That’s never really been the philosophy of the only CEO Saga has ever had, Ed Christian. He’s always been slow and steady at growing his company. Broker Michael Bergner has a different take on the future of the company in part three in our series on the future of radio.
Radio Ink: How does 2019 look to you in terms of possible deal making now that Cumulus has restructured and iHeart is nearing the completion of its restructure?
Bergner: I think 2019 in general is going to be a slow year. There is not a lot of money out there for deals. There is also some trepidation because the rules may be changing.
Radio Ink: We’ve heard a lot of chatter that the restructures needed to happen before we saw any new investment. Is that your read?
Bergner: No, I don’t think so. Unless, and this is a hypothetical, if iHeart were to take a package of some of their smaller markets and put it out there, I think that would kind of be good for the radio trading market. I have had no indication, or even rumors, that they would consider doing that. But I guess if they were ever going to do that, it would be after they get through this bankruptcy.
Radio Ink: Do you expect Cumulus or iHeart to sell off any stations in 2019?
Bergner: It is a possibility that Cumulus will sell some non-core assets to reduce some of their debt, so that could spark a deal or two. The big question mark for iHeart is will they let some of their smaller markets go? To be honest with you, if I had to bet, I would say no. Of course, there are still other groups out there looking to sell, but there are just not a lot of buyers right now. That’s the problem.
Radio Ink: Any chance of a blockbuster deals in 2019?
Bergner: I guess it’s what your definition of blockbuster is. I don’t see Entercom buying any more from that standpoint. Hubbard just did a blockbuster in West Palm Beach, so that may take them out of the loop for awhile. No, I don’t think there will be.
Radio Ink: What are you hearing about more deregulation?
Bergner: Nothing. On that front I’m actually disappointed. I think when Trump was first elected, and even the year after that, we had tremendous momentum for change. Now, it’s just going at such a slow pace. I think we absolutely, positively have to have it. I don’t even know what the next story is without deregulation. We are very challenged right now by new technologies like Pandora, Spotify, and satellite radio. We’ve got to be able to “strut our stuff” to full capacity. There’s no controlling the media because you own more radio stations in a given market. I mean that’s just a farce.
Radio Ink: Will deregulation happen before the 2020 election?
Bergner: Putting politics aside, our best shot is under this administration; whether you agree with this administration or not. If you’re for dereg, then your best shot is with this administration. We wouldn’t even be having this discussion if Hillary Clinton won the election. I will be very discouraged if it doesn’t happen now. If not now, it would then take a real crisis, which we don’t want in the radio business, where they just say “oh my God we have to bail these guys out.” So, its now or never in my book.
Radio Ink: Look into your crystal ball. Who will be a much bigger company in 2020 than they are in 2019?
Bergner: Maybe some of the smaller broadcasters will grow. Saga Communications will be a bigger company. They are underleveraged, they are very well run, they have excellent management and they have the money. They can do deals.
Reach out to Michael Bergner by phone at 561.212.3969 or e-mail [email protected].
Read part one in this series HERE
Read part two HERE
