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SBJ/19980629/This Weeks Issue
Ackerley aims to add more sports holdings to billboard-broadcast mix
Published June 29, 1998, Page 26
But that doesn’t mean the Seattle-based company, which owns four radio stations, nine television stations and thousands of billboards across the United States, will not buy another sports team if the right opportunity arises, said Denis Curley, co-president and chief financial officer of Ackerley.
Late last year, Curley said, “We found out it [the baseball team] was for sale, and we made contact with the owner and the person who was trying to put the deal together.” Ackerley was never in negotiations to buy the team but was in the discovery stage, he said.
“The transaction was not a good business deal for us,” Curley said. “But that didn’t taint us from looking at other [sports] franchises. It is a business that we are comfortable with.”
The Ackerley Group is an unusual animal. The company started in the billboard business, then branched out to buy radio stations, television stations and an NBA team.
It’s like a mini-Disney or a small News Corp. in Seattle, said Robert Toomey, analyst at Piper Jaffray, who has followed the company.
Ackerley Group “is not on a scale of a Fox or a Time Warner or a Disney,” Toomey said, “but they are trying to implement that same strategy,” using sports properties to create synergies for the other parts of the business, in particular the broadcast business.
Although the Sonics do generate positive cash flow, the main value of the team is the synergies with the other businesses, Toomey said. “It gives them a format to attract a lot of advertising, for the radio stations in particular,” he said.
The Ackerley Group also owned the SeaDogs of the Continental Indoor Soccer League, but that team is out of business because the league folded, Curley said. The company originally was interested in looking at alternative leagues, but those discussions haven’t panned out, a spokeswoman for Ackerley said.
Toomey said it is possible that Ackerley will buy more sports franchises, as well as radio and television stations, but unlikely that the company will pay big, big prices.
“They are moderately acquisitive where it makes sense,” he said. “I wouldn’t say they are bottom-fishers, but they have an eye for value.”
Ackerley’s acquisition strategy in recent years has been to buy television and radio stations in medium-size cities, where prices are lower than in major markets, he said.
“They will go in and buy an underperforming station, usually in a secondary market, like they have done in Bakersfield, Calif., and upstate New York, and change the management and turn it around,” Toomey said.
Although the Sonics are the most public part of the Ackerley group, “where they make the most money is the outdoor advertising and the TV and radio,” Toomey said.
Curley indicated that Ackerley is more interested in buying broadcast and outdoor billboard businesses than sports teams right now, although the company would look at opportunities in all lines of business.
Ackerley Group was founded in 1975 by Barry Ackerley, an entrepreneur who decided to go into the outdoor advertising business by buying a small billboard company in western Washington. After adding to his billboard businesses in the late 1970s, Ackerley began buying radio stations in 1979 and television stations in 1983, Curley said.