Joyner strikes deal with Radio One: Radio One purchases Reach Media in $56 million deal.

The balance of power in radio and television is shifting from the distributor to the talent, as is evident from recent syndication moves by top radio personalities. The most lucrative of deals is the one Tom Joyner struck with Radio One in November for $56 million.

Trying to compete with satellite radio and the Internet, Radio One (No. 8 on the BE INDUSTRIAL/SERVICE 100 list with $344.7 million in sales) is acquiring 51% of Reach Media, the 2-year-old parent company of the Tom Joyner Morning Show and BlackAmericaWeb.com. This deal means that Radio One becomes part owner of Reach Media, which is projected to earn $12.5 million for 2005. Joyner, who was the majority owner of Reach, will receive half of his share of the purchase price in Radio One stock.

"That's a reasonably typical price to pay," says Kit Spring, an analyst at Stifel Nicolaus who covers Radio One. "Oprah [Winfrey] makes $200 million per year, and who knows how much it would be worth if she was to sell it," explains Spring, adding that Howard Stern was just paid $100 million per year for five years to join Sirius Satellite Radio.

"Historically, distribution was the name of the game," says Scott Royster, CFO of Radio One. "But now content is more valuable than it has ever been."

The Tom Joyner Morning Show has 8 million listeners on more than 115 stations, 17 of which are owned by Radio One. In some markets, Joyner airs on a competing station. But Royster says Radio One doesn't plan to pull Joyner off every competitor station. "If it's in the best interest for Tom to be at a competitor station, then that's fine," explains Royster. For now, Radio One has a bigger strategy: to syndicate more of its on-air personalities, such as Steve Harvey, who hosts the morning drive for a Radio One station in Los Angeles.

Radio One does not have a presence in New York City, and the Tom Joyner Morning Show was recently cancelled from the morning drive at Emmis Communications' WRKS-Kiss FM in New York. "[Tom Joyner] losing New York was not an indicator that he was losing market share, and we are hopeful we can get him back in New York," says Royster. According to Ken Smikle, publisher of Target Market News, which covers trends in media and advertising, "Radio One may be able to do it because they would probably put Tom Joyner in New York for less than he would put himself in New York."

Picking up where Joyner left off and doing well in New York is Michael Baisden, relationship book author turned radio host. Baisden has been the afternoon drive host at WRKS for two years and has now signed a five-year syndication deal with Joyner's former partner ABC Radio Networks. Baisden is the author of The Maintenance Man and Men Cry in the Dark, both of which were adapted into stage plays.

One to watch for a syndication deal is Tavis Smiley, according to Smilde. "I'm sure Tavis will go into syndicated talk radio himself.... He may even go to Radio One." The Tavis Smiley Show on NPR ended in mid-December because Smiley decided not to renew his contract. He has signed on for a second season of Tavis Smiley, his late-night television show on PBS.