Spanish Broadcasting System is asking the Federal Communications Commission to reject a petition filed by Cox Media Group seeking an additional year to find buyers for stations in Tampa and Orlando. Cox has said the deal market collapsed during COVID, making it nearly impossible to strike a deal without a “rush fire sale.” But SBS says it has put an offer on the table for CHR “Power 95.3” WPYO Orlando and an extension is “unwarranted and should not be granted.” And SBS says the failure to sell the station during the past two years has nothing to do with the pandemic or market conditions, but rather “inaction” by Cox that it argues “stands in contrast to the public interest in eliminating the violation of the local radio ownership limits.”
Cox asked the FCC for a one-year extension of the Dec. 17 deadline to sell WPYO and alternative “97X” WSUN Tampa. The stations were both placed in an Elliot Evers-run trust in 2019 after Cox Media Group was swallowed by private equity funds managed by affiliates of Apollo Global Management as part of a pair of deals totaling $3.6 million, giving the firm 56 radio stations across 11 markets. As part of its approval of the deals, the FCC gave Evers two years to sell the FMs.
But as Inside Radio first reported earlier this month, Cox said the economic conditions tied to the pandemic have made selling the FMs difficult. The company said it did receive offers for the stations during the pandemic, but they were at prices “far below” what the marketplace had been at the time the trust was created – and below what the stations will likely be able to sell for as the radio business and the economy recovers overall.
But SBS says it has “actively pursued” entering the Orlando market since August when it approached Cox with the first of three cash offers for WPYO. The first was sent on Aug. 30 but Cox rejected the offer three days later without a counteroffer.
A second, higher offer for WPYO was presented on Sept. 28. But it too was rejected. “Your proposal falls well below the level at which we think the station will eventually sell,” Evers told SBS.
Then on Nov. 3, a third offer was handed to Cox. This time SBS received a counteroffer, but it was several million dollars above the highest appraised value of $6 million that SBS says it received for WPYO.
SBS redacted from its filing with the FCC how much it offered for WPYO, but said all three were “viable offers” for the station, and each was “successively more generous” than the one before it. “SBS’s serious attempts to purchase WPYO have made it clear that Cox has had no serious intention of selling the station before the trust’s FCC-mandated December 17, 2021 deadline, and for months has been banking on Commission approval to extend the deadline under the guise that the pandemic is precluding viable offers,” the filing said.
SBS also notes that two of the top three groups operating in the Orlando market – Cox and iHeartMedia – are “maxed out” from owning additional FMs. “Given the extremely limited pool of buyers likely to substantially exceed SBS’s current offer price, there is no need to extend Cox’s deadline for a full year while it undertakes a prolonged marketing process,” it told the FCC.
SBS Collects Support
As it was rejecting offers submitted by SBS, Cox revealed it planned to seek an extension of the trust. That tip-off allowed SBS to spend the past several months collecting dozens of letters in support of its effort to buy WPYO. On Thursday SBS presented the FCC with more than two hundred letters from advertisers, concert promoters, politicians, listeners, SBS employees, among others, arguing against Cox’s delay.
Among those backing the deal is Rep. Darren Soto (D-FL), who suggested denying the Hispanic broadcaster from acquiring the station would “undermine the public interest in bringing increased competition to these markets and perhaps delay or deny the opportunity for new entrants” while also giving Cox “undue leverage in negotiating fair value for either of the stations.” Senator Rick Scott (R-FL) and Reps. Charlie Crist (D-FL) and Val Demings (D-FL) are also among those that are siding with SBS.
Cox has not yet responded to SBS and the Media Bureau is giving the public until next Tuesday, Nov. 22 to weigh in on the request to push back the sales deadline to 2022.
Even as radio still has several trusts dating back more than a decade, the FCC changed its policy in 2013 and said any new divestiture trusts would only have two years to sell their stations.