On Monday, Connoisseur Media — the group led and founded by Jeff Warshaw — announced it was acquiring Alpha Media and its 207 radio stations in dozens of markets around the nation.
The move wasn’t completely unexpected or unprecedented on a variety of fronts. First, Alpha Media had been in cost-cutting mode for awhile, including a large round of layoffs last year. Additionally, Warshaw has not been shy in his approach of looking to acquire larger groups to expand his Connoisseur Media holdings.
But there hadn’t been much industry speculation that a deal between Connoisseur Media and Alpha Media was imminent. And yet, when reached by Barrett Media to discuss the acquisition, Jeff Warshaw admitted it had been several years in the making, starting when Alpha Media was emerging from Chapter 11 bankruptcy in 2021.
“I have tried to engage with Alpha for over four years,” Warshaw said. “Finally, last year, it was clear that they were looking for potential strategic opportunities, and that’s when we opened the dialogue.”
When asked why he was interested in purchasing the Alpha Media stations, Jeff Warshaw said they already closely align with the way he prefers to operate his stations.
“The heritage of these stations has been to be committed to the communities, being live and local, treating people with dignity and respect, and having a strong market position in attractive markets,” he shared.
Warshaw added that he wasn’t simply looking to add stations just for the benefit of having a large number of brands under his umbrella.
“I think that there is a benefit to scale. I’ve been trying to make an acquisition for quite a while — that’s not a secret — because we think that what we do as a successful and is vital to our communities,” Warshaw shared. “We’re big believers in having a substantial salesforce and local programming. Connoisseur is well known to have extremely high market share in our markets, very strong ratings, large staffs with tremendous relationships with the community and our advertisers.
“We’re not big believers in a small salesforce and being reliant on large national and regional advertisers. We like to focus on where we think we have more impact and control, which is in our local marketplace.”
Integration shouldn’t be a difficult thing for the new conglomerate to accomplish. Warshaw knows that each side will bring their best to the table.
“Before we integrate everything, we need to know how they operate from financial, digital, engineering, programming, and sales structure,” said Warshaw. “Obviously, we did as much work as we could prior to the acquisition, but now that it’s open to the entire company that this is what we’re doing, it’s a much better opportunity for us to understand what we’re doing and take the best of what they’re doing and integrate it.”
Generally, when two radio groups are involved in a sale, it’s not the smaller company purchasing the larger one. But that’s the case as Connoisseur Media — which owned 11 stations at the start of the week — acquires Alpha Media, which encompassed 207 stations.
But that expansion isn’t necessarily the end of the line for Jeff Warshaw and Connoisseur Media.
“I don’t have a crystal ball,” said Warshaw on other potential targets for mergers and acquisitions. “You never know what life has in store for you. But, certainly, we’re in a tremendous position to grow. We have a great balance sheet. We have great assets and strategy that seems to work. And we embrace being local and providing community service and being a great place to work. So we have every reason to think that we’ll be able to grow. This is not an industry at this moment that is on you super strong financial footing. There are real benefits to scale, and we think that we offer some of those benefits.”
In 2022, Warshaw reportedly offered near $1.2 billion to purchase Cumulus Media outright. He wanted to take the company private. The offer would have given Cumulus shareholders between $15 and $17 per share, which CEO Mary Berner declined. Berner reportedly felt the offer undervalued the company. The company closed Thursday’s trading with its stock price at 19 cents per share.
Warshaw said then, Connnoisseur Media was working on another, separate, “strategic acquisition” , which also didn’t materialize. Now that the dust has settled, Warshaw has strong opinions on the way things have shaken out.
“Our strategy has obviously been way different than Cumulus’ strategy. The performance of our company has been strong throughout. Personally, I think Cumulus has not been run to the benefit of its shareholders. Turning down my offer was not to the benefit of the shareholders at the time. History has certainly proved that to be correct,” said Warshaw.
“Throughout my career, I’ve always put my lenders and partners’ interests above mine,” he continued. “That’s one of the reasons that I have long-standing and beautiful relationships with everyone that’s ever invested or lent money to any of my companies. It’s just the way that we operate. Time has shown that it was not worth more than $15 then. We were never given a real shot. Our offer was never given full consideration, either of our offers. And it’s unfortunate for the shareholders.”
When asked if the deal with Alpha Media is an “I told you so” to Cumulus Media for not accepting his offer, Warshaw stopped short of that encapsulation.
“No, it’s not an ‘I told you so.’ It’s too bad that we weren’t able to get together then,” said Warshaw. “We remain committed to having a great company that embraces our communities, and the importance of our employees, associates, and clients’ interests. Because if we take care of the business, the business will take care of us.
“We don’t look at it like ‘Let’s take care of ourselves first,” the Connoisseur Media founder continued. “That’s the way we’ve conducted ourselves, and that’s how we’ll always conduct ourselves. Having the opportunity to grow is a direct result of putting those principles first.”
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Garrett Searight is Barrett Media’s News Editor, which includes writing bi-weekly industry features and a weekly column. He has previously served as Program Director and Afternoon Co-Host on 93.1 The Fan in Lima, OH, and is the radio play-by-play voice of Northern Michigan University hockey. Reach out to him at Garrett@BarrettMedia.com.
