After fielding a question about the possibility of more stations being sold, following the $12.2 million sale of WPZR-FM in Detroit, Urban One CEO Alfred Liggins wanted his employees to listen to what he had to say and not pay attention to rumors that may be swirling around.
Employee morale is always affected when there are rumors that a station, or a company, is on the block. It also affects employee performance as we found out during the Entercom/CBS merger. Urban One CEO Alfred Liggins spoke straight to his employees Wednesday morning during his quarterly earnings call. He said the company is not a VC fund where they want to make money and exit. His family has been in the broadcasting business for 38 years, but it is a business, he added. “We have a leverage profile that has to come down. We love being broadcasters. We need to always rationalize our portfolio. We are in an industry where the two biggest companies went bankrupt and we’re glad that wasn’t us.”
Urban One sold WPZR to EMF for $12.2 million in cash. It also received three translators in the deal, which will help the company keep the Praise format in the Detroit market (it was already on one translator). The station was billing about $2 million a year and cash flowing $1 million. After the sale, with the four translators still carrying the format, Liggins expects to retain about $1 million in revenue from that format with a “respectable” amount of cash flow. Liggins said this sale, getting the translators, and keeping the format on the air in Detroit translates into a multiple north of 20X for Urban One. Urban One had been in discussions with EMF about the sale of WPZR for over two years before finally pulling the trigger this week.
The sale of the Detroit station helps the company reduce its leverage and Liggins says he is hyper-focused on de-leveraging. But, he wants employees to know that doesn’t necessarily mean more stations will be sold. That might be, but he said, they might also be a buyer. “We could get larger somewhere. You can create synergies going in either direction. That’s my job and that’s been our track record. People should always expect that.”
Just a side note from the earnings call: Liggins used the word “recession” several times during his hour-long session. It almost sounded like he might be expecting one. He also said he’s fielding calls from VCs who are looking into buying stations and holding on to them just because of the cash flow they throw off.
So back to what Liggins wanted his employees to know regarding stations being sold. “The best way not to be looked at as an under-performer is to perform.”
From here:
The cliche admonition around these parts has always been: “Your jobs are secure.”
I STILL recall Bill Fowler of Park Communications in Ithaca, NY arriving as a hatchet man in Grand Forks @ KNOX/KYTN back in ’84 and saying the same thing . . .