Could CBS' Charlotte Cluster Be Sold?

[DToTheJ]

The big news today is that CBS will be selling fifty stations in order to concentrate on "larger markets". It is not known at this time which fifty will be sold.

However, another poster has done his homework...

Hmmmm...
http://www.radio-info.com/smf/index.php/topic,105706.msg835157.html#msg835157

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.

Now, everybody knows CBS wipes the floor with all the other radio owners in the Charlotte ratings. So it would be odd if they were to part ways with such a cash cow. But given the equation above - and the fact that, this is the business of radio, after all - anything is possible.

 

[mediawatch22]

I really doubt that CBS would sell off the entire Charlotte cluster. Perhaps one or two stations, but that would be it. Charlotte is a growth market with their stations performing extremely well. They would have to be desperate to sell off such a desirable group. But, this is radio, and anything is possible.

 

[Mike Sheridan]

I wonder if it's a way to shed some lower performing AM stations? I can't see them bringing much money but you never know. At first I thought they might sell a few stations in each cluster but when you are operating 7 stations in one city the costs can be spread out and lets face it there are savings from the reduction in staff. So it seems they would sell entire clusters.

NBC is selling WTVJ-TV Miami and using the same excuse. Not a big enough market for them to bother with (Miami not big enough?). Others looking at the move say this is a smoke screen, and that the real reason is NBC needs money.

I wonder if this has anything to do with CBS buying C-Net?

 

[Kent]

I tend to agree with a few posts on one of the other boards, which is that CBS will unload a substantial number of AM's, sell a few smaller clusters and swap some undersized clusters for a few other undersized clusters. It was pointed out that CBS has nearly 40 AM's that don't generate a large amount of cash flow.

 

[yugoidar]

Yeah, I'll bet they'll be standing in line to buy those AM stations.  In today's radio world, finding a buyer for any station is difficult unless you want to give it away.  They're aren't too many radio guys with money to spend at a time when the economy is soft and commercial sales are in a downward spiral overall.

 

[Rick Rose 2.0]

I am thinking this might be a perfect chance for Cox to get some radio stations in this market again. Owning a just a TV combo seems a little less than what Cox would like to have in the Queen City. This would continue the line of stations Cox owns from Birmingham to Greenville into Charlotte. That would mean the possibility of Cox doing something different with 610 to up its billing. I wonder.

 

[Kent]

Yeah, I'll bet they'll be standing in line to buy those AM stations. In today's radio world, finding a buyer for any station is difficult unless you want to give it away. They're aren't too many radio guys with money to spend at a time when the economy is soft and commercial sales are in a downward spiral overall.

I agree that they wouldn't get what they would have a few years ago for anything, especially AM stations. However, don't think there wouldn't be any buyers for AM's with good coverage of top-30 markets. There are plenty of religious and ethnic broadcasters who would salivate at that chance.

 

[Mike Sheridan]

Yeah, I'll bet they'll be standing in line to buy those AM stations. In today's radio world, finding a buyer for any station is difficult unless you want to give it away. They're aren't too many radio guys with money to spend at a time when the economy is soft and commercial sales are in a downward spiral overall.

I agree that they wouldn't get what they would have a few years ago for anything, especially AM stations. However, don't think there wouldn't be any buyers for AM's with good coverage of top-30 markets. There are plenty of religious and ethnic broadcasters who would salivate at that chance.

Good points all. I have to ask the question though...how much does it cost CBS to run closet operations line their AM's in Charlotte WFNZ and WFNA? I think they will sell entire clusters. If they do sell the AM's it will no doubt go to religious groups with deep pockets. The little guys who might have been able to get financing in the past can't do it now that banks are having such a hard time in the real estate market.

How much can Cox own in Charlotte given the fact they own 2 TV stations? I doubt they are looking for AM stations. After all they sold WIOD in Miami years ago to Clear Channel and also one of the biggest AM's in the country KFI in LA. KFI is HUGE!

Then again Disney sold all the ABC radio stations while retaining the pitiful Radio Disney Stations which defies logic. With that in mind I guess anything is possible!

 

[DToTheJ]

Then again Disney sold all the ABC radio stations while retaining the pitiful Radio Disney Stations which defies logic.

Actually, ABC/Disney's "logic" is for Radio Disney stations (as well as most ESPN Radio outlets) to exist mostly as 24/7 "billboards" for their brand.

 

[yugoidar]

Radio Disney - Stations with such poor signals that they appear as "billboards" hidden by trees!

 

[Mike Sheridan]

Who would buy the CBS Charlotte stations if it turns out they're for sale? Would Greater Media add to the stations they already have here? How many more can they own?

Since Charlotte is still a growth area will CBS stay?

 

[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.

 

[Kent]

Good points all. I have to ask the question though...how much does it cost CBS to run closet operations line their AM's in Charlotte WFNZ and WFNA? I think they will sell entire clusters. If they do sell the AM's it will no doubt go to religious groups with deep pockets. The little guys who might have been able to get financing in the past can't do it now that banks are having such a hard time in the real estate market.

How much it costs to run stations like WFNZ and WFNA may be less important than what they could get for them. I doubt 1660 would bring them much, but 610 should be worth something. Keep in mind that Clear Channel sold 3 AM's in Washington DC for $25 million. CBS wouldn't get that in Charlotte for its AM's, but they have plenty of other large market AM's that could sell for a better chunk of change than some might think.

Something I do agree with you on is that they're not likely to break up successful clusters of FM's. Regardless of what happens with WFNZ and WFNA, I can't see CBS selling WPEG and WBAV to Radio One while keeping the remaining 3 FM's. They're almost certain to either keep or sell all 5, though they might split such a cluster up among a couple or three different buyers. The rumors going around the web (so, take them for whatever you think they're worth) is that Sacramento and Pittsburgh have been put on notice they're being shopped while St. Louis was told it was not going anywhere.

If CBS is really shopping Pittsburgh, I have to think Cleveland will go, too. A few months ago, I read Cuyahoga County has lost more people than any other county in America this decade, and the Cleveland area has lost more people than any other metropolitan area except for New Orleans. However, Charlotte is not a market in decline like Cleveland and Pittsburgh.

 

[yugoidar]

Who would buy the CBS Charlotte stations if it turns out they're for sale?  Would Greater Media add to the stations they already have here?  How many more can they own?

Since Charlotte is still a growth area will CBS stay?

Mike, while claiming their list is unofficial, someone at allaccess.com is suggesting today that Charlotte is one of the markets that CBS will be selling. 

 

[fortmill]

One things for sure--with CBS Charlotte often claiming 4 of the top 5 stations in market 25, they certainly are not loosing money in the QC. So, why would they sell? But large broadcasting companies are not known for making sound decisions, and I fully expect the Charlotte stations to go---after all CBS probably looks at Charlotte as a small sleepy southern town. Remember, NBC just sold their Miami TV station, saying the market (#12?) was too small.....

 

[radiochic05]

Based on CBS' selling history, when they sold stations in their last downsizing, they sold clusters and got completely out of that market. Stands to reason the same thing will happen this time. Also, don't think for a moment they won't sell highly or over-performing stations. They'll get the most return for those stations which is why they are selling in the first place-to raise money. In markets they performed very well before (i.e., Kansas City and Austin) they sold everything. I'd expect the same this time. Also, based on their history, when I read their "situation is fluid" comment on which stations were selling, I chuckled. In KC, we heard rumors for months we were "for sale." Months before it was common knowledge in the industry. The fact an announcement has been publicly made saying they were selling 50 stations, I tend to think negotiations are likely in progress or are already nearly complete. I believe we'll know which stations sooner than later.

 

[DToTheJ]

A quote from today's 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."

So could CBS' Queen City properties be safe?

Stay tuned...

 

[yugoidar]

DToTheJ, maybe this quote answer's your question:

One things for sure--with CBS Charlotte often claiming 4 of the top 5 stations in market 25, they certainly are not loosing money in the QC. 

Truth be known, it's all rumors at this point, and only the big brass at CBS have an idea as to what stations they might be offering for sale.

 

[DToTheJ]

And if you read my initial post in this thread, I've argued that same point.

 

[mediawatch22]

If CBS sells Charlotte, Cox might be a logical buyer. A previous post mentioned that Cox had sold KFI (and KOST) in Los Angeles. The reason for that had to do with aquiring a couple of Florida clusters as well as some other properties on the east coast. It was a trade-off with AM/FM (pre-Clear Channel). Cox wanted out of the west and wanted to focus on east coast markets exclusively. Charlotte would be a good market for Cox except that they like to dominate with news/talk on AM and Charlotte already has a successful station in the format.

I'm sure the weeks ahead will be quite interesting!