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Transaction Expected to be Immediately Additive to Operating Results Beasley Broadcast Group Secures Option to Purchase Managed Stations for $8.5 Million
NAPLES, Fla. and LAS VEGAS, May 28, 2010 (GLOBE NEWSWIRE) -- Beasley Broadcast Group, Inc. (Nasdaq:BBGI) ("Beasley Broadcast"), a large- and mid-size market radio broadcaster, announced today that it entered into an agreement with GGB Las Vegas, LLC, whereby Beasley Broadcast Group will provide management services for KOAS-FM and KVGS-FM in Las Vegas. Beasley Broadcast Group, which currently owns three radio stations in the Las Vegas market, expects that the transaction will be immediately additive to its operating results.
GGB Las Vegas, LLC is an entity formed by George Beasley, Chairman and CEO of Beasley Broadcast Group, for the purpose of acquiring KOAS-FM and KVGS-FM from Riviera Broadcast Group, LLC for approximately $8.5 million. GGB Las Vegas' acquisition of KOAS-FM and KVGS-FM is expected to be completed in the third quarter of 2010 and is subject to FCC approval and other customary closing conditions. During the period prior to the consummation of the acquisition, GGB Las Vegas will provide services to Riviera Broadcast Group for KOAS-FM and KVGS-FM pursuant to a local marketing agreement.
Beasley Broadcast and GGB Las Vegas have entered into a management agreement whereby Beasley Broadcast will receive 40% of any advertising revenue sold by its existing Las Vegas sales teams for KOAS-FM and KVGS-FM until such time that GGB Las Vegas completes the acquisition of the stations. Once the stations are acquired by GGB Las Vegas, Beasley Broadcast will provide both stations with sales and other management services and will be entitled to the greater of 50% of the aggregate monthly station operating income generated by KOAS-FM and KVGS-FM or a total of $10,000 per month. Station operating income is defined as net revenue less operating expenses including cost of services and selling, general and administrative expenses.