August 2, 2011
Sometimes when a deal is made in the radio industry, people say holy cats, I never saw that one coming. This one isn't one of those deals. Although who was going to be the dance partner was a question mark, it was no secret Westwood One was moving in this direction. Yesterday the announcement came that Dial-Global will merge with Westwood and the The New York Times is reporting the deal was worth $250 million. Neither side is confirming or denying that figure and Radio Ink has also learned that there was at least one more interested party bidding for Westwood which may have pushed the price to the N.Y. Times quoted number.
Oaktree Capital is the money behind Dial, which was launched in 2002, and Westwood is controlled by the Gores Group. According to the Dial Global team they will manage the company when the deal closes, which is expected to be in the 4th quarter. No word yet on what will happen with Westwood employees. with Westwood a public company listed on the Nasdaq, the plan is for the company to remain public. A name of the new company has not yet been announced and D.O.J will need to approve the deal before it closes.
Yesterday we spoke with Dial Global Co-CEO's Ken Williams and and Spencer Brown about the merger.
Brown: The two companies are very complimentary with each other. I just think from a strategic standpoint, it made sense, given that Westwood One has always had good sports and live entertainment and a lot of marquee products. Dial Global really is in the format business. It is something that makes sense from that point of view. Westwood really has a lot of experience and a lot of products being sold in the large market. With our format services business we have always been kind of small to mid-market focused. You have just a lot of fit as far as the compliments to each other."
Williams: The assets are very complimentary and with our legacy sales representation business, its just a third element that Westwood One didn?t have that makes sense for a merged entity.
RI: Talk about the management structure and are you confident you are getting a stable product with Westwood?
Brown: The plans are for Ken, David, and I to manage the combined entity. Westwood has some tremendous assets both in terms of people and the brands that they are associated with. We love our team at Dial Global. We think that combining our team with theirs, yeah, we are confident that we can manage this company and do well with it. If we weren?t, we wouldn?t move forward on this.
RI: What does it mean for the Westwood One employees?
Brown: It is still in the early days. This is a signing, not a closing. There is a period of time in between the merger being announced and the two companies coming together. It is too early to really comment on things like that. At some point we will sit down with their management and plan things out. Right now is not that time.
Williams: As it said in the press release, there is a series of documents that have to be filed at the Department of Justice. That all has to be reviewed. The actual time table for that is unknown at this point. They are listed on the NASDAQ. It will become a combined entity. Post closing it will be a public entity and still trade on the NASDAQ.
RI: Will the name be Westwood One?
Williams: That?s one of those things also. No final plans on the name yet.
RI: Was there another bidder? A Radio Group, and how will that affect how you work with those stations now?
Williams: Candidly, I don?t know. I can say that we expect, and look forward to, working with every radio group. Dial Global, right now, has relationships with every small, medium, and large market groups across the country. We fully expect and anticipate to continue working with everyone.
RI: What are your plans as far as growing a company?
Williams: I think that, by and large, what we have always had success in doing is trying to work with the market place in term of reacting to what the marketplace says it needs and just stay focused on that. What we expect, we have a group of valuable assets between the two companies. All of those assets are filling current needs. Going forward, we will continue to anticipate with feedback from the marketplace creating new products that will serve those needs as well. And do it very efficiently.
RI: What do you think the market might need today?
Brown: We are still going to have the relationship with Triton Digital. We think, clearly, the market for streaming and other digital products, continues to firm up and grow. That is something through our sales efforts and our relationship with Triton, we will continue to be able to offer to the market. I think that is something that will fuel the growth in our company and also something that we can help the other stations out there consummate their digital strategies. We also think that, for the merger to go through as a larger entity, we will have the ability to invest further in our infrastructure. We have already made a lot of advances on our format business. We are in a position to really help out the small to mid-markets with their programming and services, and possibly their digital strategies. That is something that I think is going to be important for us as a company and for the market to have somebody for them to turn to and rely on to help them to do things that they might not be in a position to do for themselves.
Williams: We are very excited. I think it is a reflection of the success that the Dial Global employees and the Westwood One employees have brought to the table. Both companies have been very successful in program and service offerings. The combination of the two, we just look forward to even greater success.
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