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Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Good morning and welcome to Entercom's special conference call. All participants will be in able to listen only until the question and answer session of the call. This conference is being recorded. I would like introduce your first speaker for today's call, Mr. Steve Fisher, Executive Vice President and CFO. Sir, you may begin.
STEVE FISHER, CFO, ENTERCOM COMMUNICATIONS: Thank you, operator, and thank you everybody for joining us on what is a beautiful Monday morning here in Philadelphia and we're excited to talk to you about the matters we'll be discussing in just a moment. But first, let me say that the matters we'll be discussing here today contain certain forward-looking statements that are based on current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Additional information and key risks are described in the Company's filings on Form 8-K, 10-Q and 10-K filed with the U.S. Securities and Exchange Commission. Listeners should note that these statements may be impacted by several factors, including changes in the economic and regulatory climate and the business of radio broadcasting in general. Accordingly, the Company's actual performance and results may differ materially from those stated or implied herein. Entercom assumes no obligation to publicly update or revise any forward-looking statements.
With that, I turn you over to David Field, President, Chief Executive Officer.
DAVID FIELD, CEO, ENTERCOM COMMUNICATIONS: Thanks, Steve. The purpose of today's call of course is to provide information on the acquisitions which we announced earlier this morning. Steve and I are going to share some thoughts on the deals and then open the floor for any questions you might have.
Now from the beginning as it pertains to the CBS deal, we were only interested in these four markets that announced today -- Austin, Cincinnati, Rochester and Memphis -- and are very pleased to have achieved our objectives and have acquired exactly what we wanted from the CBS spinouts. Let me talk briefly about each of the markets, why we found them attractive, and then step back and talk more broadly about the strategic implications on our company and our direction.
The Rochester and Memphis deals are kind of obvious. Those are both in-market deals for us with very attractive synergies. Frankly, when you look at Memphis, the Entercom and CBS positions have always been essentially two halves of an extremely logical combination. If you look at that market, you will see Clear Channel has a very dominant position with the African-American marketplace, Citadel has a strong position with country and rock audiences and Entercom and CBS have each had weak market positions and essentially split the adult contemporary audience. Combined, we'll have terrific synergies and for the first time, we'll be able to compete effectively with Clear Channel and Citadel within a radio context, and even more importantly, with other media.
In Rochester, we've performed very well over the past few years and have grown share and margin steadily. We will not be able to keep all of the CBS stations of course. We will be able to keep two of them. We do believe there are traffic synergies and development opportunities with the former CBS stations combined with our existing properties. And I wanted one of the points we will note there is that the margins on those stations are particularly low.
In Austin, everybody knows it's a great growth market. It's a top 40 market, it has a limited number of signals so it's a strong competitive environment. They have a very strong foundation with some great brands, but significant upside there, particularly with a [stake] that's losing money in the market.
And, finally, Cincinnati, a chance to get into a good top 25 market, like Austin, but even more so. Very limited number of signals creates a great competitive structure. Some traffic brands, and again, like Austin, some good solid growth opportunities.
Stepping back, why did this deal make sense for Entercom? As I mentioned earlier, we were focused on these four markets from the beginning and believe we can create significant shareholder value if we could buy them right. We were disciplined throughout the process, very focused on value and I will point out that we were fully prepared to lose this deal if we couldn't make it work at a price point which created real value for our shareholders.
The metrics nominally are that we paid in excess of 13 times EBITDA for the stations. However, the multiple may be a bit misleading for the following reasons. Memphis is a breakeven operation, Rochester margins are very low as I mentioned earlier, and based on some planned divestitures and some in-market synergies which we can exploit, this …