What's Really Going On With Merlin?
Everyone has their own view on this one -- and there are many of those views, none of them the same. Merlin CEO Randy Michaels flatly denies Merlin Media is for sale. He's almost a man on an island with that position. Then again when does an operator ever openly announce, "Yes, we are for sale. Does anyone want my stations?" Well, maybe Cox, but this kind of scenario is certainly rare. For those of you who've been in radio for some time, we also ask, how often does a "for sale" rumor turn out to be false? Here's what we heard yesterday.
One industry veteran told Radio Ink yesterday, "It was no secret there was a portfolio with the Merlin stations floating around the Radio Show in Dallas last week." The rampant speculation yesterday was that the Merlin stations would be broken up with the possibility of three different buyers for each (New York City, Chicago, and Philadelphia). The news that the stations would be broken up, we were told, would be announced soon. "Philly and New York are basically done. Chicago was more complicated." That news was also denied as 100 percent false by someone close to the company (not Michaels).
A very radio-connected investment banker told Radio Ink yesterday that the Merlin stations are 100 percent on the block. Of course, that goes against everything we were told that this was 100 percent false, by someone close to the company. The banker went on to say, "If it were me I would just hold on to the stations at this point. They've lost so much money already, how much worse can it get? I'd hold them for a few more years." It's been reported that Merlin investors have already lost $20 million.
There is another opinion floating around that Merlin backer GTCR just wants out. They gave it a try, it didn't work, so let's just cut our losses and head for the hills. And they are attempting to see what they can get for the properties, either together or in pieces. If they can get a decent price, they would take it. If not, sit and wait. And, as people love to do, the speculation about who would want these properties was what everyone was talking about on Thursday.
In Chicago, it seems the most obvious buyer would be Cumulus. With only a pair to play with in the Windy City, and a game plan to focus on large markets, adding three more in Chicago is logical. In New York City, it would be nice for CBS to grab an FM for a WFAN simulcast. With ESPN getting an FM signal a few months ago you have to think the brass at CBS want to grab some of the younger listeners on the FM dial as well. In Philly, who knows? Clear Channel already has five FMs. CBS has three FMs and two AMs. Greater Media has four FMs. Would they want another? What about Cumulus? Cumulus is not even in the Philly market, so would they want a Philly FM to put on network product? Of course, it could be someone else for any of these, a dark horse perhaps. Or, it could be as Michaels says, "Merlin Media is not for sale!"
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