Nassau Broadcasting hits the skids

Nassau Broadcasting Partners of Princeton, New Jersey, which operates 51 radio stations between Maryland and Maine, among them 10 in New Hampshire, including four in the Lakes Region, has apparently fallen victim to the recession.

In April Chief Executive Officer Louis Mercatanti announced that the company had reached a restructuring agreement with its senior lenders, chiefly the Goldman Sachs investment bank and several venture capital firms, by which it will swap most of its debt for equity. The debt holders will acquire an 85-percent stake in the enterprise. Nassau Broadcasting will continue to operate the stations, with senior management receiving 5-percent of the remaining equity as an incentive while holders of the firm's preferred stock get a 10-percent equity interest. The agreement includes provisions for distributing the proceeds should some or all of the stations be sold as well as and for possible initial public stock in the future. Last month the agreement was filed with the Federal Communications Commission (FCC), which must approve it.

The change of ownership will require the company to divest three stations, including two in New Hampshire — WWHQ-FM (101.5), the Hawk (classic rock), and WNNH -FM (99.1), Concord Oldies — which it acquired before the FCC changed its rules limiting the number of stations an owner could hold in a single local market. Both stations will be placed in a divestiture trust managed by Mark O. Hubbard, a consultant with 25 years of experience in broadcasting, including a stint with Clear Channel Communications, when that radio giant grew most rapidly.

The company took the occasion to move Pat Kelly, host of the morning show aired on WNNH-FM (99.1) Concord Oldies and WLKZ-FM (104.9) Wolfeboro Oldies, to its local flagship station WLNH-FM (98.3) where he has replaced Dominic Biello. For two decades Kelly has been among the most popular and familiar voices and faces in the Lakes Region while listeners to WLNH will recall Biello as Chris Michaels before shifting to mornings and back to Dom Biello. In a prepared statement on WLNH's website, Rob Fulmer, regional manager of Nassau Broadcasting, said that "given the economic realities we all face, these changes were necessary to continue growing and serving the community."

All of Nassau's stations in the Lakes Region broadcast from studios in Gilford.

Nassau Broadcasting began with WHWH 1350 in Princeton in 1963, launched an FM station in 1975 and operated as a two station radio group until 1996, when the FCC raised the number of stations any one company could own in a particular market. In 1996, Mercatanti, who acquired the company from its founder in 1986, made the first of a series of acquisitions that by 2000 had expanded the company's stable to more than a dozen stations in New Jersey, Pennsylvania and New York.

That year Nassau set its sights on Aurora Broadcasting, which owned stations in southern New York and western Connecticut, and planned to raise the capital for the acquisition by taking the company public. But, when the Dow Jones Industrial Average plummeted 30-percent, the public offering and Aurora acquisition were abandoned.

During the next four years through a series of transactions with Clear Channel and Millenium Radio Group, Nassau Broadcasting shrank to eight stations in New Jersey and Pennsylvania. Then in 2004 Tristram Collins, a former investment banker at Citigroup, joined the company, which promptly began to grow once more. That year Nassau Broadcasting acquired stations in New Hampshire, Maine and Vermont to quickly become one of the largest broadcasters in New England with 10 stations in New Hampshire, 11 in Maine, 12 in Vermont and 7 in Massachusetts. In addition to WLNH-FM, WWHQ-FM and WNNH-FM, Nassau Broadcasting operates WLKZ_FM (104.9), WJYY-FM (105.5), WNHW-FM (93.3) and WEMJ-AM 1490 in the Lakes Region and central New Hampshire as well as WFNQ-FM (106.3) in Manchester and WHDQ-FM 9106.1) and WTSV-AM 1230 in Claremont.

Several familiar with the industry, who asked not to be named, said that Nassau Broadcasting paid premium prices for its acquisitions with venture capital, just about the most expensive money in the market, and found itself unable to support its debt when its business plans failed and advertising revenues slumped.

"We acquired quire a few stations in the last few years," Mercatanti told the "The Times" of Trenton, "and if there was a wrong time to do it, that was it."