Stingray Digital to purchase all 101 NewCap stations

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Stingray Digital to purchase all 101 NewCap stations

Postby yycroof » Wed May 02, 2018 2:20 pm

Stingray Digital pushes into radio with $506-million purchase of Newfoundland Capital

Montreal media company Stingray Digital Group Inc. is pushing into radio with the purchase of Newfoundland Capital Corporation Ltd., Canada’s second biggest private radio broadcaster.

Stingray, best known in Canada for its commercial-free streaming service Stingray Music, will pay $506-million for NCC including the assumption of $112-million of debt, the company said in a news release late Wednesday. It said it expects the deal to be at least 30 per cent accretive to its net income per share within the first full year of closing.

Stingray has been an active industry consolidator since it went public in 2015, making six acquisitions in the past year alone. This latest deal would make the firm Canada’s biggest public independent media company, it said.

Dartmouth, N.S.-based NCC has 101 radio licenses stretching across Canada, including 82 FM and 19 AM stations. Boards of both companies are backing the transaction, which requires the approval of NCC shareholders.
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Re: Stingray Digital to purchase all 101 NewCap stations

Postby pave » Wed May 02, 2018 4:43 pm

At least, everyone's jobs will be safe.
Bwah-ha-ha-ha-ha-ha-ha-ha!
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Re: Stingray Digital to purchase all 101 NewCap stations

Postby Jack Bennest » Wed May 02, 2018 4:59 pm

I saw this on Castanet first and then checked in here.

I must be old - in the good old days a radio station, a chain, a group would not be sold like peaches at a fruit market.

Glad I am in a different place at a different time.

No personalities... no news, no music you can't find on a disc in the car, no fun.

Dead :violent1:
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Re: Stingray Digital to purchase all 101 NewCap stations

Postby jon » Thu May 03, 2018 8:31 am

What I didn't know, until I read the Broadcast Dialogue story this morning, is that Stingray already owns TV Specialty Channels:
Stingray Digital Group has announced its intention to acquire Newcap Radio owner Newfoundland Capital Corporation for $506 million, including the assumption of net debt of approximately $112 million. Subject to regulatory and shareholder approval, Montreal-based Stingray will pay $14.75 per share, payable in a combination of cash and Stingray shares. Headquartered in Dartmouth, NS, Newfoundland Capital is the second-largest radio licence holder in the country, employing about 800 radio professionals. Newcap’s 82 FM and 19 AM radio licences would mark a major addition to Stingray’s lineup of specialty television channels and multiplatform music and video services. Going forward, the Steele family would hold five per cent of the merged company with Newcap president & CEO Rob Steele remaining on the Stingray board.
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Re: Stingray Digital to purchase all 101 NewCap stations

Postby drmusic » Thu May 03, 2018 12:16 pm

I think they started out with the Karaoke Channel, before they bought the cable music services previously owned by CBC and Corus.

Anyone else think it's odd that all the stories and releases omit NewCap's Lloydminster TV operation (CKSA/CITL)?
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Re: Stingray Digital to purchase all 101 NewCap stations

Postby dmehus » Thu May 03, 2018 12:53 pm

jon wrote:What I didn't know, until I read the Broadcast Dialogue story this morning, is that Stingray already owns TV Specialty Channels:
Stingray Digital Group has announced its intention to acquire Newcap Radio owner Newfoundland Capital Corporation for $506 million, including the assumption of net debt of approximately $112 million. Subject to regulatory and shareholder approval, Montreal-based Stingray will pay $14.75 per share, payable in a combination of cash and Stingray shares. Headquartered in Dartmouth, NS, Newfoundland Capital is the second-largest radio licence holder in the country, employing about 800 radio professionals. Newcap’s 82 FM and 19 AM radio licences would mark a major addition to Stingray’s lineup of specialty television channels and multiplatform music and video services. Going forward, the Steele family would hold five per cent of the merged company with Newcap president & CEO Rob Steele remaining on the Stingray board.


Wow, I'm surprised you didn't know about that, jon. I believe Stingray acquired several former Much Music specialty TV channels as part of a required divestiture by Bell for their acquisition of Astral Media. As expected, I think Stingray made the better buy, compared to DHX Media's buy of Family Channel and related specialty TV channels from Corus, and I think this is a great fit.

The move surprised me because NewCap seems to be one of the best national radio station operators. Will there be job losses? I don't know, but not likely because of this deal (other than duplicative head office-type jobs). Any on-air talent and/or production job losses would've likely already been in the works by NewCap as Stingray owns no radio stations.

At first, I was wondering whether I should put in a commission-free order, at $10.40 per subscription receipt, for Stingray Digital Group or just buy it on the open market. It seems the market doesn't like this deal and I'm not sure why. Yes, they're adding 13 million common shares, but they also expect this deal to be 30% more accretive in earnings per share and the company is doubling in size. What am I missing!? This seems like the best way to finally own a pure-play, as best as can be expected, radio station group, with optionality in the music streaming service.

I'm actually even more bearish on Sirius XM in Canada now. Stingray can unite the radio stations under the Stingray brand, simplify their corporate structure, and create a national combined online streaming service featuring terrestrial radio stations and Internet music streams. Why would I pay $20+ plus taxes per month, per radio receiver, for satellite radio when I can get ad-free or ad-minimalist radio for free? As cellphone companies strike deals with companies like Bell Media and Stingray to exclude Stingray or Bell radio streams from Internet data consumption, satellite radio becomes wholly irrelevant. :(

Cheers,
Doug
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Re: Stingray Digital to purchase all 101 NewCap stations

Postby pave » Thu May 03, 2018 5:34 pm

I am urging Doug to curb his enthusiasm for the shorter term.
No organisation has come on in the past number of decades that has demonstrated any acumen whatsoever in running and programming radio stations.
These guys are no different.
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Re: Stingray Digital to purchase all 101 NewCap stations

Postby paterson » Thu May 03, 2018 6:52 pm

I agree with Doug. I have an open mind about Stingray Music. Some of their music streaming channels are actually better than XM Sirius in my opinion, and at least for music oriented radio stations in the deal, this bodes well. A little jaded to say that no organization has come in the past decades that has demonstrated any acumen in running and programming radio stations. Jim Pattison Radio Group does a good job, I am hoping that they eventually acquire some stations in Ontario and shake things ups.
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Re: Stingray Digital to purchase all 101 NewCap stations

Postby Marty Forbes » Thu May 03, 2018 7:38 pm

I’m with Doug. The digital age is here...look at the distribution now....huge....it’s an app World now...hopefully Pandora continuous to resist launching in Canada due to our onerous rights payments....but this is a huge step forward to digital driving the bus....Eric Boyco built this company from the ground up; he’s very connected with top thinkers in the media biz; and multi format product to distribute.
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