It's not. But KDKA was a pioneer in that as well.
There were thousands in this town with their dials frozen on 1020 by the 1950's.
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CBS to sell entire radio group
- Thread starter davideduardo
- Start date
It's not. But KDKA was a pioneer in that as well.
There were thousands in this town with their dials frozen on 1020 by the 1950's.
So what's your solution?
There is no need to live in a particular city to know that the heritage news/talk AMs have an aging audience. The generations under 50 grew up on FM only, and don't use the band or the type of content much.
"Elderly" is a bit of an exaggeration. "Aging" is the right term. KDKA has lots of 45-64 listeners, who are older but hardly called "elderly" today. In fact, KDKA wobbles in and out of the top 10 in 25-54 in 6 AM-7PM and is inside that group in both mornings and middays. It certainly has some life left.
But unlike the stations that CBS acquired in the 90s, the Miami cluster has just been acquired by CBS. Those stations now have an owner crisis (much like an identity crisis, but they have different owners, who knows who will own them. iHeart and Cox is too full. I think Entercom has some room.
I am wondering about the AMP Radio branding, as despite being successful, it will probably be one of the major brand "suicides", because CBS Radio is selling all it's stations, and for the AMP Radio brand to live on, there has to be an owner who can acquire all the AMP Radio stations while keeping the other sister stations in an AMP Radio market (like NYC) together.
Who knows what will happen to radio.com, last.fm, and play.it?!
IDK about Orlando, maybe Beasley will enter Orlando as it's one of the rising radio groups. Alpha is rising, but only has one market (West Palm Beach) in Florida.
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I think some of you are overthinking this whole thing. When he made this announcement earlier this week, Les Moonves said his goal was to increase shareholder value. At the time, CBS stock was trading at $51 a share. The next day, it was trading at almost $55 a share. Mission accomplished. He didn't actually sell a thing, he just improved shareholder value. That's how the market works.
The Miami cluster was swapped for stations acquired in the 90's via the American Radio Systems deal, a swap with Entercom involving stations acquired from ARS, a castoff from the Clear Channel/AMFM merger, and two stations acquired from Infinity in '96. Those stations will have the tax bases of several of those stations.
Too soon to say. However, station sales, if any actually happen, can often include the rights to use the existing branding. I still think the most likely scenario is a spinoff to existing shareholders. That would mean no real changes, though there could be a few swaps before or after such a spinoff.
Anyone who says they know at this stage of the process is either psychic or lying.
Again, most likely is that the Orlando cluster will be spun off with the rest of the group and be run by existing management. I don't see Alpha doing much expanding because of the trouble it had with the Digity deal. You can only leverage so much before you can't get any bigger.
Something else I'll mention is that not all mergers are created equally. Depending on how the deal was structured, a merger may also be able avoid taxes by doing stock-for-stock transactions instead of cash deals. So, it's possible that some of the stations acquired from Infinity and ARS haven't incurred capital gains taxes and still have old tax bases. I just can't remember specific details of deals I wasn't privy to and happened almost 20 years ago. I remember ARS was itself created in the early 90's from the merger of three groups: Atlantic, Pyramid and Stoner Broadcasting. I don't, however, know if there was a stock transaction or sales that created it.
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And Moonves has made similar statements along the lines of "we're thinking about getting out of radio" before, with the same results in the stock price.
I sense Chicken Little syndrome is starting to affect these threads about CBS' radio division ...
A lot of wishful thinking among ex-jocks and radio haters, somehow thinking this is the beginning of the ultimate demise of the business, or that these stations will fall into the hands of mom and pop owners, who will hire us all as 60 year old top 40 DJs
When will the Boy Who Cried 'Wolf' syndrome start to affect the oh-so-gullible money-changers of Wall Street when corporate executives put such obvious stock-price-boosting speculation out there?
Probably never. P.T. Barnum made his observations over 150 years ago. It all seems just so predictable.
doubtful
You're attempting to say something specific with two generalities. Wall Street doesn't act like a single person, and radio is not all one thing.
In the specific case of CBS, the radio division has been holding back the stock. The division has lost money over the last few quarters. So taking some action on the division was seen by investors as a move towards improving the profitability of the company. The same week as the CBS announcement, the new CEO of Cumulus announced a very concrete plan towards moving the company back to profitability. The result was the stock doubled in value. So what can you generalize from those two stocks? Wall Street likes action. Wall Street likes to hear proposals that are aimed at improving stock price.
Actually, there was no threat. There was the suggestion that CBS might sell or spin off the radio division to focus on areas with a higher rate of growth. The obvious intent of this was to show investors that CBS was not stuck int he past and was willing to revise its business model to achieve a better rate of growth.
I seriously doubt the CBS Radio Division is losing money. IF the results are broken out and IF this is the case, it's because of an allocation of overhead to the division that's intended to make another division look better. Those stations have no debt and many are the top billers in their markets.
Those assets are, clearly, slow growth assets, but could be positioned as a standalone company with a good dividend. A split off strategy triggers taxes, maybe a lot of taxes, so IF the divesture of radio does indeed happen, it's likely to be as a tax free spinoff to shareholders with some equity held back for a secondary stock issue to provide the new company with capital.
Those assets are, clearly, slow growth assets, but could be positioned as a standalone company with a good dividend. A split off strategy triggers taxes, maybe a lot of taxes, so IF the divesture of radio does indeed happen, it's likely to be as a tax free spinoff to shareholders with some equity held back for a secondary stock issue to provide the new company with capital.
I have read a fair number of Mr. Eduardo's posts, and I get his point.
It's the age-old divide between the business logic of an operation and the view of its consumers.
The business logic of a particular restaurant might dictate that you churn out the cheapest possible slop
as quickly as possible. But your customers don't have to like it.
KDKA may very well be billing big numbers with hour-long blocks like "Dr. Rodney Schmedlapp
with Your Spleen and You", or "The Grunder-Speckman Realty House Flipping Hour". But it's not
pleasant listening.
And if the audience stops listening sooner or later these sponsors are going to quit buying the blocks.
It's the age-old divide between the business logic of an operation and the view of its consumers.
The business logic of a particular restaurant might dictate that you churn out the cheapest possible slop
as quickly as possible. But your customers don't have to like it.
KDKA may very well be billing big numbers with hour-long blocks like "Dr. Rodney Schmedlapp
with Your Spleen and You", or "The Grunder-Speckman Realty House Flipping Hour". But it's not
pleasant listening.
And if the audience stops listening sooner or later these sponsors are going to quit buying the blocks.
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For decades, news/talk stations have had much lower weekend audiences than the levels customary on weekdays. So, at some point many stations decide that, if nobody is listening anyway, they might as well sell the time.
There is an obvious come-back in "maybe they don't listen because they were fed crap on weekends." I happen to believe that and had experience programming a 50 kw talker... coincidentally on 1020... in LA with a very strong weekend lineup. The results were having higher Saturday and Sunday ratings than the weekday numbers as well as having a very good setup for Monday listening. Unfortunately, the costs were high and management began selling the evening and early morning blocks for infomercials and the numbers went down.
My belief is that any deviation from listener expectations, even late evenings on a weekend, eventually undermines the station and puts it into a decline mode.
I would suggest, based on what I know, that other divisions are more likely picking up some radio costs. Certain talent costs for shared news staff, facilities costs in shared building, plus legal and engineering costs.
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