Broadcasting Oct 31 - American Radio History

1 TOP OF THE WEEK I
Bill Simon, partner buy out
Forward Communications
Wesray Corp. will get group of
five AM's, five FM's, six TV's
for a reported S87 million
Forward Communications Corp. last week
announced that it had reached a tentative
agreement to be purchased by Wesray Corp.,
a Morristown, N.J., private investment
banking firm headed by former secretary of
the Treasury, William E. Simon, and his
partner, Raymond Chambers. Although nei-
ther side would release financial details, the
purchase price is reported to be about $87
million.
Forward Communications is a Wausau,
Wis. -based group owner of six TV's, five
AM's and five FM's. A closely -held com-
pany, its major stockholders include Em-
ployers Insurance of Wausau, John S. Stur-
tevant Family Trusts and Merrill Publishing
Co.
According to Thomas Bolger, president of
Forward, and Wesray, details are still being
worked out, but a final agreement is expect-
ed this week or by the middle of next week at
the latest. Forward's chairman, Richard
Dudley, said he anticipates a filing at the
FCC by early December.
In an interview, Chambers said that Wes -
ray would build upon the Forward acquisi-
tion as a "nucleus" to expand its interests in
broadcasting. He said another company
would be formed with Wesray's principals as
stockholders. In addition, Chambers said,
some of Forward's management would be
given the opportunity to participate as equity
holders. Chambers declined to indicate how
much debt, if any, would be assumed in the
purchase, or where the money would come
from.
Forward's acquisition by the Wesray part-
ners (the firm's name is an amalgam of Si-
mon's initials and Chamber's first name) is
the first investment in broadcasting or cable
by two investors regarded for their financial
acumen. Last year in a highly publicized
deal, they bought Cincinnati -based Gibson
Greeting Cards from RCA for Sß0 million-
$85 million in a leveraged buyout, using $1
million in equity and financing the balance
through a $46- million bank loan secured
against Gibson's assets, and raised the re-
maining $33 million through a sale /lease-
back agreement of three company ware-
houses with a tax shelter company. Later,
when the company went public, Wesray's
$1- million investment rose to $66 million.
Chambers described Wesray's purchase as
"not at all like anything we've done before,"
and said the deal would not be structured like
Gibson Greeting Cards. Day -to -day oper-
ations would be left to Forward's present
management team, which Chambers said
would stay in place. "We're mainly financial
investors," he commented.
A local media broker who has worked
with Forward in the past was taken by sur-
prise and observed the sale was "very quietly
done." The company has a reputation as a
profitable, well -mn corporation and he
could see no financial reasons to sell the
group. He speculated that the age of stockholders
was a factor. Dudley said that it was
"just an opportune time" to sell.
The Forward television stations are:
WRAU -TV (ch. 19, ABC) Peoria, III.; KCAU-
TV (ch. 9, ABC) Sioux City, Iowa; KOSA -TV
(ch. 7, CBS) Odessa, Tex.; WTRF -TV (ch. 7,
CBS) Wheeling, W.Va.; WMTV(TV) (ch. 15,
NBC) Madison and WSAW -TV (ch. 7, CBS)
Wausau, both Wisconsin. Forward's radio
division includes: WKOE(AM) -WBGM(FM) Tallahassee,
Fla.; KWLO(AM)- KFMW(FM) Waterloo,
Iowa; KVGB -AM -FM Great Bend, Kan.;
KVOX -AM -FM Moorhead, Minn., and WKAU-
AM-FM Kaukauma, Wis. In addition, the
company owns the daily Marshfield News -
Herald in Marshfield, Wis. (circulation
16,000), and Forward Electronics Co., a
Wausau company that sells and installs private
phone systems.
l7
Galaxy gets more tenants
HBO, Viacom and Turner will use new
Hughes bird, joining SIN, C -SPAN
and Group W; earth stations will be
given away to stimulate interest
in the C -band satellite
RCA Americom's dominance of the pro-
gram distribution business for cable is in
jeopardy. Although its Satcom III -R satellite
remains Cable Net I-the primary means of
relaying programing to cable -network affili-
ates, Hughes Communications' Galaxy I,
launched last June, may soon challenge Sat -
corn III -R for the title.
Ending four months of speculation, three
cable programers -Home Box Office, Via-
corn International and Turner Broadcasting
System -announced sketchy plans for dis-
tributing their pay or advertiser -supported
services via the transponders they purchased
on Galaxy I before it was launched.
They will join SIN International Televi-
sion, Group W Satellite Communciations
and C -SPAN as Galaxy programers. SIN has
been beaming its two services- GalaVision
Simon and Chambers
Broadcasting Oct 31 1983
31
and SIN -to affiliates via its two transpon-
ders since the bird became operational early
last August. GWSC had announced last June
that its would use its four transponders for its
natiogal pay sports network, The Sports Net-
work. However, GWSC scrapped TSN earli-
er this month. According to David Beddow,
senior vice president, GWSC, it now plans
to use two transponders to feed affiliates of
its two regional sports networks in the
Northwest and in an area comprising Mary-
land, Delaware, North Carolina and parts of
Pennsylvania and Virginia. Beddow said
GWSC has subleased one of its remaining
two transponders to TBS. C -SPAN, which is
be the only service to lease a transponder on
the satellite, will simulcast its public affairs
service on Galaxy and Satcom III -R begin-
ning Jan. 1, 1984, and launch a second ser-
vice, similar to the first, by June 1984.
Realizing that the success of Galaxy I de-
pends on cable operators' having access to
it, the Galaxy transponder owners and
Hughes have agreed to pool their money and
purchase up to 6,000 earth stations and give
them away to cable operators. According to
industry sources, the earth station fund will
amount to $12 million, with $3 million corn-
ing from Hughes and the balance from the
programers.
According to HBO's Tony Cox, the pre-
miere cable network will use two of its six
transponders to deliver the East Coast feeds
of HBO and Cinemax. The West Coast feeds
will continue to be beamed via Satcom III -
R, he said. Cox said HBO is considering a
variety of options for its remaining four tran-
sponders, including a low -power direct
broadcast satellite service. 'That's clearly an
option," he said, "but we have nothing to
announce."
TBS plans to use its two transponders on
Galaxy I for distribution, starting perhaps as
early as this week, of CNN and CNN Head-
line News. TBS's Terry McGuirk said TBS
will continue to transmit the services over
I