The rumors were true
Thanks to JerseyDevil for breaking the story while I was asleep having nightmares about ostriches looking in my windows.
The deal is structured as a tax free exchange called a Reverse Morris Trust. CBS shareholders will own about 3/4th of the combined company. Current CBS shareholders (which will still own the TV network) will have the option of selling the Entercom stock if they are willing to pay taxes on the gain.
Here is a longer term prediction. Some or all of Cumulus wil be merged into EntercomCBS. The FCC is very receptive to eliminating the ownership caps, which might allow Entercom to own more stations than they could today.
Howie Carr works for WRKO-AM in Boston, which is owned by Entercom. Howie has transformed the name into a verb – “I’ve been Entercommed”
An infusion of CBS people would greatly expand the competance of Entercom operations, while freeing CBS radio from the albatross of the Sumner Redstone 10:1 non proportional voting rights. This looks like a marriage made in heaven
Presumably, Entercom will own radio.com after the deal closes. They could hurt Tune In if they pulled the Entercom stations off it, as well as the CBS news and sports outlets, and put them all on radio.com, collecting the online ad revenue. Tune In already lacks the iHeart stations.
The bigger elephant in the room is the CBS radio news at the top of the hour – who will produce the news and who will distribute it? CBS News is still very dominant in the flyover country. Entercom has no experience in syndication.
This is just wild speculation, but I could see Westwood One moving to Entercom. The history of CBS radio and Westwood One are very much intertwined
so maybe more layoffs in the cbs newsrooms? they’re running on empty already. say it ain’t so.
I think CBS radio is somewhat dependent on CBS TV to provide its news. If the TV is split from the radio, I don’t know what happens .
In the case of ABC, Disney just retained ABC TV and sold off ABC radio, which primarily had been Paul Harvey and Top of the hour news. When citadel and then cumulus acquired ABC radio, they contracted with ABC TV to provide the news, I think the actual broadcast and distribution were done within Westwood one or Cumulus.
Because the Dickey brothers were not very bright, they totally abandoned the ABC radio News brand. They have no experience in syndication and news. It languished for a while and then they totally walked away from it, and gave it back to Disney. Internally within cumulus, stations switched to a generic newscast provided by CNN. Fox News Radio picked up most of the former ABC Radio News stations without spending a penny on marketing.
Really smart people look at numbers, etc
http://blog.biakelsey.com/index.php/2017/02/02/entercom-cbs-radio-what-does-it-mean/
Hold the presses! How does one hold a press and don’t your hands get inky?
Day of the announcement
CBS -0.71%
Entercom +10.95%
Cumulus +13.14%
Beasley +2.76%