The sale of KBLX-FM out of bankruptcy from Inner City to Entercom was announced in early April 2012, but Entercom wasn’t the only company to make an offer. An unknown party, rumored to be Cumulus, also made a play for the station. The United States Bankruptcy Court for the Southern District of New York said Inner City acted appropriately in accepting Entercom’s offer over that of its competitor.
The deal as announced will send KBLX-FM to Entercom for $25M, sending it into a four-FM cluster along with popular music outlet 96.5 KOIT-FM, sports The Game 95.7 KGMZ-FM and classic rock station 98.5/102.1 KUFX-FM.
The court said, “…the Debtors have thoroughly and fairly marketed the Station Assets and conducted the related sale process in good faith and in compliance in all respects with the Bid Procedures and the Bid Procedures Order. All interested persons and entities have been afforded a full, fair and reasonable opportunity to (i) conduct due diligence, (ii) submit bids and to submit higher or otherwise better bids to purchase the Station Assets, and (iii) object or be heard with respect to the Motion and the relief granted by this Order. The Bid Procedures were non-collusive, designed and implemented in good faith, substantively and procedurally fair to all parties, and obtained the highest and best value for the Station Assets for the Debtors, their creditors and their estates. In accordance with the Bid Procedures, the Debtors determined that the bid submitted by the Buyer and memorialized by the Entercom APA is the best and highest bid for the Station Assets.”
The court noted that Inner City had ample reason to select the Entercom offer, not the least of which was that no other entity offered greater economic value in exchange for the station. The Court also noted that in Inner City’s estimation, Entercom is a company likely able to complete the deal in a timely manner and that it was offering greater than the liquidation value of the station.
At the time of the acquisition announcement, Entercom’s President and CEO David Field stated: “We could not be more pleased to add KBLX-FM to our San Francisco radio line-up. KBLX is the leading urban radio station in the San Francisco market and has a long history of producing distinctive and compelling programming. The addition of KBLX strengthens our competitive positioning in San Francisco and enhances our ability to provide outstanding content to our listeners and broad audience reach and effective marketing opportunities to our advertisers.”