Jacor’s Nationwide

B'caster on radio group bandwidth for $620 mil

NEW YORK — No. 3 radio group Jacor Communications Inc. snapped up radio broadcaster Nationwide Communications for $620 million in cash Monday in the latest stage of the frenzied consolidation in radio broadcasting.

Jacor preempted an auction of Nationwide, which had been under way in recent weeks, people close to the deal said. Other radio groups looking at Nationwide, which is being sold by Nationwide Mutual Insurance Co., included CBS, Chancellor Media and Walt Disney Co.’s ABC.

These companies were given a chance to top Jacor’s bid, however, and did not pursue it. Jacor stock fell $3.25 to $42.87 amid Monday’s heavy sell-off.

In their league

Jacor had been looking for an acquisition to keep itself in the same league as CBS and Chancellor, the top two radio broadcasters which both made big acquisitions recently. The Nationwide deal adds 17 radio stations in eight sizable markets such as Dallas, Houston, San Diego, Baltimore and Phoenix to Jacor’s 172.

But the Nationwide stations generally underperform the rest of the industry. Wall Street sources said the group’s cash flow — earnings before interest, taxes, depreciation and amortization — was about $14 million on revenue of $96 million. Most major radio groups have margins closer to 40%, more than double cash flow earned by Nationwide.

Losing money

Part of the reason Nationwide’s margins were so low was that the company had been buying up stations in the past couple of years that were losing money. Excluding these stations, Nationwide’s cash flow margins were closer to 30%, sources say.

Still, Jacor will have to try and improve all the group’s stations. “They were very poorly run,” said an industry source.

“The margins at Nationwide were very low, and I would assume that they could be improved dramatically,” Lehman Bros. analyst Tim Wallace said.

Jacor CEO Randy Michaels said in a statement that Nationwide had “done a tremendous job assembling high-quality signals in strategically placed markets. With our … strong presence across many of these broadcast areas, Jacor is ready to take the Nationwide stations to the next level.”

More Biz

  • EFM 1st European Film Politics Seminar

    Berlin: 1st European Film Politics Seminar - Protecting Independent Film Production

    Leading industry reps gathered on the opening day of Berlin’s European Film Market for what is certain to be a continuing discussion about leveling the playing field for independent producers across Europe and demanding greater engagement in the sector from global players. The 1st European Film Politics Seminar aims to set the political agenda of [...]

  • Harvey Weinstein (C) arrives to New

    Harvey Weinstein Jury Note Stirs Frenzied Speculation on Verdict

    A note from the jury in the Harvey Weinstein trial on Friday afternoon set the media and legal worlds abuzz with speculation about the verdict. The note suggested that the jurors were deadlocked on the two most serious charges — predatory sexual assault — but had reached a unanimous consensus on three other counts, of [...]

  • Naim McNair Named Def Jam Senior

    Naim McNair Named Def Jam Senior VP of A&R

    In what may be the first signal of the next era of Def Jam Recordings, Naim McNair has been named senior VP of A&R at the company. The move comes just hours after it was confirmed that Paul Rosenberg, chairman and CEO of the label since January of 2018, is leaving his post at the [...]

  • Paul Rosenberg

    Paul Rosenberg Stepping Down as Head of Def Jam

    UPDATED: Paul Rosenberg, chairman and CEO of Def Jam Recordings since January of 2018, is leaving his post at the company, a source close to the situation confirms to Variety. Jeff Harleston, general counsel for Def Jam parent company Universal Music Group, will serve as interim chief until a new CEO is appointed; he will [...]

  • Baby Yoda - The Child Animatronic

    Hasbro's Adorable Baby Yoda Animatronic Toy Is Already Sold Out on Disney's Online Store

    The Force remains strong for toys based on Baby Yoda, the breakout star of Disney Plus original series “The Mandalorian.” Less than a day after becoming available for pre-order, Hasbro’s new $59.99 Baby Yoda animatronic toy is no longer available on Disney’s official online store: As of Friday morning, Shop Disney listed it as “sold [...]

  • BTS Leads Spotify’s New Music Friday

    BTS Leads Spotify’s New Music Friday Playlist Rebrand

    Spotify has launched a global rebrand of its popular New Music Friday playlist, which this week features BTS, The Weeknd, Noah Cyrus, Trippie Redd, Kenny Chesney, Rei Ami and others. The revamped playlist, which has 43 versions worldwide, has more than 3.5 million followers in the US and eight million globally. New elements include a [...]

More From Our Brands

Access exclusive content