On-the-air Niche
Radio: Two entrepreneurs turned their backs on cable TV to go on a timely buying spree in radio land.
Published on September 23, 1996SUN STAFF Timothy J. Mullaney | © 1996- The Baltimore Sun
Benchmark Communications of Baltimore yesterday closed a deal to buy its sixth radio station in two weeks, agreeing to pay $4.1 million for WSCQ-FM in Columbia, S.C. The adult standards station will be Benchmark’s fifth property in that market.
Benchmark, like most radio companies, has been on a buying binge since the new telecommunications law dropped limits on how many stations a single company can own and loosened rules on how many stations a single player can own in one market.
This month, Benchmark said it would pay nearly $15 million for four stations in Jackson, Miss., the nation’s 118th-largest radio market, and paid $1.9 million for a station in Shreveport, La.
“There are fewer radio stations in southern markets,” Benchmark general partner Bruce R. Spector said. “This makes us the first operation in the market to have three FMs. It affects both revenue and expenses. It’s easier to save if you can operate them all in one building with one staff. The more subtle effect is on the revenue side.”
Having a lot of stations in one market helps each station sell more advertising, he said, because it allows the owner to cover a wide range of formats in one market. Also, a profitable group of stations gives an owner the room to risk programming changes at weaker-performing outlets, he said.
That basic logic has led to deals as big as the $3.9 billion purchase of Infinity Broadcasting Corp. by Westinghouse Electric Corp.’s radio unit. Benchmark is one of several companies attempting the same consolidation play in smaller markets, where they don’t have to compete with giants, said James H. Duncan Jr., publisher of Duncan’s American Radio Inc. in Indianapolis.
“The strategy throughout the industry is to build your portfolio within each market to the extent the law allows,” Duncan said. “In the top 10 markets, it takes enormous amounts of money, even billions.”
Benchmark, which owns WWFG and WOSC on Maryland’s Eastern Shore, concentrates on southern markets that it says are smaller but growing faster than major markets like New York, Chicago or Detroit. The company now has 33 stations in nine markets and annual revenues of about $45 million.