It’s official – CBS to spin off Radio

https://www.thestreet.com/story/13630779/1/cbs-stock-up-radio-division-ipo-planned.html

Showing lack of historical context, this articles says that the radio stations have been part of the company since the beginning. Well, that’s sort of true. The radio stations were CBS. CBS TV didn’t arrive until after World War Two ended.

CBS Radio history (2009)

CBS was originally the Columbia Phonograph Company, which shows how wrong the notion is that record companies wouldn’t exist without radio. The competing NBC was built on top of the Victrola Record Company. William Paley was a cigar company salesman in Philadelphia who smelled the opportunity to compete against the NBC radio monopoly, so he bought the company.

I am not recommending this IPO. Here are some things to consider…

– how much of the CBS radio “revenue” is from other related companies (CBS TV, Viacom)
– who will own and operate CBS radio news? CBS radio news uses the TV division’s people
– how many shared TV/Radio facilities are there – will CBS radio lease space?
– will Sumner Redstone have a non proportional ownership or no ownership?
– how much debt will be loaded onto the new company?

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4 Responses to It’s official – CBS to spin off Radio

  1. Fred Stiening says:

    In my fantasy world, I would like to see the new CBS Radio run by Mel Karmazin, who took over control of CBS during the consolidation era when CBS merged with Westinghouse and Infinity – then was pushed out and went on to run Sirius Satellite Radio. His track record at Infinity Broadcasting shows he can turn stations around and kick the ass of lethargic radio owners, which is part of why they hate his guts. John Malone fairly recently squeezed Mel out at SiriusXM

  2. briand75 says:

    I wonder if one can apply a reality check to this IPO? Reality dictates that radio is changing (dying?) and this would seem a risky investment at best given the overwhelming presence of technology solutions and applications that deal with music and news. I have heard that a very large percent of millennials get their news from Facebook and twitter. Disregard the fact that some percent is pure nonsense, this doesn’t leave much room for classic radio. The article says buy – with a “B” rating. I say hold – with a “BS” rating.

    • Fred Stiening says:

      They gave up trying to find a buyer. IHeart and Cumulus are broke and can’t add more stations in major markets due to ownership caps.

      I’ve always thought that AT&T was a possibility, more for the towers and real estate. AT&T agreed in the 1920s to bail out of radio to settle the patent disputes with RCA and GE in exchange for a lucrative contract to put the NBC networks on their national coax network. It would not shock me if their is still a consent decree or contract that blocks AT&T in perpetuity from broadcast radio

      • CC1s121LrBGT says:

        I’m not sure that that AT&T exists any more. 30 some years ago, the US government split off many separate publicly traded companies from AT&T. Over time, one of those new companies morphed into Southwestern Bell.

        Eventually Southwestern Bell took over AT&T and merged it into Southwestern Bell and its corporate structure and TaxID. Southwestern Bell then, for branding purposes, renamed itself as at&t (changing the logo from upper case letters to lower case letters).

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