Cathy Hughes' Radio One Empire Expands, New Stations - More Markets: Grows to 6th Largest Radio Co. in the U.S.

Kabugi, Njunguna
Washington Informer
03-22-2000
Cathy Hughes' Radio One Empire Expands, New Stations-More Markets: Grows t

Radio One Inc., the local radio firm founded by entrepreneur Cathy Hughes,
is joining the ranks of the largest radio broadcasters in the country. This
week the firm announced it has struck three deals that will give it 21 new
stations in 10 markets around the country.

"This makes us not only the largest radio broadcasting company targeting
African-American audiences, but also the sixth largest radio holding
company in the country," said Scott R. Royster, Radio One's executive vice
president and chief financial officer.

"These acquisitions make Radio One a truly national radio company," said
Alfred C. Liggins III, chief executive officer and president of
Lanham-based Radio One. "We have now created the most far-reaching media
vehicle targeting African-Americans in the U.S."

Radio One's purchase of 12 stations from Clear Channel Communications Inc.
for $1.3 billion is the biggest piece in the deal. According to broadcast
industry sources, a deal between the two companies had been expected for
some time.

Clear Channel, the biggest station owner in the country, is seeking to sell
some of its properties in order to gain Federal Communications Commission
approval for its $16.6 billion bid for AMFM Inc.

Radio One's nationally known name will give stations in smaller the clout
to compete more effectively for advertising, said Jacob Barker, an analyst
with TD Securities Inc. in New York. The combined Radio One stations will
be a powerhouse for targeting African Americans. "They're really getting
critical mass reaching urban radio listeners," Barker said.

"Their reach is even greater than household names in urban media like BET
and Ebony," he said. The Clear Channel contingent includes stations in
Cleveland, Dallas, Houston, Los Angeles and Miami. The crown jewel of Radio
One's purchases is KKBT-FM (92.3), the top-ranked urban station in Los
Angeles. Radio One bid aggressively for KKBT and other Clear Channel
properties, and got all the stations it wanted, Liggins said.

In a separate transaction, Radio One is buying Augusta, GA-based Davis
Broadcasting Inc., for $24 million in cash and stock. Davis owns one
station in Charlotte, N.C., and five in Augusta. Charlotte is the
20th-ranked African-American market in the country, while Augusta is the
40th.

The proposed purchase involves WFXA-FM (103), a hit music station known as
"Foxie 103"; WAKB-FM (96.9), an adult urban contemporary station known as
"The Touch"; WTHB-AM (1550), a gospel station; and WAEG-FM (92.3) and
WFXA-FM (100.9), two simulcast R&B oldies stations.

Formats, on-air talent and personnel are expected to remain the same, said
Royster. "It's going to be business as usual," he said. The company also
plans to buy three radio stations and one low-powered television station in
Indianapolis, the No. 31 African-American market, from IBL LLC and Shirk
Inc. for $40 million in cash and stock. The privately held companies, which
operate under the umbrella name Hoosier Radio & TV and are jointly owned by
Bill Mays and Bill Shirk.

Shirk Inc. owns WHHH-FM (96.3) and IBL owns smooth- jazz station WYJZ-FM
(100.9), classic soul station WBKS-FM (106.7) and television station
WAV-TV.

The partners spurned numerous corporate suitors over the years, but finally
determined they could no longer continue independently amid industry
consolidation. They chose Radio One because it has the size to compete on a
national scale and is minority-owned.

"As an African-American business owner, I understood the importance of
maintaining a strong, minority-owned media presence in Indianapolis," said
Bill Mays.

He also owns a local black newspaper, The Indianapolis Recorder, and is
president of Mays Chemical Co.

"We'll just be getting them the resources they need to continue to grow,"
said Liggins. downplayed the loss of local ownership in the Indiana city.
"One of the hallmarks of urban radio is community involvement, and Radio
One has always made that a priority," TD Securities analyst Barker said.

Radio One plans to pursue additional radio station purchases and wants to
build or buy a radio network. The company will not, however, look at
additional television stations, having stumbled into WAV-TV. Shirk insisted
Radio One include it in the deal as a condition of staying on as general
manager of the radio stations.

"I really had to do a sell job on Alfred because he's a radio guy," Shirk
said.

Radio One expects all three deals to close within 60 to 90 days.

The agreements require FCC approval. Royster added the company is looking
to broaden its media portfolio, including supplying eight channels of
programming to X-M Satellite, a new District-based satellite radio
broadcaster and a new radio-network. On the Internet, the company plans to
build web ventures to leverage the 9 million African American radio
listeners the company targets.

Article copyright Washington Informer.

Article copyright Washington Informer.
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