Report: Unable To Buy, WGN-AM Seeks Alternatives

WGN 720 AM, the only radio station owned by Chicago-based Tribune Co., is still among the city's top outlets. But, according to chicagobusiness.com,  it is facing increasingly bleak prospects in a market crowded with digital rivals such as Spotify and broadcast competitors like Cumulus Media Inc., which made a deal this month to operate and eventually purchase two FM stations, doubling its reach in the local market.

WGN Radio President Jimmy de Castro, the veteran industry executive tapped by Tribune to revive the station's ratings and revenue, says he “would love to” buy an FM station with its superior signal quality and was interested in the stations sold to Atlanta-based Cumulus by Merlin Media.

Crain's Chicago Business graphic

 “The value of AM and FM stations will come down in the future, and I believe there will be more stations for sale as time goes on,” he says.

But federal laws limit his options as long as Tribune continues to own the Chicago Tribune and WGN-TV.

He's improvising by branding the new website an “FM” outlet and says he's trying to create the Pandora of talk radio, assembling talent from across the country and posting podcasts so people can listen when it's convenient.

Tribune's owners, which include Los Angeles private-equity firm Oaktree Capital Management LP, have latched on to the consolidation trend in the TV broadcast business, paying $2.73 billion last year to buy Local TV Holdings LLC. But they are aiming to spin off or sell Tribune's newspaper division, where circulation and advertising income are sinking.

That could give Mr. de Castro legal leeway to add Chicago radio outlets.

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