By Adam R Jacobson
RBR + TVBR
BIA/Kelsey SVP and Chief Economist Mark Fratrik — like many industry observers — expected an Initial Public Offering for CBS Radio — not a tax-free merger with another radio broadcast company.
Now, in light of yesterday’s blockbuster announcement, “the dynamics are quite different,” Fratrik notes.
What has emerged — assuming the deal is approved — is a stronger radio industry, he says.
“The combined Entercom-CBS Radio group would be closer to the size of the industry leader – iHeart Media – which only can foster the radio industry’s ability to compete against its many new competitors,” Fratrik says.
The new Entercom will remain headquartered in Philadelphia. But, it will have a “significant ongoing presence in New York,” as Entercom’s Board of Directors will be comprised of the five current Entercom directors and four directors to be nominated by CBS Radio.
Post-merger Entercom will also see the divestment of 15 radio stations, as it will find itself over the limit in six markets.
What’s the next step for these newly maxed-out market clusters?