News & Analysis

Blackstone, Bain near $1bn radio deal

The Blackstone Group and Bain Capital are working with Cumulus Media on a deal to buy Susquehanna’s radio assets. The deal would be one of many radio investments from private equity groups in recent years.

By
Ken MacFadyen
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The Blackstone Group and Bain Capital are reportedly partnering up with Cumulus Media to acquire the radio broadcast unit of Susquehanna Media. A source close to one of the investors confirmed to PEO that a deal should be announced in the coming weeks, and the reported purchase price of more than $1 billion (€825 million) is accurate.

 

Blackstone and Bain move into radio space

The deal represents a step into terrestrial radio for Blackstone and Bain, both of which have been active in the media space in the past. New York-based Blackstone took part in a roughly $2 billion deal last year with Providence Equity Partners in which the pair gained a 40 percent stake in media conglomerate Freedom Communications. Perhaps more notable, though, was the firm’s backing of Sirius Satellite Radio, one of the two dominant satellite radio providers.

 

The terrestrial radio space has come under pressure from the likes of satellite radio and even the iPod craze. Blackstone has already profited through its investment in Sirius, and other groups, such as Apollo Management and Madison Dearborn, have made similar bets on satellite radio. Meanwhile, venture groups have even begun directing capital toward the iPod set, with investors such as Kleiner Perkins Caufield & Byers and Sequoia Capital recently backing PodShow Inc., a “podcasting” portal operator associated with former MTV VJ Adam Curry.

 

Other private equity groups, however, are using this shift in radio to buy up assets in the sector. Washington DC-based Arlington Capital has been accumulating radio stations through its Cherry Creek platform, launched 2003, while other investors such as Nautic Partners and Veronis Suhler Stevenson have embarked on similar plays. Vestar Capital also recently announced the hiring of Clear Channel vet Kenneth O’Keefe, so it could also make a move into the space.

 

According to its Web site, Susquehanna Radio is the No. 11 radio broadcaster in the US. The privately held company operates over 30 radio stations primarily in the 40 largest markets. Susquehanna Media, which also operates a cable broadcasting company, has also agreed to unload its cable operations in deal to Comcast.

 

The Atlanta-based Cumulus, meanwhile, is a publicly held radio broadcaster that owns and operates 302 radio stations in 61 mid-size media markets in the US.

There was no word in the news reports regarding how Blackstone, Bain and Cumulus would split up the stake in Susquehanna or how the deal would be financed.