Call it the Empire of the Rising Nephew.Roy E. Disney — a major shareholder in the Walt Disney Co. who also serves as vice chairman of his late uncle’s giant Burbank entertainment conglomerate — is extending his reach into the radio business and becoming a media mogul in his own right. His family’s Shamrock Broadcasting announced Monday that it had completed its previously announced nine-station, $ 300 million-plus deal combining the radio broadcasting businesses of the privately held Burbank-based company with Malrite Communications Group in Cleveland (Daily Variety, March 12). The combination makes Shamrock one of the largest radio broadcasting companies in the U.S., with21 radio stations in 12 of the top 25 markets (including country outlets KZLA-FM and KLAC-AM locally). Move also will reportedly raise its annual radio revenue to roughly $ 150 million. A source close to Shamrock says the company is in “very intense” negotiations to acquire more stations. Some of the properties in the pending deal could reportedly involve duopolies — the term used to describe the Federal Communications Commission’s more liberal rules that permit companies to purchase as many as four stations in a single market. In addition to gaining a foothold in New York and L.A., the nation’s top two radio markets, the Malrite deal will also give Shamrock its first duopoly arrangement. With two existing stations and two new stations in San Francisco, the company is gaining control of the maximum number of stations permitted in that market. Shamrock also picks up station combos in Minneapolis and Cleveland to add to its 12 existing properties (it is selling its Kansas City, Mo., radio stations to another party). Trefoil Capital Investors, an investment fund established by Shamrock Holdings, provided a significant amount of the financing for the Malrite acquisition in the form of convertible preferred stock and debt. Under the deal, Malrite chairman Milton Maltz — who reportedly was burdened by debt and under pressure from banks and bondholders — will hold a minority equity position in Shamrock Holdings and will serve as one of its directors. “We pursued this business combination to take maximum advantage of the liberalized radio ownership rules which became effective late last year,” Shamrock Capital Advisers prez Stanley Gold said in a statement. Radio industry analysts say the Malrite stations should help increase Shamrock’s profitability. “They never really made a hell of a lot of money with the Shamrock stations,” says a radio broker who requested anonymity. “But anything Milt has ever touched is profitable.” Not everyone agrees with that assessment, however. One local market radio source calls the two former Malrite country stations in L.A. “the worst programmed, marketed and advertised radio stations in any major market — especially for ones with the hottest format going in the U.S.” In anticipation of the move, Shamrock announced last week that it would be bringing its own management team to L.A. and to some of its other new stations. The merger only involves the radio operations of the two companies. All of the TV and other non-radio businesses of Shamrock and Malrite were spun off to their respective stockholders prior to the combination of their radio businesses. Shamrock, which owns three TV stations in Texas and Kentucky, is said to be down on that end of the broadcasting business and has been quietly selling off its TV properties. “For the new Shamrock, this is really just the beginning,” says the company’s broadcasting chairman-CEO Bill Clark. “We are very excited about the company’s future prospects.”
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