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TheBuzz

Erika Engle

Friday, May 7, 2004


The radio deal
cat is out of the bag,
after all these years



CORRECTION

Thursday, May 27, 2004

New Wave Broadcasting LP President Dex Allen is not an owner of the company, as reported in TheBuzz on Page C1 May 7. The column also reported that retention bonuses of $5,000 were offered to staff members; station officials say amounts varied among personnel.



The Honolulu Star-Bulletin strives to make its news report fair and accurate. If you have a question or comment about news coverage, call Editor Frank Bridgewater at 529-4791 or email him at corrections@starbulletin.com.

One of Honolulu radio's worst-kept secrets is now official. Pending federal approval, the four remaining radio stations belonging to New Wave Broadcasting LP have been sold to Maui-based Visionary Related Entertainment LLC for $11 million.

Applications to transfer the broadcast licenses of KQMQ-FM 93.1, KPOI-FM 97.5, KHUI-FM 99.5 and KDDB-FM 102.7 were filed late Wednesday with the Federal Communications Commission. The financial transaction will close once FCC approval is granted, usually within 90 days of filing, said Visionary President John Detz.



Radio top players

The Hawaii holdings of Visionary Related Entertainment LLC and Salem Communications Corp. prior to the pending acquisitions:

Visionary stations

Oahu
KUMU-FM 94.7/AM 1500
KAHA-FM 105.9
Kauai
KQNG-FM 93.5/AM 570
KSRF-FM 95.9
KSHK-FM 103.3
KUAI-AM 720
Maui
KAOI-FM 95.1/AM 1110
KDLX-FM 94.3
Maui and the Big Island
KNUQ-FM 103.7

Salem stations

Oahu
KHNR-AM 650
KGU-AM 760
KAIM-AM 870
KHCM-AM 940
KJPN-AM 1170
KAIM-FM 95.5.



Visionary will buy KQMQ and KDDB and retain the stations' formats, while in order to meet federal ownership limits it is simultaneously selling KPOI and KHUI to California-based Salem Commu- nications Corp. in a $3.7 million asset purchase.

Rumors saying "it's a done deal" have circulated for years, but have intensified in recent months.

The sale makes Visionary the largest radio group in Hawaii, as it will have 14 stations on Oahu, Maui, Kauai and the Big Island.

"The Q" plays a 1970s and 80s oldies format while the format at 102.7 "Da Bomb" is known as urban contemporary hit radio. The Q and Da Bomb were rated Nos. 4 and 5 among 25-to-54-year-old adults in the recent Arbitron radio ratings. KPOI is ranked No. 12, though its primary target audience is 18-to 34 year old men.

Neither Detz nor Salem Vice President and General Manager T.J. Malievsky wanted to discuss plans for personnel.

New Wave President Dex Allen sold all 24 stations belonging to his California-based Commonwealth Communications last October for $41 million. It was widely expected he would also move to sell his interest in the New Wave stations, though he told the Star-Bulletin at the time, "we are not trying to sell these radio stations." He shared ownership of New Wave with a hui of East Coast investment bankers.

The New Wave-Visionary deal was brokered for New Wave by Arizona-based Kalil & Co.

New Wave originally entered Honolulu in 1998 when it bought KQMQ-FM/AM, KPOI-FM, then-KORL-FM 99.5 and then-KHUL-FM 102.7 from Caribou Broadcasting, when the company was headed by President and Chief Operating Officer Charles Cohn. After a 2001 shakeup, Cohn was replaced by Allen.

Under Allen, a succession of two general managers have run New Wave, instituting repeated staff and budget cuts in order to stem the stations' losses, which were well-known in the industry.

To save on wages and benefits, several air personalities' voices appeared on more than one of the cluster's stations seven days a week, though they were paid part-time wages and held to a maximum of 19 hours' work a week.

More recently, as rumors of the impending sale ebbed and flowed as regularly as the surf, New Wave offered workers $5,000 retention bonuses, according to a former New Wave employee. Management met with employees "one at a time to let them know there was no sale, but if and when there is a sale, they'll give employees the bonuses," he told TheBuzz recently. "I think they did that so that everybody would be quiet."

Employees were not given documentation guaranteeing the bonus payments, he said.

Such bonuses are routinely offered to higher-ranking executives to keep a company operating prior to a sale, but it is the first time industry insiders could recall such bonuses being offered to nonexecutive air staff.

Along with rumors of a sale there has been speculation that Maui-based Visionary would import radio talent to Honolulu via voice tracking, a common industry cost-saving practice where announcer-shtick is recorded ahead of time and played back on a computer hard-drive along with music, commercials and other programming elements.

Visionary has not invoked that practice at KUMU or KAHA, purchased from a Connecticut company earlier this year.

"I consider Honolulu to be very unique," said Detz. "I really have tremendous respect for the air crew over at New Wave and really look forward to working with them," he said.

Programming on heritage rock station KPOI and the 1980s and 1990s hits of sister station "Bob-FM" on 99.5 is uncertain.

T.J. Malievski, vice president and general manager for Salem Media of Hawaii Inc., would not divulge the company's plans.

Salem bills itself as the leading radio broadcaster focused on religious and family-themed programming.

"It's a great addition to our cluster, it's going to make us stronger by giving us more FMs," he said.

Malievsky served as vice president and general manager for Florida-based Sudbrink Broadcasting in the early 1980s. "I was the person who built KPOI into "98-Rock" in 1981 ... and we turned it into a monster. It was very successful," he said.

The station was later sold to Kilohana Broadcasting, run and later resold by Chuck Cotton, now the market manager for Clear Channel Communications' seven Honolulu stations.




See the Columnists section for some past articles.

Erika Engle is a reporter with the Star-Bulletin. Call 529-4302, fax 529-4750 or write to Erika Engle, Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210, Honolulu, HI 96813. She can also be reached at: eengle@starbulletin.com


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