×
You will be redirected back to your article in seconds

CBS Sets Radio Division Merger With Entercom

CBS Corp. has unveiled plans to merge its radio division with Philadelphia-based Entercom Communications, creating a broadcast platform with 244 stations and national reach across major markets.

The surprise deal with Entercom means that CBS has scrapped plans for an IPO spinoff of its radio division, as it had been planning for months. The complex merger agreement that will leave CBS shareholders with 72% of the enlarged Entercom is said to have come together in the past few weeks. The deal marks CBS’ separation from the business that Eye founder William S. Paley used to launch the Columbia Broadcasting System in 1927.

“This agreement is great for shareholders and achieves our previously stated objectives by separating our radio business in the best possible way,” said Leslie Moonves, chairman and CEO of CBS. “Entercom is a superbly run company, and together with CBS Radio’s powerful brands and remarkable people, we are creating an organization that will be even better positioned to succeed in this rapidly evolving media landscape.”

CBS last February announced plans to divest its radio division, which had become a drag on earnings and was not a strong fit with its content-focused strategy. CBS shopped the division around to prospective suitors but eventually settled on plans to divest through a spinoff as a stand-alone public entity. The Entercom announcement caught observers by surprise on Thursday.

“This transformational transaction creates scale-driven efficiencies and opportunities to compete more effectively with other media to better serve our listeners and our advertisers,” said David J. Field, Entercom president and CEO. “The combination of a compelling strategic fit, an excellent balance sheet, and robust free cash flow generation, position us to create significant shareholder value for our investors.”

Field will remain CEO of the combined company. CBS Radio president and CEO Andre Fernandez is expected to exit after the deal closes, which CBS estimated would be in the second quarter.

The combined company will have post-merger revenue of $1.7 billion and cash flow of nearly $500 million. According to CBS, the deal is designed to be tax-free to CBS shareholders through a complex process known as a reverse Morris trust, which begins with an offer to existing CBS Corp. shareholders to exchange their stock for shares in CBS Radio, which will eventually become the enlarged Entercom.

The final price tag on the deal for CBS is unclear, but the Eye intends to use the proceeds to buy back CBS Corp. shares.

Entercom will rank as the nation’s second-largest radio firm behind iHeartMedia Inc. The company will have stations in 23 of the top 25 markets including CBS’ powerhouse news and sports outlets in New York, Los Angeles and Chicago. The sale also includes the CBS Sports Radio Network operation that has 300 station affiliates around the country.

Entercom was previously the fourth-largest radio station owner with 127 stations in 27 markets.

More Biz

  • Jussie SmollettFox Upfront Presentation, Arrivals, New

    Jussie Smollett Named a Suspect by Chicago Police for Filing False Report

    Chicago police have named “Empire” actor Jussie Smollett as a suspect in a criminal investigation, three weeks after he reported he was the victim of a hate crime. Detectives are presenting evidence to a grand jury, which is expected to determine whether to indict Smollett on a charge of filing a false police report. “Jussie [...]

  • Contract Placeholder Business

    WGA, Agents Face Tough Issues on New Franchise Pact (Column)

    The Writers Guild of America and the major talent agencies are seven weeks away from a deadline that could force film and TV writers to choose between their agents and their union. This is a battle that has been brewing for a year but few in the industry saw coming until a few weeks ago. [...]

  • Island Records Names Christine Kauffman Senior

    Island Records Names Christine Kauffman Senior VP of Brand Partnerships

    Veteran advertising executive Christine Kauffman has been named senior VP of brand partnerships at Island Records, the company announced today. She will be based in New York and report to Island COO Eric Wong. In making the announcement, Island President Darcus Beese said, “The fast-paced and competitive field of strategic brand marketing has become an [...]

  • Latin Music Veteran Nir Serioussi Joins

    Latin Music Veteran Nir Serioussi Joins Interscope as Executive VP

    Interscope Geffen A&M announced today that veteran executive, producer and songwriter Nir Seroussi will join the company as executive vice president. The announcement was made by Interscope Geffen A&M Chairman and CEO John Janick, to whom Serioussi will report. (Seroussi, center, is pictured above with Janick, left, and Interscope EVP Joie Manda.) According to the [...]

  • Tan FranceUnforgettable Gala, Inside, Los Angeles,

    'Queer Eye' Star Tan France to Host Audiobook Audie Awards

    “Queer Eye” resident style expert Tan France is taking on a slightly different project next month as he hosts the Audie Awards, which honors the best releases and achievements in audiobooks over the past 12 months. The ceremony, which takes place on March 4 in New York, is an annual event organized by the Audio [...]

  • Obit Obituary Placeholder

    Shelly Saltman, Former Fox Sports President and Promoter, Dies at 87

    Sheldon “Shelly” Saltman, the sports promoter behind the Billie Jean King vs. Bobby Riggs tennis match and Evel Knievel’s Snake River Canyon jump, died Saturday in Los Angeles. He was 87. The original president of Fox Sports, Saltman started his career as a sports announcer before moving to promotions at media companies like the Gillette Cavalcade [...]

  • Arista Records, Mogul Vision Launch Joint

    Arista Records, Mogul Vision Launch Joint Venture

    Arista Records and Smokepurpp/ Lil Mosey manager Josh Marshall today announced the launch of Mogul Vision Music, a new joint venture label focused on “breaking extraordinary talent and building artist careers through innovative A&R, branding and marketing strategy,” according to the announcement. Based in New York with Marshall (pictured above left, with Massey) as its CEO, the [...]

More From Our Brands

Access exclusive content