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Great Empire sale benefits employees through ESOP

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by Karen E. Culp

SBJ Staff

Turn your radio on in Springfield and you'll hear the same tune, but with a different beat: the merger and consolidation in the radio market continues with the recently announced sale of Great Empire Broadcasting to Journal Communications.

The sale of Great Empire is set to be finalized around the first of December, said Curt Brown, general manager of KTTS-FM and AM and KLTQ-FM, Great Empire's Springfield properties.

The purchase price for Great Empire is $95.9 million. Journal Communications is based in Milwaukee, Wis., and owns the Milwaukee Journal-Sentinel and about 150 shoppers in the Wisconsin and Minnesota area, Brown said.

The communications company also owns three television stations and radio stations in Milwaukee, Omaha, Neb., Boise, Idaho, Tucson, Ariz., and Knoxville, Tenn.

The stations feature a variety of formats and one station, a news-talk station in Milwaukee, employs former KTTS news director Dan Shelly as its news director, Brown said.

Great Empire owns 14 radio stations in four markets.

The sale will mean something more than new management to employees at Great Empire who participate in the company's employee stock ownership program.

The ESOP at Great Empire owns 43 percent of the entire company, and the investment was all contributed by Great Empire, meaning the employees have put no money into their shares.

"All the employees here will see some pretty significant return on the sale, if they have participated in the ESOP plan," Brown said.

Journal Broadcasting is 90 percent owned by its employees, Brown said, and that, along with the fact that it is owned by "real radio people," makes it an attractive new owner to the Springfield employees.

"The people who run this company are in the radio business; they're not lawyers or bean counters. There's nothing worse than having to report to people who are not radio people," Brown said.

Journal Broadcasting will offer its new employees a "good deal" on buying stock in the company, though Brown said he does not yet know what the program will entail. The company is not publicly traded.

"Another advantage of being mostly employee-owned is that there is a level of stability. People who are buying into the company are buying in because they want the company to keep and retain its focus," Brown said.

This purchase will mark Journal's first significant move into Missouri, and Brown said he does not foresee any major changes to KTTS FM. KTTS FM is Springfield's oldest FM station and one of the oldest in the state, Brown said.

KTTS AM started in 1941 and the FM in 1949.

Both stations were sold to Great Empire in 1972. Prior to that, the Cooper family owned the stations. Two years ago, Great Empire purchased KLTQ, Max 96.5, an FM station designed to reach young listeners with its young country music format.

KTTS AM plays classic country and the FM is a blend of classic and contemporary country, along with a heavy emphasis on local news, with news reports every hour and half hour, Brown said.

The news focus at KTTS is what makes it unique in the Springfield market, he added.

The sale of Great Empire was the decision of the company's two major stockholders, Mike Lynch, who is president, and Mike Oatman, who is chief executive officer.

Each man was diagnosed with cancer recently, and their health concerns prompted them to look at selling the company.

Brown said there was quite a bit of interest in Great Empire from other communications companies.

The sale is further evidence of what changes the Telecommunications Act of 1996 is making in radio, Brown said. Prior to the act's passage, Great Empire could not purchase more property in Springfield because it held as much of the listenership as was allowed under Federal Communications Commission guidelines.

After the telecommunications act passed, one company could own up to four FM stations and two AMs. Brown said he was not certain whether the Journal group would look to purchase any more stations in Springfield. He did say that, prior to the purchase, Great Empire was looking at expanding in the market and was having "serious discussions with a couple of people," but declined to offer specifics.

The Great Empire properties in Springfield employ 60 people.

The three stations will continue in their present formats for now, and Brown said he cannot foresee any changes for KTTS FM.

"I don't know why they would change anything about KTTS FM. It has been repeatedly listed as the No. 1 station in the area since 1973, and we're making money with it," Brown said.

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