Hicks, Muse alliance takes minority stake

Z Spanish first investment in ethnicity for firm

The broadcasting units of buyout firm Hicks, Muse, Tate & Furst announced an alliance Monday to invest in ethnic-owned broadcasting entities, the first of which is a 20% non-voting stake in Sacramento-based Z Spanish Media.

Chancellor Media Corp., Capstar Broadcasting and LIN Television Corp., all controlled by Dallas-based Hicks Muse, joined TSG Capital Group in announcing the $25 million investment in Z Spanish Media, the owner and operator of 22 Hispanic format radio stations in California, Texas, Arizona and Illinois.

Z Spanish Media president Amador Bustos will continue to run the company and maintain a significant equity stake.

TSG Capital, a private equity investment firm with a $300 million portfolio, specializes in companies that serve fast-growing, underserved ethnic markets. For the alliance, TSG will serve as lead investor in all of its transactions.

The alliance also reported that it is considering a partnership with a veteran of African-American television to acquire TV properties.

Such a partnership is consistent the alliance’s strategy, which LIN Television CEO Gary Chapman defined as making “available the diverse skills, talents and resources of our companies to help the entities in which we invest build their inherent values for their viewers, customers and the communities we serve.”

LIN TV owns and operates seven network-affiliated stations and has entered into local marketing agreements to run four more.

Capstar is the country’s largest radio broadcaster, operating mostly in mid-size markets, while Chancellor is the country’s second-largest radio broadcaster, operating mostly in large markets.