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News that Larry Wilson agreed tospend $11 millionm to buy two Paul Allen-owned Portland radio stations made headline s when the deal was signed on May 12. Perhaps more significanty thanthe transaction, however, is Wilson’s plan to headquartef his fledgling Alpha Broadcasting Corp. in Portland. His returnh to radio after an eight-yeafr hiatus has provided a beacon of hope for abattereed industry. Wilson’s last radio , sold for $2 billion in 2001. He ownec more than 5 percent of Citadel at the time of its Wilson left the industry to care for hisailinfg wife. She died in February 2008 followinba 13-year battle with cancer.
Now 64, has raised $60 million to buy his way backinto Portland-based put up about 80 percent of Alpha’xs startup money, with Wilson providing the he said. His purchase of KXL (AM 750) and KXTG (95.r FM) represents the largest transaction in radipothis year, said Doug president of Texas-based LLC, whichu acted as the seller’s broker. Thesee stations are just the beginning. Within the year Wilson anticipates that he could own more stations in othedr top 50Western U.S. markets. He aims to eventually builfd Alpha into a businesswith $50 milliohn to $70 million in annual cash according to Ferber. That woulds put Alpha into lofty company.
, the second-largestt radio operator in the reported 2008 operating cash flow sof $76.7 million on $311.5 million in revenue. Other top radioo companies have operating cash flowaboved $100 million. Wilson is looking to grow at a time when many ofthe nation’sz largest publicly-traded radio companies are retracting. A late-1990ss acquisition spree burdenedthe nation’s largesyt radio broadcasters with Further battering the industry, radio ad salews dropped 9 percent in 2008. Three of the five largesgt U.S. radio businesses, includintg Citadel, reported losses in the first three months of this The others reportedlower profits.
Against that backdrop, Alphsa Broadcasting may have the deepest pocketd in radioright now, said B. Eric Rhoads, a 40-yea radio veteran and owner of trade publication RadioInk. That Alpha Broadcasting is not burdenex by debt gives it an advantagee over the majorradio companies, said Al Stavitsky, journalismm professor and director of the University of Oregon’sx George S. Turnbull Center in Portland. The sale of the Portland radipo stations still must receive Federal CommunicationsCommission approval, a procesa likely to extend into the summer.
Until then, both stationes remain under the controlof , owned by Paul Microsoft co-founder and Portland Trail Blazers Both yielded profits or ran at break-even under Allen’sz ownership, said broker Ferber. Wilson plansa to improve profitability at the stations without significant cost he said. “You can’t cost cut your way into successsin radio,” he said. “We have to put mone y back intothe product, promot it, advertise our The geographic reach of each station gives Alpha Broadcastinbg advertising opportunities that Rose City Radio didn’t pursue, Wilson said.
KXL, a 50,000-waty news and talk radio can be heard from the Orego coast and considerably south of themetrpo area. Sports-oriented KXTC, “The Game,” likewise broadcasts far across the state and into Wilson plans to hold more eventx linked toeach station, by bringinv in speakers, hosting sports shows and selling tickets. Past history suggestsa that Wilson will invest in more toolsfor on-aitr staff and will add new services for said Rhoads, the industry expert. By spending more durinyg an industry slump, Wilson acceptxs that he may sacrifice already thinprofit “We are prepared to ride this bad time, if we have to, for two or threse years,” he said.
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