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SUN STAFF Timothy J. Mullaney
Published on November 4, 1996
© 1996- The Baltimore Sun
Benchmark Communications of Baltimore will announce today
that it has agreed to buy two radio stations in Alabama's
capital city, bringing to 34 the number of stations the fast-growing
local group either owns or has a contract to buy. The local
company will buy WZHT-FM and WMCZ-FM, both in Montgomery,
Ala., from a group of Mississippi-based investors, Benchmark
general partner Bruce Spector said. Both stations use an urban
music format, performed mostly by black artists and targeted
to a mostly black audience.
The price, based on an undisclosed formula in the contract,
is expected to be $17.75 million, Spector said. The deal follows
Benchmark's deals in the past two months to buy stations in
Jackson, Miss., and in Columbia, S.C., both of which are state
capitals.
``State capitals are very stable markets because of the state
governments,'' Spector said. ``If you pick up a map, Montgomery
and Jackson are close together, they both have the same format.
I'm excited by the idea of having the No. 1 station in three
markets, all of which are urban.''
The deal continues Benchmark's push to take advantage of
the federal telecommunications law passed in February, which
increases the number of stations a single owner can control
in a single metropolitan market. The deal will give Benchmark
a 28 percent share of radio advertising in Montgomery, the
nation's 109th-biggest radio market ranked by revenue, Spector
said.
The company's consolidation strategy reflects an industry
trend that has taken off this year. BIA Publications Inc.,
a Virginia firm that gathers and sells data on the radio industry,
said 1,836 U.S. stations have been sold for a total of $13.1
billion since the law was signed by President Clinton on Feb.
8.
By controlling several stations in one place, new owners
can cut costs by merging sales and administrative staffs,
and can also use stations with higher ratings to promote weaker
performers. Both strategies help the buyers make bigger profits
than the previous owners when they work, and Benchmark is
betting they can work even across metropolitan lines when
stations in different cities use the same programming format.
``You can share a lot of programming and consulting advice,
and sales-wise you can do a lot,'' Spector said. ``You can
go to an advertiser and offer them the same demographics in
one market and in a neighboring market. Very few major businesses
serve only one market anymore.''
Benchmark will own stations in 10 markets, almost all in
the southern United States, when the Montgomery deal closes,
which is expected around February. The firm has focused on
small markets both to avoid direct competition with much larger
players that are consolidating the ownership of big-city radio
stations and because it thinks most southern markets will
grow faster in coming years than mature markets around major
cities.
Spector has said the company would like to go public soon,
but it wants first to acquire or merge with another company.
Pub Date: 11/04/96
JOHN MAKELY : SUN STAFF Bruce Spector is general
partner of Benchmark Communications, which wishes to increase
its radio stations to 34.
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