The Air Turns Blue
By Al Diamon
Created May 3 2008 - 7:23pm
I'm not saying Louis Vitali of Kennebunkport is a financial genius. But he does seem to have a knack for coming out on the right end of a business deal.
In 2004, Vitali sold his six Maine radio stations, including the four-station WBACH classical-music chain, for $18.3 million. That's more than three times what he originally paid.
Compare that to the dealings of Clear Channel Communications, the giant national media company. From the late 1990s until 2001, Clear Channel gobbled up Maine radio stations, until it had acquired 17 broadcasting outlets at a cost of more than $35 million. On May 1, it announced it was selling all of them as part of a move to concentrate on bigger markets.
The buyer? Vitali and his new company, Blueberry Broadcasting.
The price? Just $11 million.
Clear Channel turned to Vitali after another deal to sell the stations fell through, but it took nearly two years to work out an agreement. "It was a fair deal, given the current cash flow of the radio stations," Vitali said. "Values of radio stations have gone down in the last couple of years."
Once the sale is approved by the Federal Communications Commission, probably by September, Blueberry will be a dominant player in the Augusta, Bangor, mid-coast and western Maine markets, with such properties as WTOS, WVOM, WABK, WCME, WRKD, WKCG, WQSS, WGUY and WWBX. The stations currently air formats ranging from talk to country to oldies to hard rock to adult contemporary.
Will there be changes? The standard answer in cases of a broadcasting ownership change is to avoid panicking the current staff by saying no, everything will remain the same. Vitali isn't much for the standard answer.
"I don't know yet," he said. "It would be disingenuous to say we're not going to make any changes … We have to get in there and really work these properties. That's the value of local ownership. We can bring, hopefully, a focus to these properties."
Vitali said Blueberry has financing from a group of private investors who've backed other projects he's done, as well as from TD Banknorth and Mariner Tower, a cellular-phone tower company he owns.
Vitali will serve at president and chief executive officer of Blueberry. Bruce Biette, a former broadcasting executive at several Maine stations (including WGAN in Portland, where he once fired me), will be the chief operating officer.
Al Diamon can be e-mailed at firstname.lastname@example.org.