Shamrock to Expand Presence in Radio : Broadcasting: The company, owned by the family of Roy E. Disney, plans to buy more stations in the wake of new FCC regulations.
Most families have traditions such as Sunday dinner and a special recipe for pot roast.
In keeping with the Disney family heritage, Shamrock Holdings Inc. is planning to invest more heavily in radio stations.
Shamrock, based in Burbank, is wholly owned by the family of Roy Edward Disney. The 62-year-old nephew of the late Walt Disney started Shamrock in the late 1970s as an investment firm, and over the years it has bought and sold interests in companies ranging from soybean processor Central Soya to oil-services concern Enterra Corp.
On Monday, Shamrock agreed to sell its Music Plus and Sound Warehouse music and video chains to Blockbuster Entertainment Corp. for $185 million. Another Roy Disney company, Trefoil Capital Investors, controls sneaker-maker L. A. Gear.
But Shamrock’s roots are in broadcasting. Roy Disney owned television and radio stations before his company moved into other industries in the mid-1980s.
Shamrock now owns two Texas television stations and 14 radio stations in San Francisco, Kansas City, Denver, Seattle, Houston, Atlanta, Pittsburgh, Detroit and Phoenix.
Now Shamrock wants to buy more radio stations, figuring that the recession has driven prices down to a bargain. This mirrors a strategy recently adopted by Disney’s son, Roy Patrick Disney, 35, and the younger Disney’s Apogee Communications Inc.
Apogee was formed one year ago and has been snapping up radio properties.
Industry insiders said buying into radio now is a smart move.
“The timing is better now than it’s ever been” to buy radio stations and hold them for price appreciation, Tucson-based radio and television broker Frank Kalil said.
The radio market is in a slump and advertising is down, which has caused prices for stations to fall by 30% to 50% in recent years--except in major markets such as Los Angeles and New York, where prices continue to rise.
Shamrock’s decision to buy more radio properties also coincides with new Federal Communications Commission regulations that went into effect in August, allowing a single owner to hold more radio properties. The new FCC rules allow 30 FM stations and 30 AM stations to be under common ownership.
Previously, federal regulations restricted an owner to no more than 12 FM and 12 AM stations nationwide.
The revised FCC rules also increases the number of stations that may be commonly owned in a single market, basing the number allowed on the size of the market.
In a news release, Stanley P. Gold, Shamrock’s chief executive, said, “After careful analysis of the long-range growth potential of radio broadcasting nationwide, a strategic decision has been made to broaden Shamrock’s business base under new regulations recently formulated by the Federal Communications Commission.”
Although radio station prices are still well below levels of two to three years ago, Apogee’s president, James A. Johnson, said prices in certain markets have rebounded slightly because of the new FCC rules allowing a company to own more stations in one city.
“It makes it more efficient for operators in those markets,” he said. “That’s affected prices.”
Apogee completed the acquisition of two stations in Portland, Ore., last week for $5.5 million, moved its headquarters there from Burbank, and has made an offer on another radio station.
Another Disney family company, Retlaw Enterprises Inc., which is owned by Walt Disney’s widow, Lillian, and their two daughters, owns several television stations.
Like other family members, Roy E. Disney shuns publicity, and he could not be reached for comment.
He is the son of the late Roy O. Disney, who co-founded Walt Disney Co. with his brother Walt. Roy E. Disney is also a major stockholder and vice chairman of Walt Disney Co. and Forbes magazine estimates his net worth at $530 million.
To help with its planned expansion, Shamrock said Bill Clark, president and chief executive of Shamrock Broadcasting since 1988, has been promoted to chairman and chief executive of the subsidiary.
Meanwhile, Martin W. Loughman, owner of radio company KOOL Communications Inc. in Denver and a former Shamrock executive, has returned as Shamrock Broadcasting’s president and chief operating officer.
Clifford A. Miller, a longtime Disney associate and Shamrock spokesman, said Clark would focus on radio acquisitions, while Loughman handles daily operations.
“We needed more firepower at the top,” he said.
Miller said Shamrock would seek properties in cities where it already owns radio stations, such as San Francisco or Denver.
The company would also like to buy its first stations in top markets such as Los Angeles, New York and Chicago, he said.
The amount of capital Shamrock would have to raise for potential acquisitions isn’t clear, Miller said, as it depends on how many stations it buys and how the deals are structured.
Shamrock might buy individual stations, acquire a group of stations owned by another company, or merge with another broadcaster, he said.
Shamrock is studying offers by others interested in investing with Shamrock, Miller said. “In the past, we would have said no, because we didn’t need it and we were a private company,” he said. “But the new FCC rules make it practical and sensible for us to broaden our horizons.”
Shamrock also said it was considering buying cable television systems. But, Miller said, “I’d consider that a low priority right now. Radio is a priority.”
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