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The following happened in 1992 and
1993. I had an idea. It was before consolidation, but I had
a hunch that the ownership rules would someday be extended
so that an operator could own many stations in a market. If
that turned out to be true the value of stations would
dramatically increase in a buying frenzy. On cue I got a
phone call from my good friend Jim Phillips. Jim was a
former CPA, owned radio stations in El Paso, and also was in
the banking business (soon to own one). Jim had been called
by a friend from the Dallas office of a big time Boston
bank. These bankers were involved with the LBJ (the former
President of the US) group who wanted to expand their radio
operations. I told Jim of my idea. We met in Dallas at the
Mansion restaurant with the Boston bankers and Ian Turpin,
Lucy Johnson (LBJ’s daughter) and Jim McBride of LBJ. The
idea/concept was to do some sort of merger of various
independent stations with LBJ. The Boston bank would supply
any needed financing. The group decided the idea was worth
exploring. They asked me to find some possible merger
candidates.
There were obstacles. First, all the merging stations would
be valued by brokerage firms to determine new company
ownership percentages. Second, selection of a COO for the
new company had to be approved by the new company
owners/directors. Third, the merging station management had
to stay in place for a few years, because we needed
management stability for an IPO. Points one and three seemed
doable.
The first person I called was Lew Dickey whose family was
purchasing WALR in Atlanta. Lew and I had lunch at Bones
Restaurant. I outlined the plan to him. He, too, thought the
idea was worth exploring. As we left Bones, Lew said “If
anyone can put it together it is you”. But I knew it was
going to be extremely tough to get the merging station
management to agree to the aforementioned point two… the new
COO of this new “group”????? Even with that problem in mind
we had a meeting some weeks later in Dallas with Lew, the
Boston bankers, Jim Phillips and me.
There was enough encouragement from the Dallas meeting for
me to continue to ask other broadcasters if they would be
interested. I called Dex Allen who owned stations in San
Diego. I also called another owner/operator there. Both
wanted to know more. I also called an owner/operator from
Dallas and Ft. Lauderdale/Miami. And from Cincinnati and
Charlotte. And others. They all wanted to know more. That
would have been one heck of a new group!!!!
For those owners listed in the previous paragraph a meeting
was scheduled at the Peninsula Hotel in Beverly Hills. Also,
in attendance were Ian and Lucy from LBJ, and a senior guy
from the aforementioned Boston bank. I sensed some real
interest from some of those at the meeting. They encouraged
me to try to move this elephant forward. I had a commitment
from two of the groups provided they approved the financial
terms…and agreed to…HERE WE GO AGAIN…the broadcaster/COO who
would run it on a daily basis.
Many names for a COO were discussed over the months that
followed.. Quite a few of the merging owners had the talent
to operate the new company (like Lew or Dex). Ian Turpin was
to be the Chairman. However, despite all of my best
salesmanship I just could not get a consensus as to a COO.
Thus, the idea died on the table!!!
Some months later the Phillips and Burkharts plus Ian and
Lucy were having dinner at Commanders Palace in New Orleans.
The deal was dead, but I brought it up in conversation
saying it’s too bad it did not work because I could
“guarantee” that prices of stations would escalate soon.
There was some discussion and disagreement about my
“guarantee” declaration. But, I knew it would happen. And
did it!!! Sadly, all of the owners who did not want to agree
on a COO missed out on millions, millions and more millions
of additional dollars during the consolidation buying spree.
I remember, because I WAS THERE.
e-mail Kent
kent@kentburkhart.com
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