Newcap Radio COO Ian Lurie is audibly enthused in conversation whenhe is talking about the chain’s acquisition by Stingray Digital Group, and he’s a guy who has seen his share of radio acquisitions in the past decade.
He can only speculate on what Stingray CEO and president Eric Boyko’s vision is for the combined assets in the $508M share and cash purchase that is expected to have regulatory approval by year-end, but he figures it’s a win-win situation for both companies.
It’s also an unusual deal in that Stingray is a pure digital company that is acquiring an analogue business, but Lurie again sees the move as a stroke of genius that only has a positive upside for Newcap, its employees and Boyko’s business interests.
As CFO at both Standard Broadcasting, Astral Media and then Sr. VP of Bell Media’s English Radio Operations, Lurie has seen his share of dark clouds and rationalization, but it’s all different here, he assures.
“Yes, both companies reside in the music space, but Stingray’s revenue streams are largely driven by subscriber income. I think this is what is appealing to them in buying a radio chain.
"Radio has remained quite resilient despite some of the challenges that digital has brought," he continues. "It remains stable and generates strong cash flow. With Newcap being a publicly-traded company, Eric (Boyko) was able to see the results, the cash flows it generates and the kinds of margins it realizes. I think he was pretty impressed by that and sees an opportunity to cross-promote the companies."
There’s also the fact that Newcap generates all of its income through advertising, and this expertise in selling adds a component to Stingray’s business model that was likely a compelling factor in sealing the deal.
Newcap president and CEO Rob Steele has been on Stingray’s board for some time, so the two men had become friends over the years. As Lurie explains it, Steele wasn’t actively seeking a buyer for the chain, but Boyko put together a deal with the financing in place before making his pitch. As it turned out, his timing was spot on as Steele had become more involved in other businesses he owns that include a hotel chain and car dealerships (through the Steele Auto Group).
As for the impact on Newcap’s on-air teams, Lurie is emphatic about the acquisition opening up new opportunities.
“Our on-air staff are totally excited,” he says. “This is a totally complementary acquisition. This (deal) is not like Bell Media buying Astral. Stingray is purchasing an operation totally intact, and all the employees remain in place.
“I think the announcers, especially those with a high profile, see that some of their content can be used on more platforms than they currently are. Talking to my teams across Canada there are none that are on pins and needles. None! Maybe on the corporate side where there’s some duplication in functionality (there could be some rationalization), but at the station level, no one is concerned. Everyone is upbeat about it.”
Stingray to acquire Newcap Radio ownership - FYI Music News