Beasley Broadcast Group is adding two stations in Las Vegas with a three-year agreement to manage and an option to purchase, KOAS-FM and KVGS-FM, owned by GGB Las Vegas, a group formed by BBG Chairman and CEO George Beasley.
GGB Las Vegas is in the process of acquiring the two stations from Riviera Broadcast Group for $8.5 million. That deal is expected to be completed by third quarter.
KOAS-FM and KVGS-FM, which program Oldies and Alternative Rock, round out BBG's cluster, which includes No. 1-rated Classic Hits KKLZ-FM, Country KCYE-FM, and Top 40 KFRH-FM.
As part of the agreement, BBG, which currently owns three stations in the market, will receive 40 percent of any ad revenue from the two new stations until GGB completes the acquisition of the two stations. Once owned by GGB, BBG will provide stations with sales and other management services and be entitled to greater than 50 percent of the aggregate monthly station operating income generated by GOAS-FM and KVGS-FM or a total of $10,000 per
"This transaction allows Beasley Broadcast Group to leverage its existing Las Vegas operating and management capabilities to immediately generate new cash flow through a structure that requires no capital commitment," said George Beasley, who used his own money to form GGB Las Vegas. "On an immediate basis, the company will generate guaranteed management fee revenue while the option to purchase these stations as an attractive price presents potential further upside Beasley Broadcast Group."
In first quarter, BBG's three stations posted a 24 percent increase in revenue.