The future of CBS Radio?

[RadioStarOne]

Will Sumner Redstone sell his controlling interest in CBS Corp.? He just might have to do just that. Mr. Redstone has $800 million in debt coming due in less than a month on Dec. 19. (And I thought I owed a lot of money!) Will he save his multi-billion dollar empire? Will he hold off the creditors holding his $1.6 billion in bank debt that is backed by the family owned 1500 screen theater chain? Stay tuned for the next thrill packed episode in the amazing story of a man and his money! Happy Thanksgiving to all! May God Bless!

Don't cha all just miss Red Skelton? Sort of ironic to mention Red Skelton in a note about CBS. If you all know your history you know what I mean. Is the next chapter in the story of CBS about to begin? It won't be long before we all find out whats next. Somewhere someone is sweating bullets over this! How the mighty have fallen.

 

[RadioStarOne]

Am I and CNBC the only one's interested in what Mr. Redstone is going to be able to do with this problem? If he sells CBS everything changes. Is anyone watching this to see what he does? Amazing! Whats up with that? Are all the employee's of CBS so secure in they're jobs that it is not a worry?

 

[calstymes]

RadioStarOne did wonder aloud:

Am I and CNBC the only one's interested in what Mr. Redstone is going to be able to do with this problem? If he sells CBS everything changes. Is anyone watching this to see what he does? Amazing! Whats up with that? Are all the employee's of CBS so secure in they're jobs that it is not a worry?

Perhaps the better question may be: "Do the employees of CBS have any influence at all over what Mr. Redstone does with his CBS holdings?" I think not! So whether they worry or don't worry, in the grand scheme of things, I do not think it will make make any difference whatsoever.

 

[RadioStarOne]

Tick Tick Tick Tick....The nineteenth is coming!

 

[Gerryr]

Will Sumner Redstone sell his controlling interest in CBS Corp.? He just might have to do just that. Mr. Redstone has $800 million in debt coming due in less than a month on Dec. 19. (And I thought I owed a lot of money!) Will he save his multi-billion dollar empire? Will he hold off the creditors holding his $1.6 billion in bank debt that is backed by the family owned 1500 screen theater chain? Stay tuned for the next thrill packed episode in the amazing story of a man and his money! Happy Thanksgiving to all! May God Bless!

Don't cha all just miss Red Skelton? Sort of ironic to mention Red Skelton in a note about CBS. If you all know your history you know what I mean. Is the next chapter in the story of CBS about to begin? It won't be long before we all find out whats next. Somewhere someone is sweating bullets over this! How the mighty have fallen.

This was from the SF board on 11/26, right?

 

[TheBigA]

Sell? You must be joking. Who is going to buy?

 

[davideduardo]

Tick Tick Tick Tick....The nineteenth is coming!

The 19th does not affect CBS. It affects one of its shareholders, who has to make a payment on the debt of his theatre company. Whether Redstone sells his shares in CBS or not, CBS is a profitable, dividend paying company.

 

[davideduardo]

Sell? You must be joking. Who is going to buy?

Billions and billions are traded on the nation's stock exchanges every day. We are talking about the sale of shares of CBS, not CBS itself.

 

[EbolaMonkey]

Whether Redstone sells his shares in CBS or not, CBS is a profitable, dividend paying company.

Then YOU load up on CBS stock:
http://www.dividend.com/blog/?p=3104

 

[davideduardo]

Whether Redstone sells his shares in CBS or not, CBS is a profitable, dividend paying company.

Then YOU load up on CBS stock:
http://www.dividend.com/blog/?p=3104

The dividend is covered in the near future; the company is far from unprofitable. And the issue is that CBS is not being sold... although Redstone's shares may have to be sold due to Redstone's needs. That's not, strictly, CBS's problem, although a sale of a large block of shares would naturally affect the share price.

 

[Zeb Norris]

...a sale of a large block of shares would naturally affect the share price.

Which is currently in the toilet.

In 2002 it was $100 a share. Right now it's $7.65

 

[EbolaMonkey]

The dividend is covered in the near future; the company is far from unprofitable.

"Near future," indeed. Too near for their comfort. CBS is compared to the New York Times in my link. Not a welcome comparison based on the news of the last week.

Besides, it's the radio arm of CBS that's threatening to pull the thing underwater. The company might well survive. But it will probably have to get out of the radio business to do so. In five years, CBS might own a few stations in NYC and LA, but that's it. They'll want to keep the WCBS and KCBS call letters, in any case.

Since around 2002, CBS has done little other than lay off employees and sell off medium market stations to remain in the black. I don't know anyone who would envy that business model.

 

[videokilledtheradiostar]

The dividend is covered in the near future; the company is far from unprofitable.

"Near future," indeed. Too near for their comfort. CBS is compared to the New York Times in my link. Not a welcome comparison based on the news of the last week.

Besides, it's the radio arm of CBS that's threatening to pull the thing underwater. The company might well survive. But it will probably have to get out of the radio business to do so. In five years, CBS might own a few stations in NYC and LA, but that's it. They'll want to keep the WCBS and KCBS call letters, in any case.

Since around 2002, CBS has done little other than lay off employees and sell off medium market stations to remain in the black. I don't know anyone who would envy that business model.

Do you thiink they will eventually get rid of their CT. cluster?

 

[davideduardo]

Besides, it's the radio arm of CBS that's threatening to pull the thing underwater. The company might well survive. But it will probably have to get out of the radio business to do so. In five years, CBS might own a few stations in NYC and LA, but that's it. They'll want to keep the WCBS and KCBS call letters, in any case.

There is no ground for this: radio is profitable and cash flowing.

 

[wgliradio]

Besides, it's the radio arm of CBS that's threatening to pull the thing underwater. The company might well survive. But it will probably have to get out of the radio business to do so. In five years, CBS might own a few stations in NYC and LA, but that's it. They'll want to keep the WCBS and KCBS call letters, in any case.

There is no ground for this: radio is profitable and cash flowing.

Just not as much as they would like.... or else we wouldn't be seeing the hatchet jobs we have seen over the last 6-8 months.

Citadel: $0.22 ($20 in 2004)
Salem: $0.89 ($30 in April 2004)
Radio One: $0.21 ($19 in April 2004)
Regent: $0.10 ($50 range in February 2004)
Cumulus: $1.29 ($22 in April 2004)
Cox: $6.07 ($24 in January 2004)
Emmis: $0.41 ($26 in January 2004)
Saga: $1.80 ($19 in January 2004)
Westwood One: $0.05 (Delisted)
SBS: $0.09 ($12 in January 2004)
Entravision: $0.79 ($11 in January 2004, delisting notice)
CBS: $7.03 ($80 in January 2004)

Good times...

 

[TheBigA]

Just not as much as they would like.... or else we wouldn't be seeing the hatchet jobs we have seen over the last 6-8 months.

It would really help if people in radio actually spent some time to understand the business they're in.

Stock price isn't related to profits. Apple stock dropped 50% since the summer, and they have record profits every quarter. Same with Google.

The problem radio companies have now is debt. So they have to cut costs in order to qualify for refinancing. Any of you own homes? Go to a bank and talk to them about refinancing your house while you also have $100K in credit card debt. They won't give you a loan.

 

[EbolaMonkey]

There is no ground for this: radio is profitable and cash flowing.

This article from August says CBS's radio division is "a drag on earnings."
http://www.dividend.com/blog/?p=994

And things have continued to worsen since August.

In any case, radio has been the problem for CBS for years. This is nothing new.

 

[wgliradio]

Just not as much as they would like.... or else we wouldn't be seeing the hatchet jobs we have seen over the last 6-8 months.

It would really help if people in radio actually spent some time to understand the business they're in.

Stock price isn't related to profits.

Actually it is directly related to earnings and dividens. This can be said about most big corporations. You don't think the outlook for the industry, earnings forecasts and profits have driven these prices down?

And yes, debt is a huge issue... and credit is difficult. But investor confidence is a huge roleplayer. And when there are no investors???

As for Google and Apple.. do you think their fortunes would be the same if their stocks were under $10? $5?

 

[TheBigA]

Actually it is directly related to earnings and dividens.

It CAN be, but this current situation isn't. At least not in all cases.

You don't think the outlook for the industry, earnings forecasts and profits have driven these prices down?

Not in all cases, no. And who comes up with these outlooks? Investment companies, banks, and brokerage houses. Many of whom went out of business a few weeks ago. Obviously they weren't as smart as they thought.

But still consider the non-profit world, where donations to NPR have dropped during the past year. Why is that? Don't you think there's a connection between what's happening there and what's happening in the commercial world? I do.

But investor confidence is a huge roleplayer. And when there are no investors???

So what's your solution?

As for Google and Apple.. do you think their fortunes would be the same if their stocks were under $10? $5?

The point is that they've lost more than 50% of their value in just a few months. Apple was near $200, and now it can't crack $100. Google has no debt. They have lots of cash on hand. Apple has debt, but their cash on hand covers it. That's what radio needs now, and it will only come from sale of assets. And that's why they bought a lot of these stations in the first place...so they'd have assets to sell when times got bad.

 

[wgliradio]

My solution? Do what Clear Channel and Univision did.... get off the street. Stop swimming in forecasts. Clear Channel is much better off than most radio companies today because they want private.