Los Angeles could soon have its first FM radio station broadcasting in Mandarin or Cantonese if Magic Broadcasting completes the sale of old-school hip-hop station KDAY (93.5) to a group of Chinese media executives.
Magic filed an application last week with the Federal Communications Commission to sell KDAY of Redondo Beach, along with sister station KDEY-FM (93.5) of Ontario, to RBC Communications Inc., an Irwindale holding company with Chinese backers, for $19.5 million.
Since the stations sold for $120 million in 2004, the deal underscores how radio stations have fallen in value even in major markets such as Los Angeles.
But the deal also raises eyebrows because KDAY, which plays tracks from the heyday of L.A.’s rap scene and features ads from no-money-down car lots, would likely be replaced by Chinese programming by the new owners.
“They’re not going to run it as an urban station,” said Saul Levine, a radio veteran who owns three stations in Los Angeles including country station KKGO-FM (105.1).
Given the vast Chinese emigrant community in Southern California, radio experts believe there’s more room on the dial for Cantonese and Mandarin.
Three stations in Los Angeles carry such programming around the clock on the AM dial – KAHZ (1600) of Pomona as well as KMRB (1430) and KAZN (1300) of Pasadena, which are all owned by Multicultural Radio Broadcasting Inc. of New York.
The addition of an FM Chinese station would no doubt stir the wok, especially since RBC’s owners are Chinese media heavyweights.
RBC is 80 percent owned by Anthony Yuen, a naturalized American citizen who is an on-air personality for Chinese cable TV company Phoenix Satellite Television Holdings. The remaining 20 percent is owned by an American division of Phoenix, which has an office in the San Gabriel Valley.
Dave Sweeney, executive vice present at Multicultural Radio Broadcasting’s L.A. office, expects he will have competition from RBC and welcomes it. He believes he could benefit because a switch could draw more attention from advertisers to Chinese media.
He said his stations will stick by their talk radio programming. Some is produced in Los Angeles and the rest imported from China. RBC would have to find its way into the market, Sweeney said.
“They’re going to have an uphill battle trying to generate a large audience,” he said. “We feel that we have a pretty good grasp on that audience now.”
The purchase represents the first foray into American radio for Phoenix, which already reaches millions of TV subscribers in the United States via DirecTV and Dish Network. Phoenix’s TV programming includes news and talk shows, as well as serialized fare.
The $19.5 million price tag makes it the largest radio transaction of the year in the United States, according to trade publication Inside Radio.
Magic previously tried to sell the stations in 2010 for $35 million. However the deal fell through after delays related to FCC indecency complaints that ultimately deterred the buyer, said a person familiar with the deal who asked for anonymity.
Radio Insight reported that the deal soured in part due to litigation between KDAY’s controller, Durden Enterprises Inc. of Panama City, Fla., and Magic Broadcasting founder, Don McCoy, also of Panama City. Durden loaned money to McCoy for the purchase of KDAY a decade ago and took over voting control of the station in 2009 when McCoy didn’t make payments.
A source close to McCoy said last week’s sale was made without his consent and that he will attempt to block it. McCoy hinted at his opposition last week when speaking with LARadio.com.
“I don’t understand someone that would buy a station with a stockholder lawsuit filed against it,” he told the website. “It will be interesting to see what happens.”
McCoy and Durden could not be reached for comment. A source close to the deal downplayed McCoy’s ability to block it.
The deal is awaiting FCC approval.
However, the biggest question on the minds of listeners is what will become of KDAY’s programming, which shifted formats from a Spanish-language station to old-school hip-hop when it was purchased by Magic.
Today, the station’s personalities include PJ Butta, Brandi Garcia, DJ Dense and Class1c. Station events include this week’s Krush Groove concert at the Gibson Amphitheatre at Universal City, featuring Bone Thugs-N-Harmony, Tha Dogg Pound, Warren G and Compton’s Most Wanted.
Mary Beth Garber, executive vice president at Katz Radio Group on the Miracle Mile, said there is no sure bet of what will become of KDAY and that any decision would be based on a performance review. Last month, it was 28th in the L.A. market Arbitron ratings.
If the new owners are inclined to mix it up by introducing a Chinese format, she said the station would have its pick of quite a bit of content. It would also present a challenge to Multicultural Radio’s block of AM stations.
“They have access to content that other stations don’t necessarily have,” she said. “It would certainly be competition. Multicultural would be fighting for share as opposed to total ownership of that advertising.”
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