Media mogul Paxson adds WIOD-AM to Florida kingdom
South Florida Business Journal. 16.40 (May 24, 1996): p4A.
Copyright: COPYRIGHT 1996 South Florida Business Journal, Inc.
MIAMI – WIOD 610-AM will see some major programming changes in the next few months, but it’s business as usual for new owner Lowell “Bud” Paxson, who this week paid $13 million for the radio station.
Talk show host Phil Hendrie is leaving, breathy “Passion Phones” yapper Erin Sommers could be gone and Neil Rogers might feel pressure to tone down his daytime act. But West Palm Beach-based Paxson Communications’ fast-paced expansion continues.
If the Federal Communications Commission approves the WIOD deal, Paxson will own eight radio stations in the Miami-Fort Lauderdale market, the nation’s 11th largest. Paxson estimated that the acquisition of WIOD from Cox Broadcasting will give him control of about a third of a radio market that grossed more than $140 million last year.
The deal means Paxson will own 34 radio stations in Florida, along with more than 300 billboards statewide.
“He’s the king of Florida,” said Mark O’Brien, vice president of BIA Publications in Virginia. “If you want to reach people in Florida, at some point your paths will cross with him.”
WIOD grossed $9.2 million last year, according to BIA estimates. FCC approval of the purchase is expected in August or September.
Paxson said Hendrie will leave WIOD to take a job at a Cox station in another market, and he hinted that Sommers’ talk show about sex might be off the station by fall. And Paxson – also founder of the not-for-profit Christian Network – would prefer to hear less scatology from Rogers, although he said he wouldn’t force the issue.
“I don’t necessarily find the programming before 6 o’clock offensive, but I have a problem with some of the language,” Paxson said of Rogers and Hendrie.
As for Paxson’s Florida kingdom, the Home Shopping Network founder said he plans to continue to expand his influence in Florida. His only four radio stations outside of the state – located in Cookeville, Tenn. – are for sale.
“We want to just be Floridians,” Paxson said.
The reason, he said, is the unusually high growth in Florida radio revenues, a trend he attributed to the state’s residents spending more time outside or in their cars than in other parts of the country.
“We believe that in the radio industry today, you have to have some sort of synergistic plan,” Paxson told reporters. “We chose a regional approach to our consolidation, and that’s the Florida approach.”
Paxson said he’s negotiating to buy other stations in the Miami-Fort Lauderdale market, although the WIOD acquisition gives him eight, the maximum allowed in one market by the FCC’s latest regulations. Paxson said he would be likely to unload WSRF-AM to make room for more desirable station. Paxson acquired the brokered-format WSRF on May I as part of a $57.5 million deal that also included WSHE-FM.
In addition to more stations, Paxson also is looking to take control of more of South Florida’s sports broadcasting. Paxson’s WINZ 940-AM broadcasts Miami Heat basketball games, while WIOD has a contract to broadcast the Miami Dolphins through the 1996 season. Paxson said he’s negotiating with team owner H. Wayne Huizenga to continue the Dolphins contract and to add the Florida Panthers and Florida Marlins to Paxson’s lineup.
Despite Paxson’s aggressive radio expansion, the company’s most dramatic growth is coming from the Infomall TV Network.
A concept reminiscent of the Home Shopping Network, Infomall calls for Paxson to purchase a TV station, then lease its time for infomercials. Paxson now has 35 stations nationwide devoted to Infomall, including WCTD-TV in Miami. Paxson officials claim 44.2 million TV households can view the Infomall.
Last week, Paxson paid $2 million for 19 acres in West Palm Beach. Paxson plans to build corporate offices on the property, along with two TV studios for producing infomercials and telemarketing facilities for taking orders from Infomall viewers.
Infomall is contributing significantly to Paxson’s bottom line: In the first quarter of this year, the project’s revenues of $12.7 million nearly matched Paxson’s radio revenues of $14.5 million. Infomall’s net profit grew from $615,000 in the first quarter of last year to $4 million for the first three months of this year.
Paxson’s buying binge has led to soaring revenues that have nearly doubled each of the past four years, from $17.1 million in 1992 to $32.1 million in ’93, then to $62.1 million in ’94 and $103 million last year.
Despite its impressive growth, Paxson’s bottom line hasn’t been nearly as stellar. From 1992 through ’95, the company reported losses totaling nearly $60 million. But Paxson admirers discount those numbers, saying the losses reflect the high depreciation and amortization costs associated with purchasing television and radio stations, along with high interest costs.
‘It doesn’t matter,’ said Bill Meyers, an analyst with Smith Barney. ‘Media companies are valued based on cash flow and not on reported earnings. Media investors don’t measure Paxson based on their earnings. They’re making strategic and prudent acquisitions.’
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Source Citation (MLA 7th Edition)
Ostrowski, Jeff. “Media mogul Paxson adds WIOD-AM to Florida kingdom.” South Florida Business Journal 24 May 1996: 4A+. PowerSearch. Web. 23 Feb. 2016.
Gale Document Number: GALE|A18602126