Akron, Ohio-based Gencorp Inc., corporate parent of General Tire and RKO General Inc., said Thursday that veteran broadcaster Dick Clark has agreed to buy all three of its satellite radio networks.
Officials of Clark's United Stations Radio Networks signed a letter of intent to purchase the networks late Wednesday in New York for an undisclosed sum, RKO spokesman Steve Ellis said. Radio industry sources put the purchase price at about $20 million.
The networks, which employ about 160 people and are headquartered in New York, each target specific age groups.
RKO I programming, for example, is aimed at 25-to-34-year-olds, and RKO II, 35-to-44-year-olds. RKO III (also known as RKO Radioshows) is a youth-oriented network that offers concert programming and features.
Because the Federal Communications Commission requires no hearings on a network change of ownership, United is expected to take control within a few weeks, Ellis said. Current RKO programming, which includes such shows as "Nighttime in America," "John Madden Sports" and "Newsweek on the Air," will remain, Ellis said.
RKO's shows will augment United Stations' own 1,300 hours of annual entertainment programming and will continue to be offered by satellite to RKO's 1,500 affiliates, including KRTH-FM and KHJ-AM in Los Angeles.
The networks have been for sale for at least the last two months, sources said, in part because they have failed to earn a profit since they were first created by RKO General in 1979.
Last year, the RKO networks became the source of a new set of problems for Gencorp when RKO executives admitted having overcharged network advertisers more than $8 million over a four-year period.
That admission came in the wake of a series of resignations of top-level RKO executives, beginning with RKO Radio Networks President Tom Burchill last June. Last month, RKO General Inc. Chairman Thomas O'Neil retired, turning the reins over to his nephew, Shane O'Neil, who became president of RKO General.
"In past months," Shane O'Neil said in the official statement announcing the sale, "we have examined a number of plans to continue RKO Networks' operations."
He said the company had received several offers but that "United came closer to our intent to keep the networks intact."
The company's admission that it had charged advertisers for commercials that affiliates had never broadcast mushroomed into a major threat to RKO's broadcast licenses last November. Even though company officials had begun to repay the $8 million in overcharges, the FCC is investigating charges that the networks are not fit licensees.
RKO General currently holds 14 radio and television licenses nationwide.