The Arlington-based Mutual Radio Network, best-known for its news service and Larry King talk-show programming, is being purchased by Westwood One, a radio programming service based in Culver City, Calif.
Terms of the deal, which came the day after Mutual's 51st anniversary, were not disclosed, but one informed source puts the sale price at close to $30 million. The transaction is scheduled to be completed in November.
"The Mutual Broadcasting System is the perfect acquisition for [us]," said Norman Pattiz, Westwood's founder and chairman. "It not only more than doubles our size, but it takes maximum advantage of operational potential that will allow us to expand our excellent margins."
Westwood One is buying the network from Amway Corp., the billion-dollar-a-year door-to-door distributor of household goods, which bought Mutual in 1977. Amway officials were not available for comment.
Although it is selling the radio network, affiliate contracts, studios and programming services, Amway will retain the network's satellite distribution system and other transmission facilities. The company, which recently introduced its new Multicomm satellite and radio data distribution network, has long expressed a desire to become a telecommunications network provider.
"They're buying the affiliation contracts," said Mutual spokesman Mark Feldman. "We have relations with 2,200 stations and we have 860 affiliates."
Westwood One, which is best known for airing rock concerts and similarly youth-oriented programming, will now have access to Mutual's older listeners through its extensive talk show and news programs if the transaction is completed.
"We're buying older demographics," said Westwood One's Pattiz. "We don't have a network news department or do much in the way of sports.
"What we're interested in, basically, is inventory: we're 24,000 30-second spots available for national advertisers -- Mutual is 40,000 30-seconds spots available for national advertisers."
Pattiz, a former television advertising salesman, said that the addition of Mutual to Westwood One would give his 11-year-old company more appeal to national radio advertisers who wanted to target both youth and older consumers.
Westwood One, which earned nearly $2 million on revenue of $12.8 million last year, currently does business with more than 3,800 radio stations. The company recently raised more than $30 million in a stock financing -- in part, to help fund this acquisition, according to Pattiz. Westwood One and Amway have been in serious negotiations over the last three months.
Mutual, which reportedly has annual revenue of nearly $30 million, has more than 200 employes -- most of them based in Arlington. Pattiz said that no personnel shakeups were planned and that he hopes that Larry King, Mutual President Jack Clements and News Director Ron Nessen would stay on after the acquisition.
The acquisition should make Westwood One the nation's second-largest commercial radio network. The largest radio network currently is the ABC Radio Network, with revenue in excess of $100 million a year.