Beasley Broadcast Inks Deal With GGB Las Vegas
Beasley Broadcast Group, which currently owns three radio stations in the Las Vegas market, expects that the transaction will be immediately additive to its operating results.
GGB Las Vegas is an entity formed by George Beasley, chairman and CEO of Beasley Broadcast Group, for the purpose of acquiring KOAS-FM and KVGS-FM from Riviera Broadcast Group, for approximately $8.5m.
GGB Las Vegas' acquisition of KOAS-FM and KVGS-FM is expected to be completed in the third quarter of 2010 and is subject to FCC approval and other customary closing conditions. During the period prior to the consummation of the acquisition, GGB Las Vegas will provide services to Riviera Broadcast Group for KOAS-FM and KVGS-FM pursuant to a local marketing agreement.
Beasley Broadcast and GGB Las Vegas have entered into a management agreement whereby Beasley Broadcast will receive 40 percent of any advertising revenue sold by its existing Las Vegas sales teams for KOAS-FM and KVGS-FM until such time that GGB Las Vegas completes the acquisition of the stations.
Once the stations are acquired by GGB Las Vegas, Beasley Broadcast will provide both stations with sales and other management services and will be entitled to the better of 50 percent of the aggregate monthly station operating income generated by KOAS-FM and KVGS-FM or a total of $10,000 per month.
The management agreement between Beasley Broadcast and GGB Las Vegas will have an initial term of three years. In addition, GGB Las Vegas has granted Beasley Broadcast an option, with a term concurrent with the management agreement, to purchase KOAS-FM and KVGS-FM for $8.5m plus any losses incurred until such time that Beasley Broadcast elects to exercise the option.
The management agreement and other terms of the transaction were first approved by the audit committee of the board of directors of Beasley Broadcast Group, and then by the full board.
George Beasley said: “This transaction allows Beasley Broadcast Group to leverage its existing Las Vegas operating and management capabilities to immediately generate new cash flow through a structure that requires no capital commitment.”
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