Dan Snyder's Deal Stalls but WGMS Ponders Format Change
Thursday, January 4, 2007
Redskins owner Dan Snyder's purchase of classical music station WGMS-FM appears to be in jeopardy because of a disagreement over the selling price.
Even if a sale doesn't occur, WGMS's future as a classical station is uncertain, people close to its parent company say. One intriguing possibility, they say, is that the station's present owners could turn WGMS into a sports-talk outlet that would compete against Snyder's fledging radio company.
Although Snyder hasn't walked away from WGMS, there have been no formal negotiations between Snyder's Red Zebra Broadcasting and WGMS's owner, Bonneville International, since news of a preliminary agreement leaked early last month.
Executives close to the negotiations say Snyder has reconsidered his initial offer -- about $48 million -- but Bonneville has declined to accept a lower price. "The ball is in their court, and they're not hitting it back," said one Bonneville source, who spoke on the condition of anonymity because his company isn't commenting publicly.
According to people with both companies, Snyder was upset by comments made by an unnamed Bonneville official who last month suggested that the team owner was overpaying for the station. The executive told The Washington Post, "If someone wanted to buy your house and was willing to pay 50 percent more than it was worth, you'd do it."
Snyder wanted to buy WGMS, which broadcasts on two FM frequencies (103.9 and 104.1), to reach a larger portion of the Washington metropolitan area. His stations, known as Triple X ESPN (730 AM, 92.7 and 94.3 FM), are weak and interference-plagued, which makes them less than ideal flagships for Redskins radio broadcasts. As a result, the stations have averaged about half of a percentage point of the local radio audience since launching this past summer.
The potential unraveling of Snyder's plans for WGMS could trigger a realignment of several radio stations in the Washington area, including a format change for WGMS.
Bonneville has begun to weigh alternatives for WGMS, which has broadcast classical music for almost 60 years. The company is considering dropping classical music for sports-talk programming -- in effect, turning the tables on Snyder by transforming WGMS into a competitor of the Triple X stations.
Bonneville would be able to take advantage of the same thing that Snyder has been seeking: WGMS's relatively strong signals, one executive said. Bonneville could reach far more potential listeners than Triple X and would be on the more-popular FM band compared with another local sports-talk station, WTEM (980 AM).
Bonneville already operates stations with news and talk formats locally, including all-news WTOP (820 AM and 103.5 FM), government news WFED (1050 AM) and Washington Post Radio (1500 AM and 107.7 FM), in a venture with the Washington Post Co. The multiple outlets would enable Bonneville to cross-promote a new sports station and could be used to air live sports broadcasts, the executive said.
Bonneville, however, would likely face a public-relations backlash if it dropped WGMS's classical format. In addition, switching to sports might prove uneconomical for Bonneville. The sports-talk audience is relatively small, and two stations (Triple X and WTEM) already compete for it.
As another option, WGMS could switch to a rock or pop-music format, executives say. In recent weeks, Bonneville has shown signs of preparing to drop classical; in addition to accepting a preliminary offer from Snyder to sell WGMS, the company has offered to donate its library of classical recordings to public station WETA-FM (90.9) in the event of a sale.
"At this point," a Bonneville executive said, "we have to look at everything."
WETA appears poised to fill any void in the classical music market. Its board authorized the station to switch from a news-and-talk format to classical music if WGMS changes its format. WETA was primarily a classical-music station until early 2005.