Townsquare and GAP to Merge?

July 16, 2010 by

GREENWICH, CT -- Employees were told to keep it hush-hush yesterday, but it's all over the national trades today: Townsquare Media, the owner of four Utica-Rome stations, has filed FCC paperwork which could lead to an eventual merger with Dallas-based GAP Broadcasting.

A memo emailed to all Townsquare employees late yesterday said the merger is not definite, so employees should not be answering inquiries from the press.  But as you may have expected, the word got leaked to national trades including and the Radio Business Report, who both reported the story earlier today.

Geographically, the merger is strategic for the two companies, as all of GAP's 116 stations are located in 24 markets west of the Mississippi River.  By contrast, most of Townsquare's stations are east of the Mississippi.  The only states where the companies overlap are Texas, Louisiana and Minnesota -- but not in the same markets -- so there would be no need to divest stations to satisfy FCC market ownership limits.

GAP operates in two divisions: GAP West and GAP Central.  In 2009, the company formed GAP East, to explore the possibility of acquiring stations across the Mississippi.  But so far, there are still no stations in the GAP East division.

Similarly, Townsquare had recently mentioned plans to expand into new markets.  The expansion plans were announced shortly after the company got its new name and new leadership -- following the former Regent Communications' emergence from a Chapter 11 bankruptcy filing.

One thing we learned today from reading the national trades: both GAP and Townsquare are controlled by funds managed by Oaktree Capital Management, L.P., so the two companies are already somewhat related.  With the FCC's approval, all 170+ stations would be further united under a single corporate owner, rather than multiple divisions.

No word yet on whether the deal means any money would be changing hands, or how much -- nor any word on how soon the deal could become finalized.  In the Utica-Rome market, Townsquare owns country Big Frog 104 (WFRG), AC Lite 98.7 (WLZW), Newsradio 950 WIBX and Oldiez 96 (WODZ).

Disclaimer editor Peter Naughton is a part-time every-other-weekend DJ at WLZW.  While had knowledge of the story via the memo which was issued Thursday night, we did honor the company's request to keep the matter private, until we saw the news had already been broken elsewhere.
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