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Technology Stocks : Entercom Communications Corp. (ETM) -- Ignore unavailable to you. Want to Upgrade?

To: David B. Higgs who wrote (9)	1/31/1999 11:05:00 AM
From: David B. Higgs	Respond to of 10

Chancellor Media is meeting with Wall Street analysts Tuesday or Wednesday to discuss "its availability to be purchased." It's way too big for ETM to have any interest, but this meeting and more possible consolidation in the radio industry may have a positive impact on ETM's share price next week. Here's an article on Chancellor that has some comments on the prospects for the industry. Stock of the Day Jan 28, 1999 AMFM: Radio Titan Cranks Up The Volume Last week Chancellor Media (Nasdaq:AMFM - news) declared itself "the Rodney Dangerfield of the radio business," claiming it gets no respect from Wall Street and that investors were failing to appreciate the true value of its media empire. Chancellor said it was exploring the possible sale of the company or some of its operating units. Nothing like a little squawking to add $1.5 billion in market capitalization. Since the announcement, Chancellor's share price has jumped from $45 to $56 as of Wednesday's close. The empire which Chancellor feels is so underappreciated was built with a number of big acquisitions last year worth nearly $4 billion. Its pending merger with Capstar will make Chancellor the largest operator of radio stations, 465 in all with a presence in over 100 major markets. Chancellor's buyout of Whiteco Outdoor Advertising gave it 36,000 billboards, creating the fifth-largest operator in outdoor advertising. Finally, the purchase of Lin TV also makes Chancellor a small player in TV with 12 stations and a reach of about 5% of US households. The radio group accounts for nearly three-fourths of cash flow, and analysts feel this media segment is looking good these days. The strong US economy and industry consolidation have improved pricing trends in radio advertising, and some industry experts believe radio has less downside risk compared to other media if and when the economy does soften. Chancellor's size and geographic diversity give it critical mass that appeals to national advertisers, not to mention economies of scale in its operations. The company has racked up some pretty serious debt in putting together this media empire, but analysts are generally confident that the company has sufficient and rapidly growing cash flow to handle the leverage and reduce it over time. Eight out of twelve analysts have a Strong Buy on Chancellor Media, and three of the remaining four give it a Buy rating. Clearly the brokerage side of Wall Street gives Chancellor Media plenty of respect, but investors have to realize the so-called sell side has a vested interest in being on good terms with management. An acquisition-hungry, debt-tolerant company like Chancellor Media can be worth millions in investment banking fees. Now Chancellor has hired BT Alex. Brown to explore strategic alternatives such as the sale of all or part of the company. But with the stock price up 25% since that announcement last week and so much money and effort put into building the empire in the first place, one must wonder if management is really looking to tear it all apart now.