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[March 19, 2006]

Deal won't affect local radio stations

(Erie Times-News (PA) (KRT) Via Thomson Dialog NewsEdge) Mar. 18--The deal is hardly Mickey Mouse.

Citadel Broadcasting Corp., which owns four Erie radio stations, and Walt Disney Co. agreed in February to a blockbuster, $2.7 billion merger of Citadel and Disney-owned ABC Radio. Disney will be the majority owner of the new company, which will be named Citadel Communications.


But the net result should be business as usual at the four Erie stations: WXKC-FM/Classy 100, WQHZ-FM/Z-102, WXTA-FM/Country 98 and WRIE-AM/1260, says Jim Riley, market manager of Citadel Broadcasting Erie.

"It doesn't mean anything locally," Riley said. "All the management structure at Citadel stays the same. It means they're part of a bigger company."

When asked what Erie radio fans might hear differently, Riley said, "Not a thing. There should be no difference as a result of the transaction, at all."

Citadel in February agreed to buy a 48 percent stake in ABC Radio, which includes 22 radio stations and the ABC Radio Networks. Disney will still own 52 percent of the newly merged company, assuming the deal clears regulatory hurdles. Disney-owned ESPN Radio and Radio Disney are not part of the deal.

Citadel Broadcasting Chief Executive Farid Suleman will be chief executive of the new Citadel Communications.

The merger will give Citadel a foothold in nine major markets, such as Los Angeles, Chicago, San Francisco, Dallas and New York. Citadel also will become the nation's third-largest radio group behind Clear Channel and CBS.

Tom Taylor, editor-in-chief of Inside Radio, said the deal essentially allows Disney shareholders to reap a financial profit through radio, while letting another company manage the operation.

Both Riley and Taylor said FCC approval is likely, considering Citadel owns no other stations in the cities it's acquiring from Disney. Riley, however, said the Internal Revenue Service might scrutinize the deal.

"It'll take most of this year to answer the question whether the IRS will let this fly," he said.

After the deal is complete, Citadel Communications will own 177 FM stations and 66 AM stations, in addition to the ABC Radio Networks.

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