Examining The CBS/Entercom Market Overlaps

CBS Radio Entercom Merger David FieldIn one fell swoop Entercom reshaped the radio industry with its merger with CBS Radio.

While CBS stockholders will own the 72% of the newly combined Entercom’s shares, it is the smaller company that is essentially acquiring its much larger rival as Entercom’s senior management will remain in place and control the Board of Directors. The new Entercom will hold 244 stations across 47 markets including all of the top 25 with the exception of Puerto Rico and Tampa.

CBS and Entercom have very little overlap considering the size of the two companies. Of the 47 markets, the two only both operate in eight and potentially have to divest stations in six of them. On the call with investors this morning, CEO David Field stated that he expects at at most fifteen stations to need to be divested and that “swaps are the more likely outcome” as opposed to selling off the stations.

Let’s look at the eight markets where both companies operate:

Atlanta & Miami

Both company assets should be able to be consolidated in both of these markets. CBS owns 2 FMs and 1 AM in Atlanta, while Entercom has 1 FM. In Miami, CBS’ 1 AM and 2 FMs should fit within the ownership cap with 1 AM and 3FMs now that CBS’ two television stations will not be a consideration. The only potential content conflict will be that both groups operate Sports Talk stations in Miami: CBS with 560 WQAM and Entercom with “790 The Ticket” WAXY.

Boston

This will be one of the most interesting market to watch. CBS brings 1 AM and 4 FMs, while Entercom has 2 AMs and 3 FMs. However both groups have strong FM Sports Talkers with Entercom’s 93.7 WEEI-FM and CBS’ “98.5 The Sports Hub” WBZ-FM. Unless Entercom finds a way to have Rock 107.3 WAAF count as a Worcester market station, they will need to divest two FMs in Boston. The DOJ may even force an additional spin-off if it sees a high revenue concentration.

Los Angeles

The simple spin-off here will be Entercom Classic Rock “100.3 The Sound” KSWD as CBS is maxed out on FMs and 1 AM. A swap built around KSWD to Cumulus for CHR 104.1 KRBE Houston would be beneficial to both companies and allow Cumulus to remove competition for 95.5 KLOS.

Sacramento

One of two markets where both groups have full clusters. CBS brings 1 AM and 4 FMs, while Entercom currently owns 1 AM and 5 FMs pending the resolution of the license challenge against CHR “107.9 The End” KDND. In all likelihood one of the clusters will be spun-off as is leaving the status quo.

San Diego

The combined groups will own six FMs, but the easy divestiture will be 92.1 KSOQ Escondido which rebroadcasts Country 97.3 KSON to the northern portions of the market. The format overlap between AC 96.5 KYXY and “Sunny 98.1” KXSN will likely be resolved in some form as well.

San Francisco/San Jose

The other market where both groups are nearly maxed out, Entercom will need to divest at least four FMs as Entercom will have 9 total. Between the two companies there isn’t much in the way of format overlap to resolve, but a new entrant to the market could lead to a shake-up.

Seattle

With CBS bringing in 1 AM and 3 FMs and Entercom possessing 4 FMs, at least two will need to be divested. Depending on the buyer of the spun-off stations the only format overlap consists of Country where CBS brings 94.1 KMPS to Entercom’s “100.7 The Wolf” KKWF.

Two stations in Boston, one in Los Angeles, one in San Diego, five in Sacramento, four in San Francisco, and two in Seattle brings us to the fifteen station number that Field mentioned this morning and points to spinning off CBS’ Sacramento cluster as-is. The reverberations of how those stations are spun will dictate changes throughout the remainder of 2017.

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Lance Venta is the Owner and Publisher of RadioInsight.com and a consultant for RadioBB Networks specializing in integration of radio and the internet. Lance has two decades of experience tracking the audio industry and its use of digital platforms.

43 Comments


  1. I suspect that here in Boston, either all of Entercom’s six stations (including Worcester) or all of CBS Radio’s five stations will have to get spun-off.

    However, I could see the merged company sell-off one of it’s two FM all-sports stations (either WEEI-93.7 or WBZ-98.5), but that station would be sold-off without any pro play-by-play rights (meaning the all-sports station the combined CBS/Entercom keeps would have all of Boston’s pro teams—-Red Sox baseball, Patriots football, Bruins hockey, Celtics basketball, and Revolution soccer).

    I don’t think anyone saw this coming.


    • I think E-com will take a couple of CBS’ (probably ZLX and Mix), while Hubbard will take the rest. EEI needs competition, and BZ-FM is beating them. Or EEI could could go to Hubbard, while taking the rest with them. I can’t see a piecemeal type offering.


    • Entercom should be able to mix-and-match a little bit in Boston. I actually expect it will keep both sports stations since they bill a fortune.

      Of course, some of the stations Entercom keeps will likely be determined by the buyer. Entercom has indicated it wants to swap as many stations as it can, and nobody is going to swap profitable stations and/or clusters for just WKAF and WAAF.


      • Plus, WKAF just started their new format. Can’t see E-com giving it up that easily.


        • Sure they can. It’s the weakest FM in the whole cluster. No way they’ll keep it.

          My guess, and it’s only a guess, is that Entercom split up 107.3 and 97.7’s formats because either:

          A: They expect 107.3 will be ruled a Worcester signal, and thus they’ll be allowed to keep it. But not 97.7 so they’re splitting them up in preparation for WAAF’s audience to only hear it on 107.3 going forward.

          Or…

          B: They expect that 107.3 and 97.7 will bill more money separately with different formats than they would bill as a simulcast. Since commercial license sale prices are usually a factor of how much a station bills, that could potentially make sense. It’s just a guess, though. I have no idea how well WAAF/WKAF actually bills.


  2. Great analysis.

    Lots of fun speculation ahead about San Francisco, Boston, and Seattle. I’m not sure there are obvious suitors for the spin offs. I would imagine EMF would be interested in Boston if they are sold individually.

    Surprised that Cumulus is still sitting on KRBE and hasn’t made a trade already. If they did work out an arrangement that involved KSWD going to Cumulus, I wonder what else Cumulus would need to offer besides KRBE. Off the top of my head, I would guess KSWD is worth 2.5-3X more.

    Maybe KRBE + the entire Nashville cluster.


    • Didn’t think about EMF, and I think Boston is one of the largest markets (maybe the largest market?) where their “K-Love” Contemporary Christian format isn’t currently on the air.

      But “K-Love” is a 24/7 birdfeed format, and I’d prefer that anyone buying stations spun-off by this merger, whoever it is and wherever they are, will do a lot of local programming.


      • EMF typically prefers non-comm signals because they can get Main Studio waivers.

        If they get a commercial station, they’ll have to sustain the Main Studio (and associated staff requirements) in town. That costs money they prefer not to spend. But admittedly, if that’s all that’s between them and a deal? That alone won’t stop the deal.


    • Nashville is a stretch.
      I do think a KSWD-KRBE trade will happen. It makes perfect sense.
      And K-Love will not take one of those stations away. I see them taking a non-com before a full-powered commercial signal, particularly in a large market like Boston.


      • On the other hand, taking a commercial station off the board in an uncertain (to put it mildly) revenue situation for radio might interest Entercom. Whether it would interest DOJ is another matter altogether…


    • I don’t see KRBE + Nashville for KSWD (probably KSWD’s intellectual property and KROQ’s stick) happening either. Usually, the values of the stations swapped is determined by cash flow, and I doubt KSWD bills 2.5-3 times what KRBE does, though I suspect it bills more.

      Although Cumulus doesn’t seem likely to use cash to make up the difference, it could do something more creative. It could, for example, send a station in Indy to Entercom, where each has a station and neither is maxed out. Another possibility would be to swap a full-signaled property for a weaker signal in a market where both have stations (like Memphis, where Entercom has a mediocre signal in 92.9 while Cumulus has a few full-power sticks). Cumulus and Entercom also have stations in Kansas City, and Cumulus has a couple of translators there that it could send to Entercom to help make up the difference. Cumulus also has the Chiefs’ football network, and Entercom has long coveted that (though the DOJ stopped them from taking it in 2000).


  3. The CBS Sacramento cluster of KYMX, KZZO, KSFM and KNCI looks like they’re ready to put up the “For Sale” sign, but will keep KHTK with them since they’re the flagship station of the NBA Kings. Plus the stations have healthy Nielsen ratings. I would like to see Alpha or Beasley emerge as a buyer.


    • I could see either Alpha or Hubbard taking Sacramento.


      • And Bonneville to take San Fran.


      • Or perhaps Lotus.


        • Lotus won’t do that. They’re a medium sized market operator and only owns a bunch of sleepy AMs in large markets. No, not going to happen.


          • I wonder how their maxed-out cluster in market 31 feels knowing they’re just a medium market.


          • If you’re between #20 and #60ish, you’re considered a medium sized market. Vegas fits that, as it is ranked #31. I don’t see them ever being a major player. Unless they’re sitting on a top of capital that we don’t know about.


          • It doesn’t necessarily mean that they shouldn’t acquire those spinoffs.


  4. Kind of interesting to see this in SanFrancisco radio market but most likely there will be an ownership change with one of these on the FM:
    Entercom owns KGMZ 95.7 and KOIT 96.5
    CBS Radio owns KLLC 97.3

    CBS radio KMVQ 99.7 should be safe but with Entercoms KRBQ 102.1 and KBLX 102.9 along with CBS radio KITS 105.3 and KFRC (kcbs am 740 simulcast) is a “buster cluster” format/ownership changes waiting to happen…


    • Entercom should be able to take whatever it wants in San Francisco. There shouldn’t be any DOJ concerns there. So, its only concerns will be what does best there and what its buyer(s) offer(s).

      While Bonneville certainly seems like a potential buyer, I’m not sure it’s a given that will happen. I expect Bonneville or Hubbard will end up swapping out of Phoenix for some of the spinoffs. I also wouldn’t be surprised to see Hubbard swap out of St. Louis.


  5. KCBS AM 740 (all news) should be safe but look for possible format change at KZDG AM 1550 (bollywood music)…might be a move where Entercom can simulcast its Sports 95.7 into the AM dial…


    • KZDG is operated via a TBA through CBS. I think Bonneville will let that continue. There’s no point in adding a KGMZ simulcast on AM.


  6. Actually it may benefit having an AM signal for KGMZ simulcast cause there are some (especially in South Bay) where concerns from FM listeners don’t get a chance to hear A’s, Raiders and Warriors games…also it would eliminate some of the scheduling conflicts when they would be sent it to 102.9


  7. I can see Bonneville entering back again in this market especially ever since they sold KOIT to Entercom and maybe they could reacquire it back from them…


  8. I think Alpha will get the San Francisco stations, why would Bonneville go back in to SF?


    • Alpha could barely get financing to do the Digity deal. The only way they become a player is through a trade, and they’d have to give up pretty much all of their markets worth having (except Portland) to do it. Possible, but pretty unlikely.

      Bonneville, given their history in SF, makes sense. You’ll recall they got rid of Seattle and then bought right back in again. I believe they did the same in Phoenix. It wouldn’t be out of character for them to do SF.


    • I don’t see any way Alpha gets much out of this deal. Not sure if West Palm Beach is an embedded market within Miami/Ft. Lauderdale, but, if it’s not, Alpha might be able to swap out of there for, say, Sacramento, but even that seems pretty remote. Even on its own, Ft. Lauderdale is quite-a-bit smaller than Sacto.

      As for Bonneville, it has a ton of cash and could buy back into San Francisco if it wanted to do so. As I’ve said before, I personally think it will swap its Phoenix stations to Entercom for a few stations in Seattle to round out its cluster there. On paper, a swap like that works almost perfectly. Bonneville swapping for SF seems a bit tougher to muster, but it might be possible if Bonneville was willing to settle for a few low-rated stations and signal-challenged facilities.


      • FWIW, the WPB metro isn’t embedded; despite the concentrated population all along the coast, I don’t think you could ever put all three counties within one market. And, even though Entercom probably wouldn’t mind picking up Alpha’s outlets in WPB (or, for that matter, San Antonio, as Entercom has a cluster in Austin), I still don’t see Alpha as a real factor in any swapping here.


    • Not likely, because Alpha already owns 5 FMs in San Francisco. which they acquired from Coast Radio Group and Digity. Therefore, they can’t own anymore FM stations in the Bay Area.


  9. Fanboys play musical chairs without thinking. Consolidators don’t play musical chairs unless they have a plan in place.
    Entercom to keep both The Sports Hub and WEEI? Not if the Justice Department finds an excessive concentration of revenue in the overall Boston market. Beasley had to spin off the Greater Media cluster in Charlotte for that very reason.
    Entercom to keep CBS’s AM station in Sacramento? Makes no sense at all. There’s also the not-so-trivial matter of that license revocation hearing.
    An AM simulcast for 95.7 The Game in San Fran? A non-starter given the current state of the AM band. Besides, Entercom has set up a regional network for the Golden State Warriors with KRTY as the San Jose outlet.
    As for the other fanboy favorites? Hubbard has had layoffs in recent months due to revenue shortfalls. Bonneville International has been scaling back, not expanding.


    • Yeah, there’s no way the Hub and EEI will be under the same roof. No way. Too much market revenue wrapped up in one company? And one owner having the rights to Every pro team in the market? DOJ won’t allow it.
      However, Entercom has been expanding their sports rights like crazy, so if there’s profit to be had with the Kings, they’ll take it.
      And yes, I’m well aware that Bonneville has been scaling back. However, if they truly wanted to scale back, they wouldn’t have even agreed to get their Denver stations. The West Coast is their home turf, and there’s room to expand. They have money.
      As for Hubbard, yeah, layoffs are likely. However, if you strike them out, who else is left? iHeart or Cumulus won’t jump at the chance, and Beasley is now trying to pay off the debt with Greater.


      • You guys do realize this is the *Trump* DOJ now, right? I’ll bet there’s a reason this deal wasn’t consummated and announced until after Jan.20, 2017. I don’t believe for one second that they’ll interfere with any amount of “too much market revenue” consolidation.

        I say that if Entercom can demonstrate 107.3 is a Worcester station, then all that gets spun off is 97.7 and 850AM. If they can’t, probably 107.3 gets spun off or maybe 93.7. Probably 107.3, since despite 93.7’s well-known problems reaching the South Shore, it’s still far more of a Boston signal than 107.3 is, and as iHeart demonstrated with 101.7, the signal in the Top 10 market is all that matters.

        As for the others? 97.7 is the only Class A FM in the cluster now, and it’s not all that good a Class A FM, either. Theoretically it could bill better than 93.7 or 107.3 but I highly doubt it. It’s damn hard to sell a sponsor (never mind a listener) on any signal that doesn’t cover the whole market. I don’t see any way they’d keep it over one of the other Class B’s.

        And while 850AM nor 680AM are roughly equivalent signal-wise, and both have significant issues with their nighttime signals and both face declining AM Radio viability in general (and neither really benefits much from getting an FM translator, if such a thing were possible), I imagine that since WRKO/680 has better ratings at the moment (WEEI 850 is in the toilet) that 850 will be the one to get spun off.

        One interesting thought experiment: lets say Entercom decides they’d really like to keep both 107.3 and 93.7FM. But the market cap says “no, no, no – 107.3 is a Boston station now”. Would they reverse all that effort they put into moving 107.3 to “Westborough” and try to explicitly make it a Worcester signal again? It’ll be hard to change the COL of that license, though. Damn hard. IIRC there’s no other facility licensed to “Westborough” so something else would have to be moved there. Theoretically possible, but a lot of work to be done. Proooooobably too much effort to justify the lower billing a non-Top-10-market signal gets. But that’s just a WAG.


        • Speaking of which, I would expect that the WEEI sports format on 93.7 will be moved to one of three non-sports CBS Radio FM’s: 104.1, 100.7 or 103.3FM. At a guess, I’d say 103.3 only because the other two are on the Prudential, whereas 103.3 is out at Newton/Needham. 98.5 is also out at Newton/Needham, and the greater height and more market-centralized location of those towers has served 98.5 well. I could see them wanting to put WEEI on equal footing.

          OTOH, in general classic rock is a tough sell these days. Probably only going to get tougher. Maybe it makes more sense to stick with “AMP” on 103.3 and kill off WZLX’s classic rock on 100.7? Hell if I know…

          One way or another, there’s no chance WEEI’s sports format remains on 93.7FM. Either some miracle of governmental intervention happens and Entercom is forced to spin off the format to someone else, and as mentioned elsewhere, I don’t see 93.7 being one of the spun-off FM’s…..OR Entercom gets to keep both sports formats (I think this is more likely) and they’ll want to put it on a much better signal that covers the whole market; 93.7 doesn’t really do that.


          • Hang on, it’ll be a bumpy ride!


          • Yesterday morning, Kirk & Callahan on WEEI-FM openly said, on the air, that 98.5 The Sports Hub would be gone within 6 months. The WEEI morning team cited a meeting with Entercom Boston management.
            WEEI’s website has the audio clip under “The big merger”.


          • They could also be joking around. Honestly, we won’t know for at least the next few months.


          • Of course, if upper management says anything, it MUST be gospel.


        • Wait, I’m not sure where I got it in my head that an AM needed to be spun off in Boston. That’s not the case, is it?


  10. With KDND out of the way in Sacramento, how does this change the prognostications?


    • Not much. Entercom will likely just add KYMX or KNCI to replace KDND. Of course, they could opt for keeping one of the lower rated CBS FM’s or just stay one FM under the cap if the buyer offers the right deal.


      • Entercom will only have to divest 3 FM stations, which would allow them to take one of CBS’ FM stations and spinning off the rest. I was thinking Lotus could acquire those stations, given that they have 1 AM and FM station each in Sacramento.


        • Nope. It would make more sense if Alpha or Hubbard buy out the Sactown cluster.

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