Leighton Media To Become 100% Employee-Owned.

Leighton Media is headed toward 100% employee ownership under a $7.84 million stock deal that will put control of the longtime radio operator entirely in the hands of its Employee Stock Ownership Plan (ESOP).

The ownership change is outlined in an application filed with the Federal Communications Commission. The filing shows five existing shareholders in the St. Cloud, MN-based company have agreed to sell their interests back to the company, clearing the way for the ESOP to become its sole shareholder. In practical terms, it means employees will collectively own the company through the retirement plan rather than control passing to another broadcaster or outside investor.

The ESOP is already Leighton’s largest shareholder, owning 47.1% of the company. The Robert G. Leighton Revocable Trust owns 25.48%, Jeffrey T. Leighton holds 25.36%, Patrick Dotzler owns 1.38%, Tony Abfalter has 0.46% and Brian Zenzen owns 0.22%. Together, the five shareholders are redeeming 29,594.64 shares, representing the entire 52.9% of the company not already held by the ESOP.

The agreement values those shares at $265 each, putting the total redemption price at $7,842,580. The Robert G. Leighton Revocable Trust will receive $3.78 million for its shares, while Jeffrey Leighton will receive $3.76 million. Dotzler will receive $204,050, Abfalter $68,900 and Zenzen $33,125.

Sellers Finance Deal

Most of that $7.84 million will not change hands immediately. The ESOP will pay $1.31 million in cash at closing, while $6.54 million — more than 80% of the purchase price — will be financed through notes issued to the sellers. The seller notes run for 10 years and carry an 8% annual interest rate. That structure allows ESOP to complete the ownership transition without having to fund the entire redemption price at closing.

There could also be more money for the sellers down the road if the company hits certain performance targets. The agreement provides for an additional payment of as much as $10 per share based on Leighton’s enterprise value in 2028. To qualify, a seller must also remain employed by Leighton or an affiliate through Dec. 31, 2028. The agreement lists projected 2026 enterprise value for the company at $22.913 million.

The transaction is the latest step in an employee-ownership structure that dates back nearly four decades. Leighton established its ESOP in 1987. Today, the plan owns just under half the company. When the redemption closes, that stake effectively becomes 100%.

Unlike a conventional station sale, there is no new broadcaster taking over Leighton’s stations. The company and its stations remain under the same corporate umbrella, but ownership of that parent shifts completely to the employee stock plan.

The agreement also indicates Robert G. Leighton and Jeffrey T. Leighton are expected to remain involved with the company. Both are required to deliver employment agreements with the ESOP at closing. The sellers are also subject to five-year noncompete and non-solicitation provisions covering areas where Leighton conducts business.

FCC Approval Needed

Even though this is an internal ownership transition rather than a sale of the stations themselves, FCC approval is required because the transaction changes who ultimately controls the company holding the broadcast licenses.

The deal includes 25 stations in Minnesota and North Dakota, with stations in markets such as St. Cloud, MN and Grand Forks, ND part of the company’s assets, as well as six unrated markets in the region. In addition to the full-power stations, the transfer also includes 13 FM translators.