Urban One, one of the largest African American-owned media companies, has agreed to sell off its radio business unit in the city of Detroit. The company also reported losses in revenue in the first quarter of 2018.
For $12.7 million, Urban One will sell WPZR 102.7 FM to Educational Media Foundation in California. EMF will pay $12.2 million in cash for the company’s Federal Communications Commission license and signals, Peter Thompson, Urban One’s executive vice president and CFO told Crain’s Detroit Business.
“We were approached and offered a good price. I think with the multiple cash flows that we have, it makes it a good asset sell for us,” Thompson said. “We can retain that money and pay down debt, and we can stay in the format with these extra translators. We lose a little bit of cash flow, but it makes it good financial sense for us.”
Under the terms of the deal, according to insideradio.com, EMF, which is already in the Detroit market with five FM translators carrying its contemporary Christian “K-Love” network, will transfer three of the translators to Urban One, allowing the company to keep its Detroit Praise Network airing, in combination with its existing translator.
In its recent quarterly earnings report, the company reported a 1.6% decrease in revenue to approximately $99.6 million. The company also saw a 7% loss of revenue for its broadcast and digital divisions to approximately $32.5 million. Urban One slashed its operating budget by more than half down to $7.3 million for the three months ending March 31, compared to $16.5 million for the same period in 2017. The company lost approximately $22.6 million or $0.48 per share compared to net loss of approximately $2.3 million or $0.05 per share for the same period in 2017. Adjusted EBITDA was approximately $28.5 million for the three months that ended March 31 compared to $27.7 million for the same period in 2017, an increase of 2.7%.
“I was pleased that we were able to grow our Adjusted EBITDA, despite some softness in the radio markets and ratings challenges at TV One,” Alfred C. Liggins, Urban One’s CEO and President said.
While revenues were down across all of its Urban One’s business units, the company said its digital revenues continue to do well thanks to its 2017 acquisitions of the Bossip and Madame Noire brands and websites. According to Miller Kaplan, a certified public accounting firm, Urban One’s radio clusters outperformed their markets by 190 Bps.
Urban One, named one of BE’s largest black businesses in 2017, made a major push in 2017 to build a portfolio of brands that are rooted in black culture with strong millennial audiences in mind, by acquiring Madame Noire, gossip website, Bossip.com and Hip Hop Wired, making it one of the largest players in the African American media space.