Tags: CBS | radio | Moonves | broadcasting

CBS CEO: Broadcaster Reviewing Possible Sale of Radio Unit

CBS CEO: Broadcaster Reviewing Possible Sale of Radio Unit

Tuesday, 15 March 2016 05:20 PM

CBS Corp., owner of the most-watched U.S. TV network, is putting a for-sale sign on its radio division, a group of stations that dates back to the inception of Columbia Broadcasting System in 1927.

Chief Executive Officer Leslie Moonves told investors Tuesday in a presentation the company will explore strategic options for the division as part of plans to “hone” its asset portfolio. All options are on the table, including a spinoff, split and sale, the company said.

Radio is a shrinking business, with advertising revenue falling and the company writing down the value of its station licenses last year. CBS’s local broadcasting division, which includes radio and TV outlets, reported sales of $2.6 billion in 2015, the lowest since 2009. CBS and Showtime are the company’s two premium brands, Moonves said.

CBS Radio operates 117 radio stations in 26 U.S. markets, including WFAN in New York, according to regulatory filings. IHeart Media Inc. is the largest radio company with 861 outlets.

CBS’s goal is to “unlock value for our shareholders” as the company did in 2014 when it spun off its outdoor advertising division, now called Outfront Media Inc., according to Moonves.

Possible Buyers

Cumulus Media Inc. could be a potential buyer, the Wall Street Journal reported on Tuesday, citing a statement from that company’s CEO Mary Berner. Cumulus, based in Atlanta, didn’t respond to a request for comment.

CBS, based in New York, operates the namesake broadcast TV network, local television and radio stations, the Showtime cable outlet and Simon & Schuster publishing.

While unloading some assets, the company said it will increase sales by $3.75 billion through higher retransmission fees, selling CBS All Access and Showtime over the Internet, and licensing TV programs for broadcast outside the U.S. All Access and Showtime will surpass 4 million subscribers apiece by 2020, Chief Operating Officer Joe Ianniello projected.

The growth of streaming has bewitched conventional radio. Half of U.S. residents over the age of 12 listen to online radio every week, more than double the percentage in 2011, according to a recent study by Edison Research.

Online radio companies like Pandora Media Inc. are eating into the advertising sales of terrestrial radio. Overall radio advertising sales haven’t grown since 2011.

Shares of CBS fell 1.3 percent to $52.59 at the close in New York. The stock has gained 12 percent this year.

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CBS Corp., owner of the most-watched U.S. TV network, is putting a for-sale sign on its radio division.
CBS, radio, Moonves, broadcasting
Tuesday, 15 March 2016 05:20 PM
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