8-28-13
L&L and Alpha Broadcasting CEO Larry Wilson has crashed back onto the radio scene with wads of investor money in his pockets and a goal of creating a $50 million company as soon as he can find the right deals. Wilson's friend Dick Ferguson tells Radio Ink it's good to have Wilson back in the mix. "Larry is just what radio needs right now. He's smart, experienced, a people guy and a cheerleader not just for his team but for the industry." Beasley CEO George Beasley adds, ?Larry possesses old school attributes; he is an astute businessman who is fair in his dealings and whose word is his bond. He is one of those people with whom you feel comfortable to conduct business on a handshake. He is a man of character who knows how to operate radio stations!? Pictures of Wilson will be scattered all over the Rosen Shingle Creek Hotel at the RAB/NAB Radio show next month as he graces our next cover. In our interview next month Wilson shares his views on today's radio industry, Lowry Mays and yes, Farid Suleman.
Wilson plans to use his goodwill and reputation as a people-person operator to pick up some of the radio industry's strongest people who are disenfranchised with how radio is going. And, he's heard from may of them as they wait for him to make deals. The right deals, according to Wilson, are markets he can insert his special team of operators into to enhance the cash flow of a cluster, and, owners that are realistic enough to realize radio is only worth about 6X cash flow these days. There was a time owners would have scoffed at that number and laughed a buyer right out the door. That time was certainly 2001 when Wilson made one of the biggest radio deals on record, selling Citadel Communications to Wall Street investment firm, Forstmann Little & Co., for $2.1 billion. Then, he sat on the sideline and watched the economy and the industry crater.
Dick Ferguson talks about Wilson now getting back in the game. "Every now and then you see someone who has deep experience in an industry, a knack for timing, and an eye for a good deal buck "conventional wisdom" and make a move that goes against the trend. Larry's reentry into the business demonstrates his belief that there is a lot of life ( and money to be made ) in the radio business if you buy right and know how to operate. And he's got skin in the game which sends a strong message to his people and fellow investors. I wouldn't bet against him."
Here's more from our upcoming interview.
RI: Take us back to 2001. Why did you decide to sell Citadel?
Wilson: Well, it was a great offer. I would like to say I was a genius and saw everything coming, but I didn't. I saw that business had slowed down. But it really slowed down, mostly after we made the deal in January of 2001. I just felt it was a good offer. I did think that multiples were awfully high. I didn't see any way they were going up. The only thing I saw that could happen was they could go down. But, I never dreamed that they could go down as much as they did.
RI: For somebody that loves radio the way you do, yet you see those high multiples, how do you separate the two and say "I have to do this business deal?
Wilson: Probably just as important, or maybe more important, I loved the people. I hated to leave the people. My wife was ill, so that was another factor. Right after the deal was done, she had a fifth brain surgery, and that was really awful. That's when I really had to leave. I just told Ted Forstmann that I couldn't do it anymore. I had to stay home and take care of her. It did hurt a little bit. But, when you are a public company, even if you are a private company, you still usually have shareholders. I'm not rich enough to just make my own deal. So, you have to think of the shareholders. Ted Forstman's offer presented us with a tremendous opportunity.
RI: Is there any way to be prepared for a recession like the one that took place after you sold?
Wilson: Well, the only way to be prepared for that was to not have a bunch of debt. And all of us had debt. That was what was feeding everybody, the debt. Myself included at Citadel. My last deal I did was $290 million for Dick Broadcasting. It was a great deal, as long as multiples stayed up. But, you had to borrow the money to do deals of that size. That's what everybody did. The Clear Channel deal is history. That's what happened there. They borrowed so much money to do that deal. Of course, Cumulus has just borrowed and borrowed and borrowed. The only way you could've been prepared to weather it, and a good reason why (Saga CEO Ed) Christian is still around, is he has been very judicious on his debt. He didn't do a lot of acquisitions. And he's still out there operating.
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