April 21, 2017 at 3:40 pm #174088
Update for Entercom/CBS Radio
Entercom Communications received a request for additional information and documentary material from the Department of Justice on Wednesday. In a filing, the company said that the action, often referred to as a “second request,” is in connection with its previously announced merger with CBS Radio, entered into with Constitution Merger Sub Corp., a Delaware corporation and wholly owned unit of CBS Corp. Under the deal, Entercom is combining with CBS’s radio business in a two-step all stock “Reverse Morris Trust” transaction.
The second request was issued under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. CBS received an identical request for additional information and documentary material from the DOJ in connection with the transactionsApril 21, 2017 at 3:48 pm #174091
Could this deal still come undone??
I could see two possible reasons:
(1) Concerns about the merged CBS Radio/Entercom being “too big” and/or other delays to the completion of the merger. If the merger is delayed long enough, both sides may agree to (or one side may say to the other to) walk away.
(2) Or something outside CBS/Entercom may derail the merger: What if iHeart Media declares bankruptcy?? This Reuters article (http://www.reuters.com/article/us-iheartmedia-restructuring-idUSKBN17N2BX ) reports that several lenders are looking to block the radio giant’s debt restructuring plan, which could lead to a bankruptcy filing.
If iHeart (or even Cumulus) declares bankruptcy, the value of all radio stations will greatly plunge, and that too could “put a kibosh” on the planned CBS Radio/Entercom merger since the CBS Radio stations Entercom will acquire won’t nearly be as valuable as they are now and Entercom (barring renegotiations on how much they’ll pay CBS for it’s radio stations) would vastly overpay, given the falling value of radio stations as a whole that would most likely result from an iHeart or Cumulus bankruptcy.April 21, 2017 at 8:40 pm #174093
Jeff LehmannParticipantApril 21, 2017 at 9:01 pm #174094
I agree with Mike the Radio Guy. Barring some extraordinary event(s), this deal will close. Anticipate little more than a delay.
Speculation is that part of the reason for this DOJ request is the number of Boston sports teams Entercom would own the rights to if this deal happens. That’s been a concern to the DOJ before, and Entercom has been one of the parties that has dealt with it. I lived in Kansas City when Entercom bought Sinclair’s radio stations and tried to wrest The Chiefs’ radio rights from Sinclair. Entercom ultimately backed down and agreed to divest the rights to The Chiefs along with a few stations.
The DOJ might force Entercom to divest some stations it might have otherwise wanted to keep, but the deal will most likely get done.April 21, 2017 at 9:48 pm #174096
In fact, I expect that the Department of Justice will require Entercom to divest both of the WBZ stations, and possibly WZLX in order to proceed with this deal.
You expect….based on what?April 22, 2017 at 12:49 am #174101April 22, 2017 at 1:38 am #174105
Right, but they will still determine which stations Entercom will absolutely need to divest, while Entercom may elect to spin off one of their stations.
I don’t think they will be deciding “which stations Entercom will absolutely need to divest”.
They will either give the deal a yay or a nay depending on what Entercom proposes.April 22, 2017 at 8:18 am #174108
Admitted non-professional radio fan here, saying once again: I hope this merger doesn’t happen. But if it does, it will be interesting to see how it will affect the CBS Radio News affiliation in the Boston area. At present, WBZ carries the top-of-the-hour CBS newscasts at night; WCRN in Worcester (or “Worcester/Boston,” as it proclaims itself) carries them 24/7. WRKO is Boston’s local ABC affiliate. One wonders how all that may change, to say nothing of the much-ballyhooed competition between WEEI and WBZ-FM.WCRN no longer carries CBS news 24/7 since changing to Full Service Radio. In AM drive they have the TV simulcast of the news from Fox 25.And I’m not sure if they still carry it in the overnights during their classic hits/oldies music programming.April 22, 2017 at 10:33 am #174113
Uncle KaimbridgeParticipantWCRN no longer carries CBS news 24/7 since changing to Full Service Radio. In AM drive they have the TV simulcast of the news from Fox 25.And I’m not sure if they still carry it in the overnights during their classic hits/oldies music programming.
Thatʼs a negatory in the overnights, which surprises me, as (you point out) they now call themselves “Full Service Radio”.
**** Void Where Permitted;
Limit 0 Per Customer. ****April 24, 2017 at 2:26 pm #174146
Mike The Radio Guy commented:
I would like to see Entercom divest the WEEI rimshots in Worcester and Springfield, as well as 107.3 WAAF…
WVEI-1440 probably wouldn’t be considered a “Boston” station. And WWEI-105.5 in Springfield isn’t a “Boston” station either, so a merged CBS/Entercom could likely keep both stations.
WAAF-107.3 is the potential problem. Although licensed to Westboro, it has a strong signal in most of the Boston area. If the FCC rules it a “Boston” station, it would force CBS/Entercom to spin-off one more station than it would have to if the FCC rules ‘AAF as a “Worcester” station.April 25, 2017 at 8:49 pm #174182
This should be a new thread – but I think the CBS divesture is probably a factor. Joe Mathieu is leaving affective this upcoming Friday. Being younger, seemingly being active in pushing his career forward (based on his past of moving jobs) and he really has a lot to offer as an on air personality I figured if anyone would bail due to merger uncertainty it would be WBZ’s morning anchor of 6 years. Also he is another of the radio/TV cross pollination that CBS is throwing away since he does some political commentary on the TV side. Now maybe it is a coincidence but you have to figure this merger is at least a factor. Same with Diane Stern retiring last fall. I wonder who else will bail out or retire. Entercom/CBS Radio would be smart to put some retention bonuses in place for those who stick it out thru the first year or so of the merger – but of course they won’t.
BTW Joe and the team did an outstanding job of covering the Boston Marathon again this year. This is the type of stuff that is becoming rare for radio to put much energy into but I think these are important events to build the connection in the communities they serve.April 27, 2017 at 1:58 pm #174195
“Mathieu is leaving”
He’s leaving but says he’s staying in the area. Who in the market would pursue him (PBS stations?)April 27, 2017 at 3:03 pm #174197
A shame. “The beginning of sorrows,” I suspect, as far as the future of CBS Boston is concerned.April 27, 2017 at 6:27 pm #174199
“Joe Mathieu is leaving “
Joe says he’s remaining in the market. He didn’t say for how long?
Thinking about a next move for a news anchor isn’t easy (in Boston).April 27, 2017 at 9:28 pm #174202
Neg AtiveParticipantHave you been following Cumulus? We have an ongoing thread on my FB radio page following the stock, which was as low as TWENTY THREE CENTS a share this week, and that is after last years 8 to 1 reverse stock split last fall they had to do to get the stock over a dollar to keep being listed on NASDAQin simple terms, the share or CMLS you owned last September is now worth between 3 and 4 cents a share.if you think they are buying anything right now… it ain’t happening. It takes 2 shares of their stock to mail a letter.The race to bankruptcy has CMLS and IHRT neck in neck IMHO.ETM may be able to find a way on the basis of the number of stations allowed to be owned in a area to reach the max number, but once you go to other criteria like amount of ad dollar revenue they get in the area defined by the FCC , and that is 40% IIRC, they may find themselves having to own less stations in order to keep the max revenue allowed.As for Joe leaving CBS, I would speculate that he is at the end of a contract and CBS is not willing to pay him the money, or he sees the writing on the wall and is getting while the going is good. News radio is expensive to run, and there has never been a radio merger in recent memory where there has not been a blood bath before, during or right after the sale in order to come up with the cash to pay the debt.Speaking of that when are the layoffs starting at IHRT? When they admit in a Fed filing that they don’t know if they are going to be able to survive much longer, it gets you wondering when the heads are going to roll, not that there are many left after 10 years of Bain/Lee involvement.Is that why G Spin Gamere bolted from his various duties/on air shifts in several markets and went to work for a talent agency?Oh well, will the last person out the door make sure the tower lights are on.
I would like to see Entercom divest the WEEI rimshots in Worcester and Springfield, as well as 107.3 WAAF to Cumulus.
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