Emmis Sells L.A.’s Power 106 For $82.75 Million

Emmis Communications is selling its only Los Angeles radio station, “Power 106” KPWR. An affiliate of the Meruelo Group will pay $82.75 million for the rhythmic CHR, which has been under Emmis ownership for 32 years.

Meruelo operates media properties solely in Southern California, including L.A, market classic hip-hop and R&B KDAY (93.5), a 4,000-watt class A licensed to Redondo Beach. It also owns rhythmic CHR “Wild 93.5” KDEY in the nearby market of Riverside-San Bernardino, along with Los Angeles TV station KWHY-22. The group, which says it is the largest minority owned media group in California, will begin operating KPWR under a Local Marketing Agreement after the Hart-Scott-Rodino waiting period expires. The sale is expected to close in the second half of 2017.

Meruelo says it will use some of the proceeds it received from participating in the TV spectrum auction earlier this year to buy KPWR, which was one of the first outlets to program 24/7 hip-hop in the country. Closing is contingent on Meruelo collecting it incentive auction proceeds and FCC approval.

Emmis has struggled as a standalone operator in the highly consolidated market of L.A., especially during the past three years after it faced a new direct competitor from iHeartMedia urban “Real 92.3” KRLL, which launched in Feb. 2015. At the same time, Emmis has been selling non-core assets to reduce debt, including all of its magazines except for it hometown Indianapolis Monthly, along with its Terre Haute, IN radio cluster.

“Power 106 has been part of the Emmis family for more than 32 years, so this day is bittersweet, but I am confident that the station and our team are in good hands,” Emmis chairman and CEO Jeff Smulyan said in a news release. “The Meruelo Group will be great owners of this historic brand, and take it to even greater heights.”

The sale of KPWR marks the end of the Emmis ownership of sister rhythmic CHRs on the West and East Coasts. KPWR and sister “Hot 97” WQHT New York have ben bi-coastal hip-hop bookends for the company since the late ‘80s. Emmis purchased the former AC KMGG from Century Broadcasting in May 1984 and flipped it to “Power 106” in Jan. 1986. In addition to “Hot 97,” Emmis also owns urban AC powerhouse WBLS (107.5) and gospel WLIB (1190) in New York, along with sports “ESPN NY 98.7” WEPN-FM, which it leases to ESPN.

Alex Meruelo, chairman and CEO, called the purchase “a game changer” for the Meruelo group. “As a fan and someone who has had a business relationship with this station for more than 30 years, I understand the importance of Power 106 to this community,” he said. “We are committed to bringing the resources, talent and passion necessary to make this legendary brand the #1 radio station in Los Angeles.”