As Connoisseur Media moves forward with the reshaping of former Alpha Media properties, two California deals filed during the shutdown take sharply different approaches: one commands an eight-figure price, while the other changes hands for just one dollar.
With the FCC’s Licensing and Management System returning online after six weeks of inactivity, Bonneville International and Connoisseur quickly filed their applications seeking regulatory approval for the sale of Bonneville’s Bay Area stations to the company led by Jeff Warshaw.
Bonneville is selling KOIT, KMVQ, and KBLX in the San Francisco-Oakland market, along with KUFX in San Jose, for $10 million. A $1 million escrow deposit has already been submitted. Kalil & Co. is brokering the deal for Bonneville.
The application includes a request for a waiver of the FCC’s Local Radio Ownership Rule, which would otherwise require divestitures following Connoisseur’s merger with Alpha Media. Under current rules, operators in markets with 45 or more stations may control no more than eight commercial stations total, with a cap of five FM signals. The San Francisco market has 117 full-power outlets, placing Connoisseur near the limit before any Bonneville assets are added.
Connoisseur told the FCC that several Alpha-acquired stations across the Bay in San Jose do not function as core competitors in San Francisco due to technical and geographic factors.
The filing situates the proposed acquisition within a broader competitive environment. The Bay Area has approximately 60 different radio owners, 23 full-power television stations, numerous low-power operators, and a dense mix of print, cable, digital, outdoor, and direct-mail advertising sellers. A Borrell Associates analysis submitted with the application shows digital advertising in the region up more than 38% since 2019, while radio advertising is down 14%.
Per Borrell, no radio operator holds even 2% of the total local ad market.
If the Bonneville stations are added, Connoisseur estimates its radio revenue share of the market would be 15.3%, still below Audacy’s 23.9% and iHeartMedia’s 29.0%. The company argues that consolidation would allow it to better compete not only with broadcast competitors but also with large-scale digital audio platforms, in line with the ongoing 2022 Quadrennial Review.
Meanwhile, Connoisseur’s sale of its Bakersfield, CA, cluster to Frequency Broadcasting is structured around performance rather than fixed valuation. According to the Asset Purchase Agreement filed with the FCC, Frequency will pay just $1 at closing for KLLY, KKBB, KNZR-AM, and KNZR. All additional consideration depends on how the stations perform over the next several years.
Under the earn-out provisions, Alpha Media will receive 25% of Broadcast Cash Flow generated by the Bakersfield group through December 31, 2030. The agreement also grants Alpha 50% of Additional Revenue tied to the Z Entertainment Agreement or any successor. A third tier gives Alpha 25% of any future sale price should Frequency sell the stations within ten years, applied to the full transaction value, including cash, stock, escrows, holdbacks, or other forms of consideration.
More insight into that strategy is expected soon, as additional details emerge from the forthcoming FCC filing tied to Connoisseur’s recent 15-station sale in Missouri.
