8 Radio Stations in Merger

By Michael Clancy
The Arizona Republic
March 7, 2000

Eight Valley radio stations will come under new ownership as details of the radio industry's biggest merger were revealed Monday.

Several deals worth more than $3.5 billion were announced -- three of which affect Valley radio.

CBS will take over KOOL-FM (94.5), the longtime oldies leader; KZON-FM (101.5), which recently changed formats and air staff to reflect a Top 40 approach; and country powerhouse KMLE-FM (107.9). CBS' Infinity Broadcasting will pick up its first stations in the Valley.

Hispanic Broadcasting Corp., which owns KHOT-FM (105.9), will get KKFR-FM (92.3), an urban leaning Top 40 station as part of a two-station, $127 million deal. It will be the first 100,000 watt station to be owned locally by a Spanish-language operator.

Clear Channel Broadcasting, whose merger with AMFM Inc. spurred the activity, will take over the remaining four stations. Moving to Clear Channel are KGME-AM (550), a sports-talk station; KFYI-AM (910), news talk; and nostalgia formatted KOY-AM (1230). Clear Channel also will add the smooth jazz sounds of KYOT-FM (95.5 FM). Those stations will become part of a new eight-station group that will include KMXP-FM (96.9), KESZ-FM (99.9), KNIX-FM (102.5) and KZZP-FM (104.7).

All of the affected stations are part of AMFM's eight-station Phoenix group.

Marv Nyren, one of the AMFM's general managers, said the stations' new owners do not plan to take over operations until the sales receive government clearance.

He said Hispanic executive David Lykes told staff members that KKFR -- which as Power 92 has been the Valley's leading purveyor of rap and hip-hop music -- would continue in its present format.

Jerry Ryan, manager of Hispanic's other Valley station, KHOT-FM (105.9), said KKFR's audience is 35 to 45 percent Hispanic already.

Hispanic Broadcasting owns or operates 45 stations in 13 markets, all of them broadcasting in Spanish.

J.D. Freeman, Clear Channel's chief executive in Phoenix, said no decisions have been made regarding formats on Clear Channel stations, nor would any be until the sales clear regulatory hurdles. CBS spokesman Dana McClintock echoed those comments.

Originally, Clear Channel hoped to hold on to KMLE, but U.S. Justice Department restrictions on the total amount a revenue a single radio group could control made that impossible.

Freeman said the Justice Department was concerned "that we would own both country stations," which in the past have led the market in terms of advertising revenue.

The AMFM-Clear Channel deal was announced in October. The deals announced Monday are seen as a giant step toward federal approval of the merger. The sales, like the merger itself, still are subject to review by the Federal Communications Commission -- expected by the end of summer.

One of the issues in sorting out the stations now is their facilities. Each of the stations Clear Channel will add currently shares office space with stations that will be divested. All told, five different properties house the 12 stations, and two of the properties have two separate radio operations.

CBS purchased 18 stations nationwide in a $1.4 billion deal.

Infinity Broadcasting, which is CBS' radio division, is run by Mel Karmazin, who has built upon his radio empire to virtually take over CBS Inc. Its syndicated lineup includes shock jock Howard Stern and Don Imus. It will now operate more than 180 radio stations in the Top 50 radio markets.

CBS, meanwhile, may try to purchase additional stations. McClintock said Phoenix fits CBS' criteria for cities in which it wants to own a full complement of stations. CBS is believed to be interested in the Hearst-Argyle-owned stations, KTAR-AM (620), KMVP-AM (860) and KKLT-FM (98.7).

Chris Gallu, Hearst-Argyle's local manager, says he has not heard whether any offer has been made. He adds that he doesn't believe CBS will be content with just three stations.

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