Radio One “didn’t bet the farm” on a possible D.C.-area casino resort.

Story by Tom Taylor's Newsletter NOW

CEO Alfred Liggins tells his Q3 call “we think it’s a great deal” for shareholders and bondholders, with limited risk and a potential jackpot of upside.

Two main reasons they’re excited about a possible $40 million investment – Radio One studied the results from MGM’s Detroit-area casino, where that company is also an advertiser.

Liggins says “these resorts, oftentimes, are immensely profitable.” Another reason Radio One reached out to MGM – the casino would be at National Harbor in Prince George’s County, Maryland. Liggins knows his audience – PG County is 70% African American, and “it’s where the vast majority of our audience in the Washington area is.” Alfred talks about his company’s identity – “We like to say we’re in the black people business, and almost anything happening in Prince George’s County is the black people’s business.”

MGM is one of three rivals planning to bid for a new Maryland casino license, competing with Penn National Gaming and the owners of the Philly-area Parx casino.

Radio One would first make a $5 million investment, then the other $35 million would be due before the casino actually opens. (Though Radio One isn’t obligated to go beyond the first $5 mil.)

Radio One would share in the casino revenues, and there’s also a marketing agreement across its digital and radio platforms. Liggins will know by year-end whether MGM wins the license.

He says investing in the $925 million project has “a good chance of a significant double-digit return.” But will investors be confused about a pure-play media company with radio, cable and digital entering the gaming sector?