Jerry Del Colliano reports: CBS Radio Eyes 2014 Cumulus Merger

[caller10]

Noticed on my FB news feed in the last hour tonight as I post this: Jerry Del Colliano reports: "CBS Radio Eyes 2014 Cumulus Merger". How does this affect All News 106.7, 92.9 The Game, and of course Q100? Not to mention Brent's never ending quest to bring back better music radio.

http://insidemusicmedia.com/cbs-radio-eyes-2014-cumulus-merger/

 

[TheBigA]

There are details in pre-existing contracts that each of the companies have that would make such a deal impossible.

Then you have those pesky ownership limits that would come into play in NY, LA, and Chicago.

And the fact is that Cumulus is at its borrowing limit right now. A straight stock merger would kill the CBS stock price.

My sense is Cumulus is playing around with CBS to see what it can get. But Cumulus still has to deliver on CBS Sports Radio. It's very very early in the courtship. Lots of foreplay still to go.

 

[jabba17]

Then you have those pesky ownership limits that would come into play in NY, LA, and Chicago.

And the fact is that Cumulus is at its borrowing limit right now. A straight stock merger would kill the CBS stock price.

I thought that Cumulus had plenty of dry powder in its Cumulus Radio Investors group...?

Cumulus is also one station shy of being maxed out in ATL since they have to also count the three Dickey Broadcasting stations. Cumulus could add V-103 OR 92.9 OR WAOK but not more than one without divesting something. And the fact that a Dickey divestment of, say, WIFN 1340 would have to be at arms' length (as well as any deal between Dickey and Cumulus to make Dickey whole) makes things even more complicated.

Not sure what Cumulus gets besides a lot of headaches and a lot of debt.

 

[TheBigA]

I thought that Cumulus had plenty of dry powder in its Cumulus Radio Investors group...?

Maybe...I had a few more thoughts in reading through the various articles today on the subject.

CBS Radio has long stated it wants to focus on major markets. They have also sought to bring together radio, TV, internet, and cable into one focused platform. But that platform only works in markets where they also own TV stations. Looking at their radio markets, I see a bunch where they don't own TV stations. Those are markets where the radio stations could easily be sold off without affecting the core business. On the other hand, Atlanta is a Top 10 market where they own TV, so they might want to grow this market, while selling off Phoenix, Las Vegas, Orlando, San Diego, and St. Louis. So there is potential for a smaller deal.

The reverse Morris Trust mentioned today is how Disney sold ABC Radio to Citadel. The bad news is the deal ultimately caused the bankruptcy of Citadel, which led to it being bought by Cumulus. In the ABC deal, Disney kept ABC News Radio, Radio Disney, ESPN Radio, and various call letters and copyrights. One article points out that CBS News owns CBS Radio News, so it might not be part of a CBS Radio sale.

It took a few years for the Disney-Citadel deal to be worked out. Once the story leaked that Disney was exploring the idea, there were other competing bids for the properties. The 2014 date may be right, but there are a lot of things that can happen between now and then.

 

[BarryATL]

The article linked below was on The New York Post's website 1/20/13. It appears the rumors are a little more widespread.

CBS head Les Moonves putting deals under construction
THE NEW YORK POST
By CLAIRE ATKINSON AND JOSH KOSMAN
Last Updated: 5:57 AM, January 21, 2013
Posted: 11:35 PM, January 20, 2013

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

The New York board began a thread on the discussion yesterday. Part of the discussion is not selling the entire company but select markets and some trades in markets they want to be stronger. In particular, Atlanta was mentioned as a market they would want to get more stations.

 

[jabba17]

Part of the discussion is not selling the entire company but select markets and some trades in markets they want to be stronger. In particular, Atlanta was mentioned as a market they would want to get more stations.

I wonder if this could result in a run at LFM or at least Star and 790. Problem is, everyone wants Star and nobody wants 790. I wonder if CBS would buy Star/790, move the 790 talent/programming over to 92.9, and then fire-sale 790 to Cumulus (killing both CBS's and Dickey's competition) and (BRENT, wait for it!) Cumulus could then put TOC on 790.

 

[sportsradiofan]

I honestly wouldn't mind if CBS went 50 miles to the northeast of downtown Atlanta and grabbed up Jacobs Media. The 550 signal is good,and WGGA 1240 was a CBS affiliate from Oct.,1941 until Jacobs bought it and jockeyed around with the format so many times.

 

[TheBigA]

I don't expect anyone will willingly buy an AM station at this point. Unless one comes in a package with a bunch of big FMs, it's not gonna happen.

 

[secondchoice]

Does anyone know about how muck 790 bills now? The rumors was it billed around a half a million a month before 92.9 went sports talk. +6 they are only down .2 from September. I have listen some to 92.9 and have not heard a lot of local / Atlanta (only) commercials.

 

[Gh0stRec0n]

CBS Radio threw cold water at this rumor saying it has NO intention of merging with Cumulus.

As of OCT 2012 they began airing CBS Sports Minutes, but it's a feature with two :30 spots imbedded in it that affiliated stations will run.

a "full on" merger will not exist. besides the borrowing limits, etc, CBS Radio uses CBSI - a CBS specific system for traffic/billing/etc - as well as Cumulus has their own systems.

merging the two network-wise wouldn't be that bad - it would be at the station level where there would be trouble. Although replacing the "Stratus" system at all Cumulus O & O's wouldn't be such a bad idea...

More likely is the possible takeover of Dial-Global/Westwood One as Cumulus made a deal with Triton and launched the first of the year...