A CBS RADIO BUYOUT?

[whatsnew3000]

Any thoughts about the upcoming discussions with Cumulus buying CBS Radio which already has 80 stations?

What would this do to 92.3 NOW, FRESH 102.7 and WCBS-FM?

http://www.nypost.com/p/news/business/les_wants_more_Vd5Wv5O7fLS1HqbedU0nmN

CBS head Les Moonves putting deals under construction

Cbs head honcho Les Mooves is looking to ramp up dealmaking as part of an overhaul of his old-growth media company.

His first step — a spinoff of the billboard division — has sparked talk that CBS Radio will be the next to hit the market.

While CBS insists radio is a core business, industry insiders believe Moonves is open to a sale of the station group as he looks to reduce the company’s reliance on advertising and shed slower growth businesses.

“He’s trying to diversify. He’s actively looking. He’s got to do something,” said a top entertainment executive. “And he’s not being shy.”

[EDIT-Citation exceeds amount of permissible content under Fair Use and has been truncated.]

 

[MoldaMania182]

This has come up before. It's just very unlikely, there's far too much complexity in many markets.

 

[FightingIrish]

I don't think Cumulus has the cashflow to pull that off. Plus, CBS owns some very profitable radio stations, some heavily tied into their sister TV operations.

 

[TheBigA]

I don't think Cumulus has the cashflow to pull that off. Plus, CBS owns some very profitable radio stations, some heavily tied into their sister TV operations.

Exactly. CBS, more than any other company, has built itself into a multi-platform media company where radio is a part of the overall structure with TV and the web.

HOWEVER, having said that, when you look outside the Top 10 markets, there are still a lot of free standing radio stations without TV partners. Those are markets that CBS could easily sell, and keep with their stated program of focusing on major markets and content creation.

The deal discussed in the Post article sounds similar to the one Citadel did with ABC in 2006. That was also a reverse Morris Trust, in which ABC retained ownership of its Radio News department, Radio Disney, certain ABC call letters and copyrights, and ESPN Radio. Keep in mind that this deal led to the eventual bankruptcy and sale of Citadel to Cumulus. So such a deal would merge ABC and CBS assets in one company.

Analysts estimate that CBS Radio could be worth as much as $5 billion. I don't know how they came to that number. It's well above the cash available to Cumulus. But there are all kinds of ways companies can finance large purchases. They could probably afford to buy the second tier of stations, including St. Louis, Seattle, Sacramento, Baltimore, Las Vegas, Orlando, Phoenix, and San Diego. A few trades could also be included, in major markets where CBS might want to grow, such as Atlanta, Houston, and San Francisco.

 

[Bob1370]

"CBS insists radio is a core business"

And also arguably the most profitable business they have. So it's not likely to be spun off or sold.

Not to mention that there just aren't other companies in the media realm right now that have the cash to afford such a buy, and the kind of corporate structure that would make the radio division complementary to other things they're doing...except the one company where it'd be a good fit.

That company is Disney.

But the Mouse thinks any radio properties that don't dovetail easily and directly with other properties they already have (the way Radio Disney and the Disney Channel do, and ESPN radio and TV do) aren't properties they want. Otherwise they wouldn't have left the radio business a decade ago and spun off ABC"s radio properties to Citadel. You can argue (and I would) that selling ABC radio was bad for the division and the stations and bad for Disney, but unless anyone thinks Bob Iger has regrets, that ain't going to be revisited or reversed.

As far as Cumulus is concerned, they'd struggle to make that merger happen, much as they may want to do it.

 

[TheBigA]

Not to mention that there just aren't other companies in the media realm right now that have the cash to afford such a buy,

It's not just having the cash, because clearly a lot of media companies are flush with cash right now. The reality is that if a public company buys radio stations, it's stock will fall, because OTA radio is simply not viewed as a profitable investment. And yet Cumulus has the confidence from a few investment companies to spend money on aquisitions. Cumulus stock isn't a dividend-producing stock like CBS. So if it takes a hit, it's no big deal.

 

[htowler]

Some stations? maybe. but the whole package..... NO WAY. I don't think Cumulus has money like that anymore....Citadel took care of that. If some stations sold I dont see the expensive Market One stations included.

 

[carolinaradio]

Cox attempted to exit the radio markets they didn't have TV stations in last year, but I don't think anything ever came of it. I could see something similar happening with CBS. Markets such as Orlando, Cleveland, Hartford, St. Louis, and Charlotte.

 

[TheBigA]

Cox attempted to exit the radio markets they didn't have TV stations in last year, but I don't think anything ever came of it. I could see something similar happening with CBS. Markets such as Orlando, Cleveland, Hartford, St. Louis, and Charlotte.

Interesting...those are the exact same markets CBS would like to leave. Lot of opportunities.

 

[davideduardo]

Cox attempted to exit the radio markets they didn't have TV stations in last year, but I don't think anything ever came of it.

Cox is currently evaluating various offers for the smaller / non-TV markets. It's moving ahead very definitely.

 

[KML0224]

I could see something similar happening with CBS. Markets such as Orlando, Cleveland, Hartford, St. Louis, and Charlotte.

I doubt they would sell in Hartford. Two of the four stations they own in Hartford/New Britain/Middletown are the top rated and/or top billed:

WRCH-FM 100.5 New Britain/Hartford (AC) "Lite 100.5"
WTIC-AM 1080 Hartford (News/Talk)

They also own WZMX-FM 93.7 Hartford (Urban Contemporary) ["Hot 93.7"]. They filled a big format hole which Hartford didn't have on FM until 2001. The station fought off (and won) with Clear Channel's attempt with competition. 104.1 FM was "Power 104.1" for barely four years. The station since went back to their previous modern rock format in 2007 and was sold to another company.

The fourth station is WTIC-FM 96.5 Hartford (Hot AC) ["96.5-TIC"]. At one time, they were CHR/Top 40 formatted "96 TIC-FM" and was consistently one of the top two stations in the market.

 

[davideduardo]

I doubt they would sell in Hartford. Two of the four stations they own in Hartford/New Britain/Middletown are the top rated and/or top billed:

At one point, they said they wanted to leave all markets outside the top 20 to 25.

That's why the sold the West Palm Beach cluster, despite it being a relatively good growth market.

 

[nickp]

cbs buy cumulus Lew Dickey as ceo Leslie Moonves as Executive Chairman

 

[carolinaradio]

Cox attempted to exit the radio markets they didn't have TV stations in last year, but I don't think anything ever came of it. I could see something similar happening with CBS. Markets such as Orlando, Cleveland, Hartford, St. Louis, and Charlotte.

Interesting...those are the exact same markets CBS would like to leave. Lot of opportunities.

They own no TV stations in those markets, so no question that's why they'd want out of them, they're also smaller. If not Cumulus, those would be nice markets for a company like Entercom, who I believe tried to buy the ABC stations as well as Citadel, later on. They have bought from CBS in the past.

Most of Cox's stations are successful that they're trying to sell...they just want out of non-TV markets. I'd actually be glad whenever they sell. Their stations can be so boring and conservative at times.