Mark Mills announces that everyone at WBIX expects to be terminated by Monday

[Dan Strassberg]

As you probably already know, Chris Egan today announced that he was pulling
out of his planned purchase of WBIX and immediately severing all connection
with the station and that, on Monday, a court-appointed trustee will assume
responsibility for the station as well as for any other assets of the
station's former owner, Brad Bleidt. Mark Mills, host of the PM-drive Market
Wrap program, announced over the air this afternoon that a number of station
staff have already been terminated and that the remainder of the staff
expect to receive their walking papers when the as-yet-unnamed trustee
appears at the station's offices on Monday. Egan has announced that he will
pay the salaries and medical insurance premiums for all staff until the end
of this year--unless the trustee makes other salary-continuation
arrangements. Mills also referred to Bleidt on the air as a thief who had
for 20 years masqueraded as a financial planner.

Mills said he did not know what would become of the station or its business
news/talk format, but he seemed to suggest that there was a strong
possibility of the station going dark and almost a certainty of a format
change.

The trustee will be responsible for getting the most money possible for
Bleidt's assets--of which WBIX may be the most valuable--and conceivably is
the only one of any value. The trustee's objective will be to compensate to
the maximum possible extent the clients that Bleidt defrauded, although I've
neither seen nor heard anything that suggests that the clients will receive
much more than a small fraction of what they lost.

It is obvious from Mills' comments that WBIX has been hemorrhaging money and
that he believes the only way to stop the bleeding may be to take the
station dark. A way to significantly reduce expenditures while keeping some
semblance of the business format on the air would be simply to run the
Bloomberg network 24/7. WBIX already subscribes to the network and uses it
heavily, especially overnight.

In a Globe story today, Egan is quoted as saying that if he had tried to go
forward with his plans to purchase the station, Bleidt's defrauded clients
would likely have received less money than they will as a result of his
pullout. Egan was going to pay Bleidt $7 million for the station. That price
strikes me as quite fair. However, when Bleidt purchased WBIX from Alex
Langer last January, he had agreed to pay Langer a sum that I have seen
quoted as both $13.4 million and $13.8 million. Based on other AM sales in
this market over the past five years or so, I regard either of those two
prices as grossly excessive. Egan also said today that 100% of his proposed
$7 million payment to Bleidt plus an additional $1.5 million would have been
due to Langer, who had financed Bleidt's purchase of the station. According
to the FCC record of the transfer of control, Langer received $1 million
from Bleidt when Bleidt took control of the station. Adding up the numbers,
I reach the conclusion that between January and November, Bleidt must have
paid Langer an additional $4 million--or $400,000 per month. Supposedly,
though, the lease called for payments of only $50,000 per month. Clearly, I
don't have the whole story.

At this point, I doubt that even those closest to the situation have any
idea of what is going to happen. I suspect that WBIX will ultimately wind up
in the hands of one of the large radio companies. My personal suggestion to
the trustee is that she or he try to get representatives of ABC and Radio
One together and negotiate with them. 1060 would be a superb signal for
Radio Disney's WMKI (transmitters in the affluent MetroWest area; big
daytime signal well into New Hampshire and southern Maine) and WMKI's
current 1260 frequency would be the perfect full-time signal for WILD (best
signal in Dorchester, Mattapan, and Roxbury of any AM except for WBZ). This
might provide an opportunity to get the financial programming back into
Boston, albeit on another daytime-only signal--1090, WILD's current
frequency. That idea probably makes too much sense to ever happen.

--
Dan Strassberg, dan.strassberg@att.net
eFax 707-215-6367