a full complement of stations, Pittman said.

Just as Entercom President and CEO David Field did when announcing the agreements, Pittman also addressed the “difficulty” of letting go of 10 stations in the smaller markets of Chattanooga and Richmond. “We have to give up two smaller markets that have been an important part of this company,” he said. “This was a difficult decision for us, but we think we arrived at the best decision for our company.”

Assuming the Entercom/CBS Radio merger gets a green light from the Federal Communications Commission, both the iHeartMedia and Beasley transactions are expected to close in the first quarter of 2018.

 



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