Following confirmation yesterday of its $ 40 million acquisition of “Pirate Radio” station KQLZ-FM from Westwood One, sources said Viacom Intl. may replace the outlet’s hard-rock sound with a “young country” format.
Viacom declined to comment on its plans for the station following the announcement of the deal, which had been expected (Daily Variety, March 26).
Under the purchase agreement, Viacom will permit Westwood One to retain the station’s receivables — ad inventory that is sold but not yet collected — until the Federal Communications Commission approves the transaction.
Neither party would comment on speculation that Westwood would retain 120 minutes of advertising time per week in exchange for the lower price — Westwood purchased the station, then KIQQ-FM, for $ 56 million in 1989 — but Viacom indicated that it intends to forge a “strategic alliance” with Westwood. Details will be announced in the coming months, the company said.
The sale of the album-oriented rock station, along with Westwood One’s recent $ 50 million sale of WYNY-FM in New York, “represents a significant step forward in reducing debt and improving the company’s capital structure,” chairman Norman Pattiz said.
The $ 90 million raised by the two radio properties will go a long way toward cutting the Culver City-based company’s long-term debt, which stood at $ 167.6 million prior to its sale of WYNY last August (the company incorrectly stated last week that was the debt level following the Gotham sale).
The sales will trim the company’s revenues by an estimated 16% but will halve its debt and cut its annual interest expense by nearly 60%, Pattiz said in a statement.
Viacom Radio prez Bill Figenshu said the acquisition reflects the company’s desire “to optimize business opportunities that have opened up as a result of the recently changed duopoly regulations.”
The revised duopoly rules permit broadcasters to own more than one AM and one FM in the same market. Viacom also owns adult contemporary station KYSR-FM in Los Angeles.