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So, is Cumulus really going to buy CBS Radio?
- Thread starter teriwats
- Start date
Would be an incredibly messy situation in markets where both are at or near the ownership caps. Would be the same situation as the late 90's and early 00's with all the consolidation and spinoffs. Of course, fresh ownership for the spun off stations might not be a bad thing.
1) Who on earth would give Cumulus the money to buy CBS Radio? Where would the money come from?
2) Even if Cumulus could find some idiot to give them MORE debt, would they ever offer what CBS wants for the stations? CBS Hartford is one of the smaller clusters that's always been rumored to be for sale, but nobody's ever come up with the money that it'd take to break the cluster free. It's a money MACHINE.
When you've got no debt, why would you sell some of the biggest money generators in the radio business for a sweetheart deal? You wouldn't. 5 of the top 10 revenue producing stations in the country belong to CBS Radio, more than any other broadcast owner (4 belong to Clear Channel, 1 belongs to Hubbard.) Those stations are WCBS, WBBM AM/FM, WINS, WFAN, and KROQ.
I'm sure CBS and Les Moonves want to make the company more focused, but I don't see a situation where this deal would actually work.
FWIW, it's in my best interest for this deal not to work as an employee of CBS Radio.
2) Even if Cumulus could find some idiot to give them MORE debt, would they ever offer what CBS wants for the stations? CBS Hartford is one of the smaller clusters that's always been rumored to be for sale, but nobody's ever come up with the money that it'd take to break the cluster free. It's a money MACHINE.
When you've got no debt, why would you sell some of the biggest money generators in the radio business for a sweetheart deal? You wouldn't. 5 of the top 10 revenue producing stations in the country belong to CBS Radio, more than any other broadcast owner (4 belong to Clear Channel, 1 belongs to Hubbard.) Those stations are WCBS, WBBM AM/FM, WINS, WFAN, and KROQ.
I'm sure CBS and Les Moonves want to make the company more focused, but I don't see a situation where this deal would actually work.
FWIW, it's in my best interest for this deal not to work as an employee of CBS Radio.
F
FredLeonard
Guest
If it happens, then all the major networks are out of the radio business.
How much do you think CBS Hartford would go for? I think $75 Million. What do you think higher or lower?
That's right in the neighborhood of a conservative multiple of their cash flow. $70 to $90 million is a good range.
Disney sold ABC, sure. That sale, which happened before the economic crisis, created one of the most debt ridden broadcasting companies in the world. The stock became so worthless that it was delisted from the NYSE. The company had to file for bankruptcy and creditors took a bath. Eventually, that company was gobbled up by Cumulus, the new competitor with CCM+E for the title of "most debt-ridden broadcaster."
No investor would let that happen again. Nobody in their right mind is giving Cumulus any more money.
Disney sold ABC, sure. That sale, which happened before the economic crisis, created one of the most debt ridden broadcasting companies in the world. The stock became so worthless that it was delisted from the NYSE. The company had to file for bankruptcy and creditors took a bath. Eventually, that company was gobbled up by Cumulus, the new competitor with CCM+E for the title of "most debt-ridden broadcaster."
No investor would let that happen again. Nobody in their right mind is giving Cumulus any more money.
I'm not sure CBS wants to sell their entire radio empire. I do remember several years ago, that they wanted to sell off radio stations that were in markets under #30, though they wanted to keep stations that were under market #30, that have climbed in rankings market number wise. At the same time, they were selling off stations in markets where the market numbers were decreasing. So I see some stations up for sale, but not others, & I especially don't see them selling off stations in the top 10 markets. So for Chicago, say CBS did sell off their entire cluster to Cumulus, Cumulus would be forced to divest an FM station, because CBS already has 5 FM stations (5 is the most allowed in the same band, with 8 stations total). CBS has WXRT, WBBM-FM, WUSN, WJMK, & WCFS-FM (simulcasts WBBM-AM) on the FM, & WSCR & WBBM-AM on the AM side (both AM stations 50kw blowtorches). Cumulus only has WLS-AM & FM. I say that Cumulus may have a better chance at getting Merlin Media's WLUP & WIQI in Chicago than the CBS cluster
Ownership Limits
It's highly unlikely given the aforementioned investor issues, but CBS needs to be kicked back in line with their ownership limits in the New York City market, and I think that one of CBS's FM assets would be a great business opportunity for Cumulus Media (that or 99.5 WBAI). As mentioned, it's unlikely given investor confidence issues caused by fact that major market radio real estate is very high potential reward, but at the same time extremely high risk with an example of this being the infamous failure of Merlin Media's FM News 101.9 which would later lead to the presumably permanent downfall of the WRXP alt/modern rock format at the hands of CBS who have had the nerves to willingly defy FCC regulations and exceed their ownership limits to line their pockets and exploit the unrelenting FM simulcast and sports radio craze. To me, it looks like their acquisitions in "ultra major" markets are done for the foreseeable future. Such massive acquisitions are what put Clear Channel in the financial situation that they're in today.
It's highly unlikely given the aforementioned investor issues, but CBS needs to be kicked back in line with their ownership limits in the New York City market, and I think that one of CBS's FM assets would be a great business opportunity for Cumulus Media (that or 99.5 WBAI). As mentioned, it's unlikely given investor confidence issues caused by fact that major market radio real estate is very high potential reward, but at the same time extremely high risk with an example of this being the infamous failure of Merlin Media's FM News 101.9 which would later lead to the presumably permanent downfall of the WRXP alt/modern rock format at the hands of CBS who have had the nerves to willingly defy FCC regulations and exceed their ownership limits to line their pockets and exploit the unrelenting FM simulcast and sports radio craze. To me, it looks like their acquisitions in "ultra major" markets are done for the foreseeable future. Such massive acquisitions are what put Clear Channel in the financial situation that they're in today.
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which to me I always thought was a stupid move. Whatever happened to Mom and Pop stations? Now EVERYTHING has to be owned by a major heartless copr that keeps on buying and buying until it controls everything and gets too bloated.
The new rumor today is that Cumulus is looking at picking up Dial Global, per Tom Taylor.
For what it's worth, CBS never "defied" FCC regulations in NYC. There was no waiver. They're not in violation of any regulation. They showed that, per the FCC's own rules about contour overlap, they were in fact in the clear. You can disagree with the outcome, but they followed the letter of the law.
For what it's worth, CBS never "defied" FCC regulations in NYC. There was no waiver. They're not in violation of any regulation. They showed that, per the FCC's own rules about contour overlap, they were in fact in the clear. You can disagree with the outcome, but they followed the letter of the law.
What has happened to the world of radio?? People say that it is dying and frankly if it does it will be the corporate greed of these companies that make it happen!! So sad and such a loss for the rest of us, but the Dickeys and their ilk go on and make their millions while hard working people make nothing! What a mess!
A plausible scenario is that CBS keeps the spoken word formats that compliment their TV stations, but sell of their music outlets. For example, WBZ and WBZ-FM (The Sports Hub) could stay with WBZ-TV (ch 4) in Boston, while they sold off Mix, Amp and 'ZLX. All three are prime properties, but are likely sold with a different strategy than spoken word.
A better idea: CBS could keep radio stations in markets where it owns TV stations, but sell radio stations in markets where it doesn't own TV stations (St. Louis, Charlotte, Hartford, Las Vegas etc.)
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