LOS ANGELES -- In a record-setting deal, KFAC -- Los Angeles' only commercial classical music radio station -- has been sold for $63.7 million, station owners said Wednesday.
The price is the highest ever paid for a classical-music outlet, according to executives of Classic Communications Co., the station's owner.
The sale of KFAC includes a $55 million deal with Evergreen Media Corp. of Chicago for the station's FM operations and an $8.7 million pact with Lotus Communications Crop. of Los Angeles for the station's AM side.
Previously, the biggest deal for a classic music station was last year's sale of WGMS-AM/FM in Rockville, Md., for $34 million.
The KFAC deal is further proof that the Los Angeles radio market is the hottest in the nation, industry analysts said. It also provides Evergreen an expensive entry into the richest radio market in the country. Yearly advertising revenues are as high as $350 million.
'($63 million) is the highest I've heard for that type of station,' said Andrew Marcus, radio industry analyst for Kidder, Peabody & Co. in New York. 'It seems a little too high, actually, but its understandable for the Los Angeles market.'
Evergreen, which owns five other U.S. radio stations, surprised Classic Communication's president, Louise Heifetz, with its unpecedented offer.
'We had no intention of selling the station. KFAC was profitable when we bought it and is profitable now,' Heifetz said. 'But the offer was so large it deserved consideration.'
Evergreen owns and operates radio stations in Chicago, Dallas, Tex., and Jacksonville and Miami, Fla. The company has also signed a contract to buy WAXY-FM in Ft. Lauderdale, Fla., from RKO General Corp.
KFAC has no commercial competition in the area, and does not even subscribe to the local Arbitron rating service, Heifetz said.
KFAC's isolation will probably end, Marcus said, as Evergreen will likely change the station's format to reach a 'broader audience base' with its 43,000 watts of power.
The sale of KFAC is another in a series of recent deals for Los Angeles radio stations that have topped the $50 million mark. In the last two years, four top-rated stations sold for more than $75 million each -- with the $90 million deal for KROQ-FM topping the list. Last fall, KIQS-FM, the city's third-rated, soft-rock station, was purchased by the Westwood One radio network for $56 million.
Heifatz, who formed Classic Communications in 1985 to buy 41-year-old KFAC for $33 million, will dissolve the company and form another group that will try to buy another area station.
