Broadcast radio group Bonneville International is selling 17 radio stations in Chicago, St. Louis, Cincinnati and Washington, D.C. to Hubbard Broadcasting Group for $505 million. The largest such transaction in the radio business to date in 2011, the deal will more than quadruple the size of the Hubbard workforce from 164 employees to over 700 employees. Two Bonneville executives are also moving to Hubbard as part of the acquisition.
The deal will expand Minnesota-based Hubbard's footprint in the Midwest; the company also owns radio and TV stations in New Mexico and New York State. Salt Lake City-based Bonneville will retain its core radio stations in Utah, Arizona, California and Washington State.
After several lean years, the radio business seems to be enjoying a tentative recovery, fueling an increase in M&A activity, according to BIA/Kelsey, which tracks local media transactions.
After a trough in 2008-2009, the number of radio stations sold jumped 31.7% from 660 in 2009 to 869 in 2010, according to BIA/Kelsey. The pace of transaction activity increased as the year ended: December 2010 saw 98 radio stations change hands, up 196% from just 33 in December 2009.
While all this activity suggests new vitality in the radio business, BIA/Kelsey also noted that the total value of radio station deals increased only slightly, meaning the average value of each transaction was significantly lower. The total value of radio station deals edged up just 2% from $347 million in 2009 to $354 million in 2010.