A Bargain Buy For Cutchall In Valley Of The Sun

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Regulatory filings made late Wednesday with the FCC have uncovered new details regarding the sale of a group of radio stations in the Phoenix market to an entity led by Mike Cutchall.


The biggest jaw-dropper? The valuation placed on the sale of three FM brands from Jeff Trumper‘s company.

 

 

As RBR+TVBR first reported on Friday (8/2), Desert Valley Media Group agreed to sell the following stations to Zelus Media, in a deal brokered by Kalil & Co.:

  • Class C Oldies KOAI-FM 95.1 in Sun City West and K235CB at 94.9 MHz in Chandler, branded as “The Wow Factor”
  • Class C Rhythmic Hot Adult Contemporary KMVA-FM 97.5 in Dewey-Humboldt and Class C1 KZON-FM 103.9 in Gilbert, marketed as “Hot”
  • Class C Hip-Hop KKFR-FM 98.3 in Mayer and K241BQ at 96.1 from Fort McDowell, known as “Power 98.3.” The FM translator has a transmitter atop South Mountain and serves the San Tan Valley

It is now known that Houston-headquartered Zelus Media, a division of Zelus Esports LLC, is paying $3.25 million for the stations.

That’s a bargain, given the footprint for the three brands in a market where Audacy Inc., iHeartMedia and Hubbard Radio are key competitors.

A $162,500 escrow payment is being held by Kalil & Co. on behalf of Desert Valley.

How will the remaining $1,837,500 be paid to Trumper by Zelus, a partnership that sees Cutchall hold 45% equity interest, COO Brian Dubiski also a 45% interest holder, and Chief Revenue Officer Art Morales holding the remaining 10% ownership of Zelus?

A $1.25 million Promissory Note has been executed, payable in installments to be made over three years and holding a 5% interest rate.

A LMA agreement putting the stations under Zelus control begins September 1.

Cutchall’s legal counsel in this transaction is Dawn Sciarrino of Sciarrino & Shubert in Brentwood, Tenn.

Trumper’s legal counsel is Sally Buckman of Lerman Senter PLLC.


“The WOW Factor” is known for its Oldies format created by longtime radio programming consultant John Sebastian. Mesa, Ariz.-based consultancy Radiocrunch is also involved with the station group and will continue to work closely with new ownership.