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Now that CBS CORP. has released preliminary financial information related to its intention to spin off or sell its radio business, it’s worth taking a look at the unit’s performance vs. that of its major radio peers: iHeartMedia, Cumulus Media, Townsquare Media, and Alpha Media.

CBS is fifth on the list in terms of number of radio stations owned, with 117 as of the end of 2015. At the top is iHM, with 861; followed by Cumulus, 454; Townsquare, 309; and Alpha, 136 (the latter has grown to 250 following an acquisition that closed earlier this year).

But when you look at 2015 revenue, the field is different. While iHM is the giant in this category, too, with well over twice the revenue of any of its peers, CBS ranks second, just ahead of Cumulus and with twice as much as Townsquare. (The privately held Alpha doesn’t report financials.)

Although Cumulus and Townsquare own more stations than CBS Radio, it ranks second in terms of revenue. sources: Company Reporting, jackdaw research Analysis

CBS Radio also scores fairly well with operating margins, although they’ve been declining for the past two years (even excluding the effects of a recent impairment to its asset valuations relating to FCC licenses). Radio is a tough business, as it continues to suffer in the face of competition from TV and online options. Ramping down costs in proportion to revenue is challenging; hence the squeeze on margins.

Though iHM might seem like the sector’s most attractive business, it is saddled with enormous debt. (This is a recurring theme among this set of companies: Both iHM and Cumulus have total debt of more than twice their annual revenue; Townsquare’s is at a more manageable 1.4 times revenue.) CBS Radio, on the other hand, has zero debt pre-spinoff (none of the CBS corporate debt is allocated to the radio unit). However, it will take on an as-yet-unspecified amount of debt before a spinoff, which will change the equation.

Although Cumulus and Townsquare own more stations than CBS Radio, it ranks second in terms of revenue.
sources: Company Reporting, jackdaw research Analysis

If CBS follows the pattern it established with its Outdoor spinoff a few years ago, it’s likely that CBS Radio will end up with a fairly heavy debt load, potentially around the same debt-to-revenue ratio as Townsquare. That still wouldn’t be as overwhelming a load as iHeartMedia is struggling with, but it would reduce the attractiveness of a subsequent acquisition.

Judging by commentary on its recent earnings call, CBS is still open to a sale of the unit, and appears to prefer that outcome to a spinoff. It’s a rare opportunity for a buyer to get one of the biggest U.S. radio businesses in one fell swoop. But the lack of activity since the filing in early July suggests that buyers aren’t coming forward — at least not at the right price — and the obvious bidders have their own heavy debt loads to consider. A spinoff is starting to look like the most likely outcome after all.

Jan Dawson is founder and chief analyst at Jackdaw Research, an advisory firm for the consumer technology market.