A contract has been signed and an application is being filed with the FCC for the transfer of radio stations WANG-AM, WTNI-AM, WCPR-FM, WGBL-FM, WQBB-FM, and WXYK-FM, all in Biloxi, Miss., and FM translator W278CE at 103.5 MHz in Biloxi, from Alpha Media to TeleSouth Communications.
The news, released late Thursday by broker of record Kalil & Co., came before the filing of a divestiture asset purchase agreement with the FCC on Friday.
The APA has fresh details on what TeleSouth is paying Alpha … and how TeleSouth must immediately divest one of those stations to comply with current market ownership.
A second APA reflecting that deal was also filed Friday with the FCC. It seems very “Sinclair”-esque, on paper.
The primary transaction involves the sale of two AMs and four FMs in Biloxi-Gulfport-Pascagoula, Miss., by Alpha obtained in a key formative deal that formed Alpha’s predecessor company, L&L Broadcasting, under the direction of Larry Wilson. In May 2013, L&L closed on a $21 million purchase of all but two radio stations owned by David Benjamin’s Triad Broadcasting. Triad had 32 stations in five markets; 30 stations went to L&L.
Today, Wilson is solely a member of the Alpha Board, having stepped down in July 2018 amid reports of financial uncertainty and Wilson’s health; Wilson was visibly under the weather at the 2018 NAB Show in Las Vegas in early April.
It is the former that is likely Alpha’s key concern, with high leverage on the lips of multiple brokers.
In late September, with company executives hidden from public view in lower level meeting rooms, word spread like wildfire at the 2018 Radio Show in Orlando that Alpha had reached a deal to divest its crown jewel in the company’s $264 million purchase of Digity, LLC.
The deal talk proved to be true: In a brief announcement made during the Radio Show, Portland, Ore.-based Alpha Media reached an agreement in principle to sell its six radio stations in West Palm Beach to Hubbard Radio. The price: $88 million.
Brokers and industry observers knew the divestment parade was just starting. It continued Thursday (12/13), with the TeleSouth transaction, valued at $2.5 million.
A $125,000 escrow payment is being held by Kalil & Co. on behalf of Alpha.
Alpha Media President/CEO Bob Proffitt commented, “We are happy our group of great broadcasters in Biloxi/Gulfport are being sold to a good operator located in the state of Mississippi that is dedicated to live and local. We have a special place for everyone at these stations and wish them the very best.”
Serving as Alpha’s legal counsel in this transaction is Kathleen Kirby of Wiley Rein LLP.
The legal counsel representing Telesouth is M. Scott Johnson of Fletcher Heald & Hildreth.
Alpha Media will be left with 207 stations in 45 markets pending the completion of all of its announced transactions.
Mississippi-based TeleSouth is headed by Stephen Davenport. It owns or operates 21 stations in 12 different markets — including WOSM-FM 103.1 in Ocean Springs, Miss., a 50kw Class C2 facility that serves as the Biloxi arm of Telesouth’s “SuperTalk Mississippi.”
The Alpha buy would give Telesouth five FMs. Present FCC local ownership subcaps won’t permit that, with four the limit for a market the size of Biloxi. The NAB and a host of broadcasting companies are pushing the FCC to eliminate ownership caps in a market like Biloxi — theoretically allowing Telesouth to own every radio station.
While that may or may not happen, as iHeartMedia and Salem Media Group are against the plan, Telesouth must play by the rules.
As a result, it is opting to keep WOSM and its booming signal, which reaches Mobile to the east and the Louisiana border to the west.
What station is being immediately spun by Telesouth?
That would be Class A WXYK-FM 107.1, a Top 40 station branded as “The Monkey” that features the syndicated Kidd Kraddick Morning Show in AM drive and Tino Cochino Radio in afternoons.
Telesouth is selling WXYK to Port Broadcasting for $300,000.
But, is this a “Sinclair”-esque spin that will gain Commission scrutiny?
Port Broadcasting is led by Donald Stewart Davenport — the nephew of Telesouth head Stephen Davenport.
Telesouth’s APA states that, as a nephew, Donald falls “outside the definition of family members” as he is “an adult and an independent established businessman.”
Does that involve radio? No.
Donald Davenport is the CEO of BARInet and SMS Healthcare Management, and has held this role since 2005. BARInet is a provider of “employer obesity solutions” within the specialty field of bariatric surgery. The email address listed in the Port Broadcasting APA reflects Davenport’s presence at South Mississippi Surgeons. The physical address shown for Port Broadcasting is Donald Davenport’s home, in a largely rural area of Vancleave, Miss.
That may not pass muster with the FCC, given Sinclair Broadcast Group’s failed attempt to merger with Tribune Media that involved an initially proposed sale of stations in Dallas and Houston, respectively, to Cunningham Broadcasting, an independently operated entity with an ownership structure that highly involves the heirs of Sinclair’s founder.
FCC Chairman Ajit Pai on July 16 announced the circulation of a draft hearing designation order (HDO) regarding Sinclair’s merger with Tribune Media. Sinclair reacted by scratching the Dallas and Houston deals. It also negated the controversial spin-off of Tribune’s Chicago flagship property, WGN-9, to an entity which listed Steven B. Fader as its head. Fader has a close relationship with David D. Smith, who served as President/CEO of Sinclair until stepping aside from day-to-day duties in January 2017.
With this week’s approval of a Notice of Proposed Rulemaking by the FCC that formally opens debate and discussion on any amendments to its local ownership caps, most radio industry observers anticipate a loosening of market subcaps. Thus, Port could easily spin The Monkey back to Telesouth or enter into an LMA with Telesouth when permissible. Or, it could remain wholly independent despite the close family ties.
TeleSouth will be acquiring the following stations from Alpha Media:
WANG-AM operates at 1490 kHz, with 1.0 kW day and 1.0 kW night.
WTNI-AM operates at 1640 kHz, with 10.0 kW day and 1.0 kW night.
WCPR-FM operates at 97.9 MHz, with 50 kW at 466’ HAAT.
WGBL-FM operates at 96.7 MHz, with 4.3 kW at 390’ HAAT.
WQBB-FM operates at 105.9 MHz, with 25.0 kW at 312’ HAAT.
WXYK-FM operates at 107.1 MHz, with 2.8 kW at 400’ HAAT.
Kalil & Co. is the exclusive broker for this transaction.
