THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, August 1, 1996 TAG: 9608010433
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: 92 lines
Max Media Inc. of Virginia Beach has vaulted to the top of a rapidly consolidating heap of Hampton Roads radio-station owners with an agreement to buy local stations WFOG-FM and WPTE-FM.
Max Chairman Aubrey E. Loving Jr. confirmed Wednesday that his company signed an agreement to purchase the stations from Sunshine Wireless Co. of Fort Lauderdale, Fla.
Loving declined to disclose the price. But sources familiar with the transaction said Max agreed to pay $15 million for WFOG and WPTE, the latter of which is better known as The Point.
The purchase will bring to four the number of Hampton Roads radio stations owned by Max. The local group, which also includes WNVZ-FM (Z-104) and WWDE-FM (2WD), scored a cumulative 21.5 percent share of the listening audience in the quarterly Arbitron ratings period that ended June 19.
That would put the Max group on top of the local radio ratings pile - just ahead of four stations owned by San Antonio, Texas-based Clear Channel Communications Inc., which scored a cumulative 21 percent share. The Clear Channel stations are WOWI-FM (103-JAMZ), WJCD-FM (CD 105.3), WMYK-FM (Kiss 92) and WSVY-FM (V-107).
Three other station groups each have more than 10 percent of the local listening audience.
The Max purchase is the third major radio deal struck in Hampton Roads this year.
First came Clear Channel's purchase of WOWI-FM and its sister stations from two separate owners. Then, Benchmark Communications Inc. of Baltimore unloaded its three local stations: WKOC-FM and WTAR-AM to Sinclair Communications Inc. of Norfolk; and WLTY-FM to Susquehanna Radio Corp. of York, Pa.
Susquehanna now owns three stations in Hampton Roads. Sinclair has four locally.
The brisk local sales pace is mirrored nationwide. So far in 1996, more than $12 billion worth of radio-station sales have been announced in the United States, nearly triple the $4.5 billion total for all of last year.
All the mergers and buyouts were prompted by a loosening of station-ownership limits approved by Congress as part of a sweeping telecommunications reform bill. President Clinton signed the measure into law in February.
Under the new law, one company is allowed to own as many as seven radio stations (four FM and three AM) in Hampton Roads, up from a previous limit of two AMs and FMs each. In some other larger markets, one company could own even more stations.
``I think this year people have had to make a choice of being a buyer or seller of properties,'' Max's Loving said of the increased limits. ``We chose to be a buyer.''
Tom Taylor, editor of Inside Radio, a daily newsletter based in Cherry Hill, N.J., said a ``land-rush mentality'' has gripped the radio industry. ``You've got a lot of people trying to get as big as they can in each market. It's going to get like retailing, where there's only superstores and mom-and-pop boutiques, and not much in between.''
The clearest sufferers from such consolidations are radio employees.
Loving declined to discuss his company's plans, other than to say that there will be no change in the stations' formats - soft adult contemporary at WFOG, modern adult contemporary at WPTE. But sources said at least one manager at WFOG and WPTE has already been told he will not be retained. As station ownership is consolidated, groups typically slim work forces - finding in many cases they don't need a production manager or sales manager for each station.
Inside Radio's Taylor said bargain advertising rates are becoming another casualty of the radio consolidation trend.
``That's why the American Association of Advertising Agencies is on the warpath about this thing,'' Taylor said. ``What this does is alter the balance of power in radio. Suddenly, there are station groups that you can't buy around if you need to reach a certain demographic.'' That's encouraging radio groups to jack up rates, he said.
One particularly stronghold for Max in Hampton Roads will be female listeners, ages 25 to 54. The Max stations combined would have a 28 percent market share, according to the latest Arbitron ratings, a local ad-agency executive noted. Its next-closest competitor in that demographic would be the Clear Channel-owned stations, which together had a combined 21 percent share.
Sunshine Wireless, in selling WFOG and WPTE, is exiting with a modest gain. It paid a combined $11.5 million for the stations, bought in 1989 and 1994, respectively. Sunshine, principally owned by investor Jeff Greenhawt, is also selling its remaining two stations, located in the Miami-Fort Lauderdale area.
For Max, the purchase is part of a major expansion. It is also in the process of acquiring two radio stations in Greensboro, N.C., plus TV stations in Charleston, S.C., and Tyler, Texas. When the deals are completed, Max will own nine radio stations and six TV stations. It will also manage two other TV stations.
Other investors in the Max group include local broadcast veterans Dick Lamb and John Trinder. ILLUSTRATION: GRAPHIC
FIVE LARGEST STATION GROUPS IN HAMPTON ROADS
SOURCE: Arbitron
[For a copy of the graphic, see microfilm for this date.] by CNB