COUNTRY RADIO STATION KNIX SOLD FOR RECORD $84 MILLION
gds...@twlakes.net
sold Wednesday for a record $84 million - nearly twice the price paid for any
other local radio station.
KNIX-FM (102.5), arguably the most successful in Valley history, was sold by
its longtime owner, Owens Broadcasting, to [ Jacor Communications ] , one of
the country's largest radio station operators.
Also sold in the deal was KESZ-FM (99.9), an adult contemporary station that
had recently climbed to the top of the ratings. Its price tag was $58 million.
Owens Broadcasting was one of the Valley's last independent radio station
operators, and the last to own two full-powered FM outlets. It was managed by
Michael Owens, son of country music legend Buck Owens.
"It's bittersweet," Owens said of the decision to sell. "My dream was to keep
these stations and buy more, but that wasn't going to happen."
Owens said changes in federal regulation in 1986 have made it more and more
difficult for the smaller operations to compete. KNIX and KEZ simply fell
victim to the consolidation that is sweeping the industry.
"I'm stunned," said Mary Morrison, a Phoenix advertising executive. "The
business will never be the same."
The sale represents the end of an era, said Phyllis Stark, editor of Billboard
Magazine's Country Airplay Monitor.
"KNIX was one of the last powerhouse, family-owned stations," Stark said.
No changes are expected at either station, at least until the sale earns
government approval.
Owens said he expects Jacor to stay the course at the two stations, much as it
did with the successful KZZP-FM (104.7), another station it owns here. Jacor
also owns KMXP-FM (96.9).
"I doubt there will be too much change" even after the takeover, said Willy D.
Loon of KNIX's morning show. "I don't think you take the No. 1 and No. 2
stations and change them to play pig-Latin punk jazz."
Owens informed his staff at an emotional meeting at 1 p.m. Wednesday. Loon
said the staff realized a big announcement was pending when staff members
from KESZ - popularly known as KEZ - began arriving at KNIX's Tempe studio.
KNIX has been the Valley's longtime leader in ratings and revenue since it
went on the air in 1968, rarely falling out of the Top 5. Program director
Larry Daniels signed on in 1971, Michael Owens came aboard in 1978, and his
brother, music director Buddy Owens, joined the station in 1985. Popular
on-air personality W. Steven Martin has been with KNIX for more than 20
years. Several staffers on the business side also have been with the station
20 years or more.
The station and its people have won numerous national awards for excellence -
from the Country Music Association, the Academy of Country Music and from
several industry magazines.
Owens and his staff are well known in the community for their professionalism
and loyalty.
Owens picked up co-ownership and management of KESZ in a deal with MAC America
Corp. in July 1997. MAC America, owner of Channel 3 (KTVK), bought the station
in 1990 for $10.4 million.
The history of KEZ, home of the popular morning show of Beth McDonald and
Bill Austin, couldn't have been more different from that of KNIX. It started
in 1986 after a format and call-letter switch, playing the likes of Whitney
Houston and Rod Stewart. It survived a crowded adult-contemporary field in
the early '90s, when at least five stations were playing some variety of the
format.
MAC America's purchase of the station gave KEZ additional resources, enabling
the station to advertise more heavily and to gain exposure on Channel 3.
Since then, Beth and Bill have become the top- rated morning show among
women. The union with Owens propelled the station into the No. 1 position it
gained in the recent fall ratings period.
"Michael Owens gave it another kick," McDonald said. "I'd like to see him stay
on."
Owens said the decision to sell was precipitated by a radio market that has
changed substantially since restrictive ownership rules were lifted by the
1996 Telecommunications Act, a federal law that deregulated several
industries.
"The vital resources to compete and provide superior service to our audience
are becoming less available to smaller, locally owned companies like ours,"
Owens said in a statement. "I believe Jacor will bring those resources."
Among the things that have happened, he said, is that a company with multiple
stations around the country can get the break on musical releases. KNIX's
main competitor, KMLE, got the break on Garth Brooks' 1997 album, Sevens, as
part of Chancellor Broadcasting, another radio conglomerate.
The sale completes a tumultuous few years for Owens Broadcasting. Signaling
its determination to compete against the likes of Chancellor, which owns
seven Valley stations besides KMLE, Owens entered into the deal with MAC
America in order to pick up KOAZ-FM (103.5). He brought the popular team of
Tim Hattrick and Willy D. Loon back to town from Chicago, where they had
spent a year after leaving KMLE, and changed the name of the station to KWCY
- Wild Country.
But in a country music climate that was cooling off from the heated times of
the late '80s and early '90s, KWCY made little headway in the ratings. The
station was sold to Z Spanish Media in October, and Tim and Willy moved to
KNIX.
Owens earlier had sold his AM property, KCWW-AM (1580), to [ ABC ] . Radio
Disney, using the call letters KMIK, now airs on that frequency.
Consolidation of radio stations under a handful of large companies has forced
more and more independent stations to sell as prices have climbed
substantially.
Consolidation has meant greater economies of scale, companies with far greater
resources and clout, and lower overhead for individual stations.
Recently, the owners of KFYI-AM (910) and KKFR-FM (92.3) fell victim to the
same pressures and were sold for $90 million to Chancellor.
(Copyright 1999 Phoenix Newspapers, Inc.)
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Publication Date: March 18, 1999
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