Breaking News: CBS Radio to sell 50 stations.

[Chris_Rose]

CEO Les Moonves says the decision to divest 50 mid-sized markets comes as the company adjusts its portfolio. He says "By selling these slower-growth stations, we can focus on the larger markets that are showing real growth." Moonves says big market stations did "very well" in the second quarter. Overall, CBS Radio same-station revenues dropped 9% in second quarter to $416 million.

 

[KDRadio]

did they annonce which stations?

 

[djj]

did they annonce which stations?

No, they have not...to quote from All Access News this hour:

"...At present, there is not a specific list of stations/markets affected as the 'situation is fluid'."

--jay

 

[tophour]

They would sell exactly 50 stations if they simply pared off their smallest 11 markets: Palm Springs, West Palm Beach, Hartford, Las Vegas, Orlando, Cleveland, Sacramento, Riverside, Charlotte, Pittsburgh and Portland.

 

[Shoot From Hip]

On the other hand, is the company better off with 2 stations in San Diego vs. 6 in Vegas? Or 2 in Atlanta vs. 6 in Portland? Might not be an easy call in some of these markets where they don't have much traction.

 

[jdweaver]

This will be interesting. There is no public equity available - that is, I don't see anyone willing to part with cheap stock to buy stations. There is little or no investment money available except maybe at VERY low multiples (3-5X) and I doubt CBS will take a note back from the buyers. I contend that these stations have the most value to CBS...but apparently that's not the thinking...

 

[War Of Attrition]

They would sell exactly 50 stations if they simply pared off their smallest 11 markets: Palm Springs, West Palm Beach, Hartford, Las Vegas, Orlando, Cleveland, Sacramento, Riverside, Charlotte, Pittsburgh and Portland.

Good work tophour!

If your guesses are correct, it will be odd that they chose Denver, market 22, to be the cut off point. CBS only has 3 stations in Denver and the cluster is very week.

But possibly selling Charlotte, market 25, where they are at the ownership cap and the cluster is over-performing. Plus, Charlotte is a fast-growing market that has been leap-frogging forward every measurement period.

 

[Phil S]

I really can't see CBS selling off Pittsburgh. KDKA is undisputably one of CBS's flagships, and has perhaps the strongest brand in the market. Not to mention the HUGE tie-in value with KDKA-TV, and WNPA to a lesser extent. I think they'd probably sell off their little duo in SD before parting with Pittsburgh.

 

[KDRadio]

I dont see them dumping Hartford they have 4 stations out here and they are all in the top 5

 

[DToTheJ]

Likewise, CBS wipes the floor with the other stations in Charlotte.

It would be unconventional for them to sell top-performing clusters in such markets.

 

[DToTheJ]

I dont see them dumping Hartford they have 4 stations out here and they are all in the top 5

Likewise, CBS wipes the floor with the other stations in Charlotte.

It would be unconventional for them to sell top-performing clusters in such markets.

 

[tophour]

I wasn't making any predictions earlier, just stating some quick math.

If it's really all about growth, then Pittsburgh might very well be first on the sell list for the same reason they wanted out of Buffalo last year: graying, rust-belt market. That said, they sold Austin in the Entercom deal, and that's a huge growth market, just like Vegas and Charlotte. CBS says they'll use the proceeds for stock buybacks, but with the poor credit market, I wonder if there might not be some swapping to fill out some of the smaller station counts in other markets. There might be some creative stuff out there waiting to happen.

 

[luperm]

It may make sense to dump some better performing clusters as they could command a better sale price.

Some of their poorly performing clusters may sell only based on a "stick value" price.

 

[Bongwater]

For CBS to sell KDKA would be like the US government selling the White House on eBay. That station is a piece of American history and too much of an icon to let slip away.

 

[deadman]

SELL THE ATLANTA CLUSTER....

 

[htowler]

As long as they don't Sell CBS-FM NYC

K-Rock they can dump

Anyone think they might sell Orlando?

 

[kentuckymedia]

I dont know...looking at the ownership list.

CBS likes Pittsburgh, and they are doing well there. Plus, KDKA is a flagship and a great tie in with their television outlet.

CBS also enjoys the performance in Hartford and Charlotte.

I have a feeling some swapping will go on so they can grow some of their clusters and get out of smaller markets. Maybe like swapping some stations. Could LincFin be part of the bigger picture?

Maybe in San Diego sell KYXY to LincFin and sell KSCF to another operator
Maybe in Denver sell KXKL and KIMN to LincFin and sell KWLI to another operator
Then after those stations are sold to LincFin, make an option to purchase WSTR Atlanta to add to their cluster

Then spin off Palm Springs, Riverside...maybe swap Phoenix for Saint Louis to Bonneville?

 

[davideduardo]

I dont know...looking at the ownership list.

CBS likes Pittsburgh, and they are doing well there. Plus, KDKA is a flagship and a great tie in with their television outlet.

CBS also enjoys the performance in Hartford and Charlotte.

I have a feeling some swapping will go on so they can grow some of their clusters and get out of smaller markets. Maybe like swapping some stations. Could LincFin be part of the bigger picture?

Maybe in San Diego sell KYXY to LincFin and sell KSCF to another operator
Maybe in Denver sell KXKL and KIMN to LincFin and sell KWLI to another operator
Then after those stations are sold to LincFin, make an option to purchase WSTR Atlanta to add to their cluster

Then spin off Palm Springs, Riverside...maybe swap Phoenix for Saint Louis to Bonneville?

I think you have the right idea. Get out of some negative growth and smaller markets, and swap into better clusters, too.

There are 15 AMs billing under $7 million like WFNA, WQYK, KIKK, RKAK, KYCY, SKFN, KCMD, KPTK, WPGC, WJFK, KXNT, WFNZ, WAOK, WXYT, KHTK, etc that make no sense to keep, and even a number of dismal FMs. Add in Victor Valley, Riverside (shadow market, low billing) and Palm Springs, and you have 35 to 40 stations.

If you want a really out of the box idea, maybe they sell all the AMs, considering they have lower margins, almost all are heavy 55+ and most are declining in billings. I think they have 33 or 34 AMs, so that would work, too.

 

[liradioisbad]

For CBS to sell KDKA would be like the US government selling the White House on eBay. That station is a piece of American history and too much of an icon to let slip away.

Well Disney did sell all of it's-non ESPN Radio/Radio Disney radio properties, including WABC, so anything's possible.

 

[kentuckymedia]

Atlanta is a growing market. LincFin owning one station doesnt make sense. However, if LincFin can bulk up their clusters in San Diego and Denver...who knows maybe even get into Vegas and sell CBS WSTR Atlanta with some cash, it would be much easier for LincFin to sell out in the future, which is their ultimate plan.

Saga has to be chomping at the bit for a few properties, in the past they have expressed dire interest in Hartford, and maybe...just maybe, CBS would get rid of that market. However it does very well for them.

Riverside, Palm Springs, Victor Valley are all shadow markets and they could do without.

Maybe sell an AM in Los Angeles and a low performing FM to Bonneville?

Im really thinking, Bonneville gives CBS their cluster in Phoenix. Then Bonneville gets out and bulks up in Saint Louis.

I totally agree with you David on them spinning off a ton of AM stations. You have operators that would pay a million or two for some of those...it could easily bring them in 30-40 million with some sales.

Then you spin off Minneapolis to the newest operator in town...Northern Lights Broadcasting

This is a list of their markets they will prolly stay in...or one would assume

ATLANTA - The pick up WSTR
BALTIMORE
BOSTON
CHARLOTTE
CHICAGO
DALLAS
DETROIT
HOUSTON
LOS ANGELES
NEW YORK
ORLANDO
PHILADELPHIA
PHOENIX
PITTSBURGH
PORTLAND
SACRAMENTO
SAN FRANCISCO
SEATTLE
TAMPA
WASHINGTON

Sell out of Denver, Saint Louis, San Diego, Victor Valley, Cleveland, Riverside, Palm Springs, West Palm Beach, Vegas, Cleveland and Minneapolis

Just my thoughts...