SALT LAKE CITY — Utah-based Deseret Management Corporation has entered into an agreement to sell 17 of its Bonneville International radio stations in four cities across the country.
DMC, a for-profit arm of The Church of Jesus Christ of Latter-day Saints, will sell stations in St. Louis, Chicago, Cincinnati and Washington, D.C., to Hubbard Broadcasting Inc. Under terms of the purchase agreement, the Minneapolis-based company will acquire the stations for $505 million.
The sale is expected to be finalized in April or May pending FCC and anti-trust approval. Neither company expects any snags.
"Bonneville has built all its media properties into profitable, well-managed media outlets in lucrative markets, which has made them attractive to many potential buyers through the years," said Mark Willes, DMC president and CEO.
As part of the transaction, Bruce Reese, Bonneville president and CEO, and Drew Horowitz, Bonneville chief operating officer, will move to Hubbard Broadcasting.
DMC will retain its stations in Salt Lake City, which include KSL Newsradio (102.7 FM and 1160 AM), KSFI (FM 100) and KRSP (Arrow 103.5). It will also retain its seven Bonneville stations in Los Angeles, Phoenix and Seattle with their managers and staff.
Ginny Morris, who will become the chairwoman of the newly created Hubbard Radio LLC, called it an exciting opportunity for the company.
"We have long admired the good work, reputation and leadership of Bonneville International and its management team and feel honored to welcome these great stations into the Hubbard family of companies," she said.
"The radio business seems to be steady and strong and we don't see that changing in the future."
Willes said Hubbard Broadcasting is a well-respected business that represents many of the same values Bonneville embraces.
"We felt Hubbard's long-term hold strategy was the right fit for these stations," he said.
Family-owned Hubbard operates 12 television and four radio stations in Minnesota, New York and New Mexico. As result of the sale, Hubbard Radio will add 547 employees, bringing its full- and part-time workforce to 701.
"This is a big bite for us, but it's a business we know well," Morris said.
Hubbard approached DMC about buying the stations last August and negotiations proceeded fairly quickly. Willes said the sale price was higher than DMC expected.
"It was a strong price for us and a doable price for Hubbard because of the earning potential," he said. "The stations we're selling are very profitable."
Stations included in the sale are: WARH, WIL, WXOS (St. Louis); WDRV, WILV, WTMX, WWDV (Chicago); WTOP, WFED, WWWT, WTLP, WBHQ, WWFD (Washington, D.C.); WKRQ, WREW, WUBE, WYGY (Cincinnati). That stations comprise a variety of formats including music, news and sports.
Only a small amount of the sale proceeds will go to DMC because the value of the stations lie in their broadcast licenses, which are held by the LDS Church, Willes said. "Most of the funds from this go to the church."
Willes said the sale will conclude the massive changes that have occurred in recent months at DMC media companies Deseret News, Deseret Digital Media, KSL and Bonneville Communications.
"There's now no other shoe to drop," he said.
DMC plans to expand the regional and the online presence of the radio stations it is retaining. DMC's websites in its western markets reach more than 7 million combined unique users with more than 250 million combined page views each month.
"Keeping the West Coast stations made a lot of sense,' Willes said. "It is evident that a strong regional component is vital to the success of combined digital and broadcast marketplaces."
As part of this transition, Jeff Simpson will now oversee the remaining Bonneville markets. Simpson has been with DMC since 2004 and is currently the COO of KSL Broadcasting.
"We have excellent market managers and staff in each Bonneville location and I look forward to working with them to achieve their market goals," Simpson said. "We will maintain our commitment to serve the communities we broadcast in and provide the quality sports, news and entertainment our listeners have come to expect."
e-mail: romboy@desnews.com