WASHINGTON -- Westwood One Inc., announcing an agreement to buy NBC Radio Networks for $50 million, said on-air programming will sound the same after the sale but that NBC's radio news will reach a wider audience.
Norman Pattiz, chairman of Westwood One, said the sale of NBC Radio Network, The Source, Talknet and the long-form program production unit NBC Radio Entertainment could become final within 30 days.
Westwood and NBC signed a letter of intent Monday and will review each other's operations before signing a final contract. The agreement then faces approval from the NBC and Westwood boards, the Justice Department and the Securities and Exchange Commission.
Under the plan, Westwood will pay $50 million in cash and issue NBC Inc. five-year warrants to purchase 1 million shares of Westwood common stock for $36.40 a share.
After the announcement, Westwood One stock jumped $3.37 to $30, where it closed. General Electric, NBC's parent firm, dropped 50 cents to $55.25.
NBC Inc. several weeks ago revealed it had entered formal negotiations to sell its radio networks. There has been widespread speculation for months, however, that the Los Angeles distributor of national radio programming, which in 1985 bought the Mutual Broadcasting System, was a major contender.
After the sale goes through, NBC Radio 'will sound an awful lot like it does right now,' Pattiz said in a telephone interview. 'Our intention is to keep the on-air sound and quality of the product.'
He said Westwood has no plan to combine the news operations of Mutual and NBC and an NBC spokeswoman said the company has no plans to move NBC Radio from its New York City headquarters.
'This transaction will create a strategic network radio alliance which will combine our individual strengths,' Randall Bongarten, president of NBC Radio, said in a statement. 'We believe this will allow us to broaden the exposure of our news product in the radio marketplace.'
Pattiz said the agreement 'allows us to provide the quality and tradition of NBC News to radio stations and advertisers. The NBC Radio Networks will maintain their identities in much the same way as the Mutual Broadcasting System.'
The NBC radio networks are carried on about 700 stations nationwide, while Westwood One's Radio Network produces and distributes 30 shows regularly heard on 3,800 stations nationwide. Along with Mutual, Westwood One does business with about 5,000 radio stations nationwide.