Connoisseur Media’s purchase of four Long Island radio stations has drawn the attention of many in the Radio industry.
The $23 million deal achieved by Jeffrey Warshaw, Westport-based Connoisseur’s CEO, impressed Roger Rafson, owner of Commercial Media Sales, in Pittsburgh, a specialist in radio station transactions. “It’s certainly one of the largest deals of 2012. For us in Radio, it shows that the recession is behind us and indicates that the banks are lending money,” Rafson said. “Stations in markets like Long Island are profitable. It’s rare to see a sale when stations are profitable. I’ve got 30 to 40 stations for sale now, and four or five awaiting approval by the Federal Communications Commission.”
Connoisseur, which owns and operates 22 radio stations in eight U.S. markets, adds WKJY 98.3-FM, WBZO 103.1-FM, WIGX 94.3-FM and WHLI 1100-AM in the purchase of the Long Island Radio Group from Al Kaneb, President and CEO of Barnstable Broadcasting Inc., which entered into the Long Island market in 1984. Kalil & Co. and Bergner & Co. were brokers on the deal, which is pending approval by the FCC.
“We are so excited to have the privilege of continuing the legacy of service that Barnstable has created on Long Island,” Warshaw said. “These are great operations with terrific people. I was raised on Long Island and grew up listening to these stations.” The Long Island stations were attractive because of their strong financial footing, Warshaw said, commenting that he expects to retain the 55 full-time employees and current formats. He operates stations in Bloomington, Ill.; Huntington, W.Va.; Billings, Mont.; Wichita, Kan.; Erie, Pa.; Omaha, Neb.; Rapid City, S.D.; and Bismarck, N.D. “They do a tremendous amount of revenue, and they are very profitable,” said Warshaw, who operates Ferocious Media, a digital advertising business in Westport.
Kaneb credited his employees for the financial success of the stations. “We are happy to be passing the torch to a committed broadcaster like Connoisseur,” he said in prepared comments. General Manager Dave Widmer said he expects the stations to continue their service to their communities and advertisers under the new ownership.
The key strategy for radio stations in smaller markets should be to localize content — something that large stations within broadcast range of those communities cannot do, said Dr. Rick Wright, a professor at the Newhouse School of Communications at Syracuse University who focuses on the Radio and television industry. “They’ve got to develop a strong local broadcast impact — a niche that is heavily local,” he said, adding that for stations affected by New York City stations, it is a logical option. The Long Island stations have done that with their own on-air personalities who develop their own followings.
Warshaw wouldn’t disclose the cash-flow multiples for the Long Island stations, but Rafson said a purchase price of a Radio operation is typically five to nine times the cash flow (revenue minus operating expenses). radio stations can be an attractive purchase because of low overhead costs and their ability to adapt to changing advertising opportunities, Rafson said. “Social media is an opportunity for radio stations to become more connected with their audiences,” he said.
By: Richard Lee
Published 06:59 p.m., Friday, April 13, 2012