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The Federal Communications Commission will allow more foreign investment in iHeartMedia — up to 100%, subject to certain conditions.

“We find that the public interest would not be served by prohibiting foreign investment in iHeart, the owner of over 850 radio broadcast station licenses, in excess of the 25% benchmark set forth in … the [Communications] Act,” wrote Albert Shuldiner, chief of the Audio Division of the Media Bureau.

The FCC has the discretion to allow higher levels of foreign investment in a broadcaster’s U.S. parent company. iHeart asked to be allowed to exceed the 25% cap because, in coming out of bankruptcy last year, it issued new stock and special warrants but was required to seek approval to exceed 25% so that foreign investors could use their warrants to buy stock.

[Read: Cumulus Gets Thumbs up on Foreign Ownership Petition]

A 2016 commission order made it easier for U.S. broadcasters to seek this type of outcome. Since then, the FCC has eased or waived the 25% cap in several cases. iHeart’s role as the country’s largest radio station owner makes it notable, but the FCC recently also gave a similar ruling in favor of Cumulus Media.

“The FCC’s decision will enable holders of iHeartMedia warrants to have those warrants exchanged into Class A or Class B shares of iHeartMedia common stock,” the company stated. It said the ruling “will afford iHeartMedia flexibility to accommodate increased foreign investment that may result from share purchases by the public.”

The nine-page ruling includes a summary of the role and investment structures of the specific companies concerned: PIMCO Group and Invesco Group. iHeart had estimated that if their warrants were fully exercised, its foreign equity interests would be about 64% and foreign voting interests around 70.5%. iHeart emphasized that the investments mostly involve U.S. subsidiaries of businesses based in Germany and Bermuda, two close allies and trade partners.

In its petition, iHeart also argued that lifting the cap would serve the public interest by enabling it to better compete, incentivizing foreign investment and encouraging reciprocal opportunities for U.S. companies elsewhere.

The company will still have to obtain FCC approval for any new or additional foreign entity to control more than 5% (or more than 10% for certain institutional investors).

The commission rejected an argument by one petitioner that this outcome would put national security at risk. The FCC said the Departments of Justice, Defense and Homeland Security signed off, as long as iHeart abides by commitments it made to DOJ including designating a Security Officer who is a U.S. citizen and certain reporting requirements.

 

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David Field

Group owner Entercom’s third quarter investor report delivered on Nov. 6 wasn’t the ad revenue disaster of the previous quarter, but it shows any kind of robust economic recovery will take time.

Entercom said its third quarter net revenue was $268.5 million. That’s an increase of 53% compared to the second quarter of 2020. However, that is a dip of 30% when compared to the third quarter of 2019, according to the financial report.

One promising sign for the publicly traded broadcaster is its monthly revenue improvement trend when compared to one year ago: July was down 36%, August down 32% and September was down 25%.

[Read: Entercom and FanDuel Ink Partnership]

Entercom has been aggressively trimming costs since the beginning of the pandemic and cut station expenses in the quarter by 16% compared to 2019 totals to $228.1 million. That cost-cutting couldn’t help Entercom stem an operating loss of nearly $300,000 for the third quarter compared to income of $79.5 million in Q3 2019.

Entercom’s President and CEO David Field said during the investor call on Friday the company will continue to focus on reducing costs to be better positioned for economic recovery post-pandemic. “For example, we are planning to reduce the size of our studio locations significantly to reflect expected post-pandemic work structures. And anticipate significantly reducing the $70 million we currently spend on studio leases over the next several years.”

He continued: “In addition, we have significantly reduced the staffing and scope of our promotions department and discontinued some of the legacy practices, which have diminishing value given the rapid adoption of our digital, social and other technologies.”

Booked fourth quarter ad revenue for Entercom, Field says, already exceeds the $268.6 million in revenue from the third quarter. Some of that is attributable to political advertising which “rose significantly in October,” he said.

Friday’s financial disclosure shows the broadcaster’s digital and podcasting revenues were up 41% year-over-year to $47.3 million in the third quarter. Field said: “We continue to build and transform Entercom into a leading multiplatform audio content and entertainment company with scaled audience reach, robust data, analytics and attribution capabilities.”

Field said podcast downloads was up 27% compared to Q3 2019. The company has just over 26 million monthly average podcast users.

The broadcaster’s net debt as of Sept. 30 was $1.63 billion, which is down $66 million from the end of 2019, according to the company’s filing with the U.S. Securities and Exchange Commission.

Much of the erosion in ad spending in 2020 brought on by the pandemic can be attributed to two factors, less volume and lower pricing, Field said. “There’s no question we took a hit on pricing. We did a lot of things to support our local advertisers who were hurting. But inventory has tightened up and we have seen an improvement in pricing.”

Coinciding with Friday’s investor call Entercom announced a station swap with Urban One that gives Entercom FM stations in Philadelphia and St. Louis and an AM station in Washington. In exchange Urban One will gain Entercom’s cluster of radio stations in Charlotte, N.C. The deal was an “even trade with no other financial considerations,” Field said on Friday’s investor call.

In addition, Entercom recently announced a partnership with FanDuel designating the sports betting company as “the official sportsbook partner” of Entercom. Field called the agreement “the largest advertising deal in radio history,” without specifying any dollar figures.

“Unfortunately, we are not at liberty to share those (numbers), but I will say that FanDuel will be one of our largest advertisers,” Field said. “And we expect the amount of their advertising to grow over the six years of the deal as we see more states open to legalize mobile gambling, including New York.”

 

The post Entercom Filing Shows Ad Revenue Trending Up appeared first on Radio World.

The big multi-station swap that was just announced by Entercom and Urban One will bring change in four major media markets.

Among the impacts, Entercom’s iconic KYW(AM) in Philly now gets a big FM presence, while the company enhances its position in three big markets, but departs a fourth.

Meanwhile Urban One becomes an even bigger player in Charlotte than it already is, and reduces its debt.

Entercom CEO David Field on Friday described it as an “even trade with no other financial considerations.”

The FCC must approve all this; the deal is expected to close early next year. But Urban One and Entercom will begin operating the stations later this month under a Local Marketing Agreement.

Entercom gets St. Louis urban contemporary station WHHL(FM); Philadelphia urban station WPHI(FM); and Washington, D.C., station WTEM(AM) “The Team 980,” flagship of the Washington NFL team. Entercom also takes the intellectual property of St. Louis  adult urban contemporary WFUN(FM) “The Lou,” which will move to another frequency.

Entercom already has multiple other stations in each of these markets.

In Philly, Entercom will use WPHI to carry “KYW Newsradio” programming on FM at 103.9, in addition to KYW’s 1060 AM signal. In the announcement, Senior VP & Market Manager DavidYadgaroff made oblique reference to a common woe of AM operators when he talked about expanding KYW’s reach and enhancing the listener experience “on the crystal-clear FM dial.”

It is the second expansion of a major Entercom AM news format to the FM dial in a few weeks, following the recent move in Pittsburgh to expand KDKA to FM.

But the deal also means Entercom lets go of another notable news talk station, because …

Urban One is really powering up in Charlotte, N.C., where it currently has three stations. Now it adds these from Entercom: news/talker WBT(AM/FM), adult contemporary station WLNK(FM) and sports station WFNZ(AM) and its FM translator at 102.5.

President/CEO Alfred Liggins said in a release: “By adding three best-in-class general market formats (adult contemporary, sports, news and talk) to our existing cluster of stations — WPZS(FM), WOSF(FM), and WONC(FM) — that super-serve the Black and Urban consumer, Urban One will be a dominant player across all segments of the growing Charlotte market. The ability to build scale with a complete market offering in multiple genres is what makes this deal so exciting.”

Although money isn’t changing hands, Liggins said the deal also helps the company “continue our strategy of de-leveraging the business.”

At Nielsen Audio, the Washington market is ranked No. 7, Philly is 9, Charlotte is 23 and St. Louis is 24.

 

 

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Grants Petition for Declaratory Ruling Filed by iHeartMedia, Inc

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Issued a Notice of Apparent Liability for Forfeiture in the amount of $3000 to South Central Oklahoma Christian Broadcasting Inc. for failure to timely file a license renewal application for Station KOUI(FM), Louisville, MS

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KMTP's Petition for Reconsideration is based on carriage election procedures that are no longer in effect

Technology supplier Tieline says one way it can measure the impact of the pandemic in radio is by watching usage statistics for its live streaming app.

“There is no doubt the pandemic has led to network broadcasting workflows changing dramatically in recent months,” the company stated.

It noted that demand for remote broadcasting solutions was “huge” when the pandemic first hit, as Radio World reported, and this was reflected in use of its Report-IT Enterprise app. VP Sales APAC/EMEA Charlie Gawley said the company’s TieServer statistics showed a more than three-fold increase in app logins and use in March and April.

“Over the last few months, the statistics have stabilized, and Report-IT Enterprise use has roughly doubled compared to its use pre-pandemic,” said Gawley. “We suspect that this is the ‘new normal’ for Report-IT, certainly for the foreseeable future but perhaps also beyond that.”

The company highlights the app for its live streaming capabilities and support for operations like file recording and FTP, voice tracking and podcast recording. (Learn more about it.) Tieline also noted that people who start with the app may later upgrade to more permanent codec solutions like its ViA model.

Addressing a question that many people in broadcasting have been discussing this year, Tieline wrote: “Working and broadcasting from home is now the way things are likely to be for the foreseeable future in many regions. Major networks also openly foresee working and broadcasting from home becoming the permanent new normal for many. At the very least, station footprints are likely to reduce and support a mix of home broadcasting and studio-related work.”

[Related: “CEOs Look Beyond Pandemic”]

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The Commission recently adopted changes to its rules and procedures for considering competing applications for new noncommercial educational (NCE) FM radio stations in Reexamination of the Comparative Standards and Procedures for Licensing Noncommercial Educational Broadcast Stations and Low Power FM Stations, MB Docket No. 19-3, Report and Order. In this document, the Commission announces that it is directing the Media Bureau (Bureau) to open a filing window for NCE FM new station applications for the FM reserved band (channels 201-220). The Bureau will issue a future Public Notice to announce the specific dates of the 2021 window. The Commission also seeks comment on a proposal establishing a ten-application limit in the upcoming 2021 filing window.

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Westwood One announced that TM Studios, the famed jingle and production house it owned, was purchased for an undisclosed figure by Major Triad Media, a partnership that is being run by three TM Studio veterans: Dave Bethell, Chris “UK” Stevens and General Manager Greg Clancy.

TM Studio will transition from its Dallas-based home to become a multinational entity with studios in Dallas, Los Angeles and the U.K. The company — which creates custom station jingles, from full buyouts to syndicated imaging packages — has clients like the American Forces Radio Network and over the years TM has been owned and operated by iconic individuals such as Roy Disney and Bill Drake. The transaction was finalized on the 30th Anniversary of the merger between TM Productions and Century 21 Productions, which became TM Century Inc., a predecessor to TM Studios.

[Read: The State of the Radio ID Jingle]

“From listening to TM jingles on my local radio station in England when I was a kid to becoming a fan, I’ve always wanted to work for TM,” said Bethell, who is creative director of Major Triad Media. “Eventually it was the place where I had my big jingle break.” Bethell said he has written and produced for TM Studios continuously ever since and, as co-owner, is “excited to tell the next chapter of TM’s incredible story with our perfect new partnership.”

Life at TM also brings back fond memories for Clancy. “I vividly remember watching my dad sing in TM vocal sessions as a kid and had my first vocal session at TM as a 12-year-old,” said Clancy, who is general manager of Major Triad Media. “Just imagine what this moment means to me. We are standing on the shoulders of giants and can’t wait to grow and extend the TM legacy. ”

The trio of owners come to the partnership with a list of accomplishments. Clancy is a singer, writer and producer of radio station jingles and commercial jingles. He also directs the 13-time gold medal winning men’s chorus, The Vocal Majority, and sings tenor in the champion quartet, Max Q.

Bethell is a long-time jingle/music composer, producer, voiceover artist and business owner. He was the voice of the London 2012 Olympic games and is currently the voice of Virgin Radio UK and dozens of radio stations around the world. Bethell created the radio-specific production music catalog Beds & Beats, which he sold to BMG in 2015.

Stevens was a former vice president and creative at TM and has since returned to Manchester, England, where he runs a production company and programs one of Europe’s leading country music radio stations. Stevens launched the world’s first updating jingle package while at TM, and is an experienced composer and broadcaster.

TM Studios will continue to work with Westwood One via a multiyear agreement in which it will serve as exclusive barter representative.

“Greg, Dave and Chris each have a special and unique history with TM Studios,” said Suzanne Grimes, executive vice president of marketing for Cumulus Media and president of Westwood One. “They are the perfect team to lead TM through its next incarnation. We look forward to the magic they will create and to continued success working with them.”

 

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