Breaking News: CBS Radio to sell 50 stations.

[Fran]

What I do not understand is why any large operator would put their stations up for sale in such a down market. Would you sell your house today if you didn’t have to??

Buyers who once made offers on CC stations at 10X were instantly discarded, but today a 10X offer would result in the seller jetting to your doorstep. Consider that Next Media just sold for $12M. . . . in ’04 they paid $24M. And then there’s the whole issue with the stock prices . . . name a company that is growing? Cumulus certainly was a player. . . but with their stock at $2, there’s not much gun powder to do deals.

The biggest question is, since CBS knows all of this . . . why are they selling, now? Better question, do they just happen to own a really good crystal ball that says, this is as good as it’ll be for a long while.. . . .

 

[calstymes]

Fran queried:

What I do not understand is why any large operator would put their stations up for sale in such a down market. Would you sell your house today if you didn’t have to??

It depends.

The biggest question is, since CBS knows all of this . . . why are they selling, now? Better question, do they just happen to own a really good crystal ball that says, this is as good as it’ll be for a long while.. . . .

The word on the street is that they need cash, and they need cash now. Cash flow, apparently, is very poor at the moment and I would imagine they expect to generate some from these sales.

 

[luperm]

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.

It's a studio, transmitter, and some call letters. Most owners don't have sentimental attachments to radio stations like radio geeks do.

 

[KML0224]

CBS would be absolutely downright foolish to sell of their Hartford cluster. They own WRCH-FM 100.5 of New Britain/Hartford, a.k.a. Lite 100.5, which is nearly always the top-rated station in the market. WZMX-FM 93.7 of Hartford became HOT 93.7, giving Hartford the hip hop/R&B station on FM it was craving, since we only had a 5,000 watt AM filling the void as JAMZ 910 (which was quite good, to be honest). WTIC-AM 1080 of Hartford is the only 50,000 watt clear channel station on the entire Boston Red Sox network. People in other states rely on that fact at night. Lastly, WTIC-FM 96.5 of Hartford, a.k.a. 96.5-TIC, does well as a HOT AC station. Granted, I still wish they were in their heyday as CHR/TOP 40 96 TIC-FM (it changed to HOT AC in 1994). Their station led the ratings for several years.

 

[TheBigA]

Tom Taylor said something in his daily email I agree with, which is he expects them to sell STATIONS, not necessarily CLUSTERS.

Sure, some entire clusters will probably go. But CBS likes to get regular checks from people they do business with. My theory is that in a down economy, where they can't expect top dollar for their stations, they will sell for a slightly lower price with a provision that the station remain in the company facility and pay rent and other service fees for a period of years. It's the gift that keeps on giving. In many of these cities, CBS owns the building. If they make deals like this, they can keep their some of their support staff, pay them from money they get from these sold stations, and have a new revenue source...one that might be better than the advertising market right now.

This benefits the new owners in that they don't have to make a huge capital investment for new studios or hire full staffs. They inherit some people in the sale, and pay a fee to CBS for technical and secretarial support. It's a win-win. I expect a lot of these new owners will be coming from the community, since all the major radio companies are in even worse shape than CBS. They'll all need support in launching their new business. This is one way to do it.

 

[kentuckymedia]

Some clusters will go. Off the top of my head, West Palm Beach, Denver, Riverside, Cleveland and Palm Springs would be the first ones.

San Diego is nice, but they only make money on one station.

As for selling individualy stations...maybe a couple poor AM signals and weak FM's in certain markets.

 

[Biz Listener]

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.

The thing is, KDKA-AM's transmitter is in bad shape and they're losing audience at an accelerating rate. What's worse, they aren't losing listeners to other radio stations, they're losing them to the Grim Reaper. KDKA's audience is mostly senior citizens whose tuning dials rusted into position at 1020 years ago. It's no longer the Pirates flagship station (and with the way the Pirates have been playing over the past decades, that doesn't mean much anyway). It's no longer the official "school closing announcement" station on mornings when it snows. The rest of their stations in Pittsburgh aren't exactly setting the world on fire, either.

CBS might keep KDKA, but it won't be because it's particularly valuable, except maybe as a nostalgic collector's item. I doubt that they'll keep any other stations in Pittsburgh. At the rate Pittsburgh is losing population, it won't be long until it's no longer in the top 30 markets.

 

[RadioStarOne]

Anybody think that just maybe Mr. Redstone just gave the order to Les to get rid of the dead weight? Maybe he wants to go shopping for something new? A football team maybe?

How many of these stations will Randy Michaels and his new company be willing to buy? Just thinking out loud....your thoughts?

 

[TheBigA]

Anybody think that just maybe Mr. Redstone just gave the order to Les to get rid of the dead weight?

CBS has invested a lot of money in last.fm and cnet. A lot of money in the future of media. It hasn't paid off in the stock price, which has dropped 50% in the last year. The "dead weight" is perceived as radio. It's not necessarily the reality, but it's the perception, and you can't defend something that was down 10% last quarter. You have to at least appear to be doing something about it. So this is what they're doing.

How many of these stations will Randy Michaels and his new company be willing to buy? Just thinking out loud....your thoughts?

A few bloggers have been suggesting Randy wants back into broadcasting. This is coming at a bad time, because Tribune has to sell off a lot of assets itself first, like the Cubbies and Wrigley. They just got rid of Newsday, so that was a good move. The stations he'd like most are probably not for sale. Although if you're willing to pay top dollar, anything is for sale. Which might mean one of the NY AMs. Ahhh, speculation!

 

[disney fanatic]

Please for the love of god, don't sell CBS-FM, keep it as you are!

Why not dump "K-Rock" and "Fresh" and leave CBS-FM alone. 50 stations is enough to sell. CBS is one of the best radio & TV network properties around. Remember when it was Infinity owned by Viacom or the "V of Doom"? They split them up in late 2005 to become CBS Radio.

I guess CBS should keep these stations in the NYC area for now except for K-Rock to dump the format by years end.

 

[DToTheJ]

Please for the love of god, don't sell CBS-FM, keep it as you are!

Why not dump "K-Rock" and "Fresh" and leave CBS-FM alone. 50 stations is enough to sell. CBS is one of the best radio & TV network properties around. Remember when it was Infinity owned by Viacom or the "V of Doom"? They split them up in late 2005 to become CBS Radio.

I guess CBS should keep these stations in the NYC area for now except for K-Rock to dump the format by years end.

Here's a thought... there's a possibility the New York stations could be on the block - if you take into consideration a quote from the latest Tom Taylor newsletter:

"... One savant says "Dan Mason says that in markets where they don't have four or five FMs, they will be sellers." They want a big presence in a market."

Of the six stations CBS owns here, just three of them are FM stations.

Yes, I think CBS would be crazy to sell their New York and Philly properties, too - but stranger things have happened...

 

[kentuckymedia]

CBS makes WAYYYY too much money in NY and Philla. They may spin them and shock us all, but something tells me otherwise.