By Paul Farhi
Washington Post Staff Writer
Wednesday, January 19, 2011; 8:02 PM
WTOP, the most popular and profitable radio station in the Washington area, is getting a new owner, a Minnesota company that vows not much else will change at the outlet that airs news, traffic and weather like clockwork.
In a deal that surprised much of the radio industry, Hubbard Broadcasting said Wednesday it was buying 17 stations, including Washington's WTOP and WFED, from Bonneville International for $505 million.
Hubbard, a small, family-owned outfit with a long history in the broadcasting business, was an unusual company to be making one of the largest radio-station deals in years. Radio companies grew wildly a decade ago in a frenzy of deal-making. But that binge had subsided, leaving many of the newly enlarged companies saddled with debt and teetering near bankruptcy as the recession socked the industry.
WTOP (whose flagship is at 103.5 FM) is the crown jewel among the stations Hubbard will acquire. The all-news outlet has been the region's top-rated radio station for years and is by far its most lucrative.
The station ranked second among all stations in the nation in revenue last year, according to BIA Financial, which tracks the industry. The firm estimated WTOP's annual revenue at $51.03 million, second only to Los Angeles station KIIS-FM ($55 million), the radio home of "American Idol" host Ryan Seacrest.
WTOP's strength may be its unvarying format: It broadcasts local and national news, and weather and traffic reports at predictable times, promoted by its signature slogan, "Traffic and weather together on the 8s."
WTOP's managers welcomed their new owner Wednesday, saying they've received assurances that the station will continue to operate as it does now. "I don't see a lot of change," said Jim Farley, vice president for news at the station. Hubbard "is the same kind of company as Bonneville, with the same kind of values. They believe in news. They believe in public service."
Hubbard, which is privately held and does not release financial data, will effectively quadruple in size with the purchase of the 17 stations. The St. Paul-based company now employs 154 people at its 12 TV and four radio stations; after absorbing Bonneville's stations in Washington, St. Louis, Chicago and Cincinnati, it will have 701 employees. No layoffs are anticipated.
In addition to WTOP, Hubbard will also acquire Washington's WFED (1500 AM), which broadcasts news about government workers and federal contracting, and four other local stations. Two of the other stations (WWWT and WTLP, both FM) simulcast WTOP's programming. Another (WWFD-AM) repeats WFED's signal. The sixth, WBHQ-AM, is leased to a Spanish-language broadcaster.
The agreement between Hubbard and Bonneville includes an unusual provision: Bonneville's chief executive, Bruce Reese, and its chief operating officer, Drew Horowitz, will assume the same jobs with Hubbard after the sale is final.
Bonneville's top Washington manager, Joel Oxley, said having the same leadership will ensure stability and continuity for the local stations. "The idea is to keep a good thing going," he said.
WTOP employs about 100 people, including 50 in its newsroom. It will add 10 people next month when it begins producing its own traffic reports; some of those reports had previously been produced by an outside supplier, Metro Networks.
"Our family believes in this business," said Ginny Hubbard Morris, the granddaughter of the company's founder and the president of its radio arm (she will be chairman after the acquisition is approved by federal regulators). "We were looking for the right way to expand at the right time. We think this is a great opportunity."
Morris disputed the notion that radio is a fading technology, noting that millions of Americans listen each day. "We don't see that changing any time soon. When it's done right, it gives people something they can't get anywhere else."
She affirmed the no-changes line: "There should be absolute continuity. We like how these stations are run now."
Bonneville is a for-profit subsidiary of the Church of Jesus Christ of Latter-day Saints in Salt Lake City, which has been a successful radio station operator for decades.
Hubbard, by contrast, is a small operator not known for making showy acquisitions. Its stations are spread across Minnesota, Wisconsin, New York and New Mexico. It is most dominant in the Twin Cities, where it has long operated KSTP-AM, KSTP-FM and KSTP-TV, an ABC network affiliate.
Bonneville said Wednesday that it will continue to operate 14 stations in the western United States, including in Los Angeles, Phoenix, Salt Lake City and Seattle.
Hubbard's roots in the radio business go back almost to the start of commercial radio. The Hubbard family acquired its first station, KSTP-AM, in 1928.
In addition to operating his broadcasting company, Hubbard patriarch Stanley Hubbard played a role in the development of the satellite TV industry. In 1981, he started a company called U.S. Satellite Broadcasting to market TV service to small dish antennas. The venture was eventually absorbed by a General Motors-owned subsidiary, Hughes Electronics, which launched the now-established DirecTV satellite service.