RADIO FORAY IN PLAY
Murdoch, Milken sell Premiere to Jacor
News Corp. chairman Murdoch and disgraced junk bond king Milken will walk away from Premiere with a profit of more than 250% on their initial investment, made through Archon Communications. Archon, which is half-owned by News Corp. and half-owned by the Milken family trusts and Archon's co-CEOs Kenin Spivak and Bob Fell, put $17.6 million into Premiere for a 34% stake valued in the deal at $62.6 million.
That's small change for the mogul and his longtime adviser but still a big return. "I'm very happy with this outcome," Spivak said Tuesday.
And News Corp. will continue some promotional tie-ins with Premiere, according to the radio programmer's CEO Steve Lehman, including broadcast of a "Melrose Place" promo. Lehman said News Corp. and Premiere were also talking about a promotional link with the Fox Sports Net. News' representative on Premiere's board, News Corp. exec VP David Evans, did not return calls.
Both Lehman and Spivak attributed the decision to sell Premiere to the recent consolidation in the industry, which has created industry giants like CBS and Chancellor Media Corp., who have as many as 100 radio stations each. Premiere sells radio programming to stations around the country, but many of the new giants have their own programming arms that compete with Premiere.
"There is a tremendous amount of consolidation going on within the industry, and I felt that it was in the best interests of the shareholders of Premiere, for the long run, to end up with a strategic partner that had distribution," Lehman said.
Jacor, itself a fast-expanding radio broadcaster, is paying $18 a share for Premiere, which went public five years ago at $4 a share (adjusted for stock splits). Premiere stock closed up 37¢ to $16.62 Tuesday.
The deal winds up Archon for Milken and Murdoch. Spivak said Jacor is actually buying the company with its Premiere shares because that "made it easier for Archon and its shareholders to exit the investment."
While Archon Communications had considered other investments, Spivak said no other deals were done through the company, so its only asset was the Premiere holding.
