Radio One Inc., the largest radio broadcasting company targeting urban African-American audiences, said yesterday that it has struck three deals that will give it 21 new stations in 10 markets around the country.
"These acquisitions make Radio One a truly national radio company," said Alfred C. Liggins III, chief executive officer, president and treasurer of Lanham-based Radio One. "We have now created the most far-reaching media vehicle targeting African-Americans in the U.S."
By far the largest of the three agreements is Radio One's purchase of 12 stations from Clear Channel Communications Inc. for $1.3 billion. A deal between the two companies had been expected for some time; Clear Channel, the biggest station owner in the country, is seeking to sell some of its properties in order to gain Federal Communications Commission approval for its $16.6 billion bid for AMFM Inc.
The stations Radio One is buying from Clear Channel are clustered in major markets, including Los Angeles, Houston, Dallas, Cleveland and Miami.
In a separate transaction, Radio One is buying a small Southern radio chain, Davis Broadcasting Inc., for $24 million in cash and stock. Davis owns one station in Charlotte, N.C., and five in Augusta, Ga. Charlotte is the 20th-ranked African-American market in the country, while Augusta is the 40th.
Finally, Radio One said it has agreed to buy three radio stations and one low-powered television station in Indianapolis, the No. 31 African-American market, from IBL LLC and Shirk Inc. for $40 million in cash and stock.
Radio One expects all three deals to close within 60 to 90 days. The agreements require FCC approval.
Analysts praised the acquisitions, saying the purchases fit nicely with Radio One's ambition to solidify its already formidable position in the African-American radio market. With one exception, all the radio stations being bought play what is known in the industry as an "urban" format.
"They bought those stations because they fit the strategic purpose of purchasing stations in the top 40 [African-American] markets in the country," said James B. Boyle of First Union Securities Inc. in New York. "They bought them at reasonable [prices] and they should be accretive in the near future."
Radio One officials said the company may look to broaden its media portfolio, perhaps including new radio-network or Internet ventures. But, Liggins said, purchase of the low-powered television station in Indianapolis is "absolutely not" a sign of a new television strategy for the company.
Radio One's stock fell $2.3125 yesterday, closing at $63.4375.