As the broadcast industry gears up for big advertising dollars heading toward the fall elections, one of the nation”™s largest radio companies has quietly set up headquarters in Greenwich under new management.
In August, Townsquare Media L.L.C. completed its acquisition of Gap Broadcasting and its affiliates, adding more than 110 radio stations west of the Mississippi River.
The companies did not disclose financial terms.
Townsquare says the deal makes it overnight the fourth largest owner of radio stations in the United States with some 170 stations in all. The company does not own any stations in Connecticut; in upstate New York it has more than a dozen including its largest single station in Buffalo; and an Albany station that is an affiliate of Bristol-based ESPN.
The company is led by Steven Price, CEO of FiveWire Ventures L.L.C. whose Arch Street office in Greenwich is now the headquarters of Townsquare. Before starting FiveWire, Price was a senior managing director in the New York City-based private equity investment firm Centerbridge Partners L.P.
Price declined an interview, directing questions to Alex Berkett, Townsquare”™s senior vice president for business development and acquisitions.
“We obviously made a bet on radio, and I think we bring a fresh outlook to radio,” Berkett said. “We think more as a local media company than as a broadcaster.”
Citing competitive concerns, Berkett declined to divulge specifics on Townsquare”™s strategy going forward. The company expects to employ as many as 30 people in Greenwich, from about a dozen today.
Founded in 1996 as Regent Communications in Cincinnati, Ohio, the company piled up nearly $300 million in losses between 2005 and 2009, leading it to file this past March for Chapter 11 bankruptcy protection from creditors. After being acquired by Los Angeles-based Oaktree Capital Management L.P., the company has since quietly moved its headquarters to Arch Street in Greenwich while adopting the Townsquare name.
As part of its emergence from bankruptcy protection, Townsquare obtained a $95 million line of credit arranged by Norwalk-based GE Capital.
Townsquare was hardly alone in struggling during the recession, faced with the double whammy of both the collapse of the economy in the fall of 2008 coupled with the evaporation of political advertising dollars following the November elections that year.
In 2009, the overall radio industry saw revenue drop 18 percent from the year before, according to the Radio Advertising Bureau.
For its part, Gap Broadcasting had attempted to grow rapidly by purchasing stations from markets that Clear Channel Communications was exiting, even as the economy went into the tank. After losing $4.1 billion in the first half of 2009, Clear Channel trimmed its losses to $365 million in the first six months of this year, while increasing revenue 4 percent to nearly $2.8 billion.
In a recent conference call, executives with New York City-based CBS Corp. said local advertising is coming back at a faster pace than expected, but still has a ways to go. Stations are booking ad dollars earlier than in previous quarters, however, which CBS takes as a sign of confidence that advertisers are guessing rates will go up and are locking in bargains.
Still, despite the nascent recovery, CBS hopes to sell off some stations to opportunistic buyers.
CEO Leslie Moonves said the company has previously considered divesting some of their radio and television stations and it may be time to look at that again. “We still intend to do that but ”¦ there”™s no great hurry to do that, and unless we get the right pricing for that, we”™re not going to do that. However, there appears to be some nice activity now in some of the pricing, so I wouldn’t be surprised if over the next six months to a year, we do divest some of our radio stations in a few markets and maybe one or two television stations.”
