Benchmark Acquiring 5 More Radio Stations

Fast-growing Benchmark Communications is adding to its radio-station collection, agreeing to buy five more stations for $16.9 million, officials said yesterday, and coming close to cementing several other deals. In two separate transactions, Benchmark agreed to buy four urban-format stations in Jackson, Miss., for $15 million, and a country station in Shreveport, La., for $1.9 million.

Once a cable-TV operator, Benchmark since 1991 has seized on federal radio deregulation by assembling a portfolio of 32 stations in nine markets, counting the Jackson and Shreveport properties.

It hadn’t been in Jackson before.

“The industry’s consolidating like crazy,” said Bruce R. Spector, general partner of the Baltimore-based firm.

“What’s happening to our company is just a small picture of what’s happening to media in general, and many markets are being reduced from many operators to two or three.”

Before 1992, no company could own more than one AM and one FM station in each market, and the Federal Communications Commission limited how many stations one entity could own nationwide, too.

Now, as the government opens all forms of telecommunica- tions to more competition, radio operators can own as many stations as they want nationally and five or more in even small cities. Buyers have been snapping up stations and consolidating their ad staffs, engineering staffs and other overhead.

Benchmark, which operated cable-TV systems in Loudon County and other Northern Virginia areas in the 1980s, has joined the buying spree, focusing on small and medium-size markets including Roanoke, Va., Dover, Del., and Winchester, Va.

Benchmark also owns WWFG and WOSC, stations serving Salisbury and Ocean City in Maryland.

With about $45 million in annual sales, Benchmark “is not a very large player, but that doesn’t mean there isn’t room for them in smaller markets,” said Lucia Cobo, editor in chief of Radio World, a trade newspaper based in Falls Church, Va. Clear Channel Communications of San Antonio has the most U.S. stations, with well over 100, she said.

Benchmark contracted to buy the four Jackson stations from Chrysler Capital, which had foreclosed on previous owners. The stations are: WJMI-FM, WKXI-FM, WKXI-AM and WOAD-AM. The FM Shreveport station, with a new license and no assigned call letters yet, is owned by Port City Communications of Shreveport.

Both deals require FCC approval and are expected to take a few months to complete. Each will be financed with Benchmark’s existing line of credit, but the company has been considering raising capital with a public stock offering, which could happen later this year or early next, Spector said.

Selling stock “is something that radio groups have discovered in the last couple of years,” Cobo said.

“You’ve seen a few of them go out and try it, but it hasn’t really taken off.”

Benchmark likes smaller markets because costs are lower, because they’re often growing faster economically and because under the new rules one player can sometimes own half the stations in one city, said Spector, a former partner with Venable Baetjer and Howard, the Baltimore law firm.