So much for that initial public offering for CBS Radio.
In a 7 a.m. Eastern announcement, rumors became reality as CBS Corp. and Entercom Communications have agreed to a tax-free merger.
The transaction, which has a value that was not immediately disclosed, creates a radio-focused media company with 244 stations — and gives Entercom too many stations in Sacramento and the San Francisco-Oakland market, based on the current number of stations each company owns in these Northern California markets.
At the same time, it makes Entercom a predominant company in markets like Miami, where it is set to move into a much larger and more public space in a growing area of the city.
In prepared comments, CBS Corp. Chairman/CEO Les Moonves said the agreement “is great for shareholders and achieves our previously stated objectives by separating our radio business in the best possible way.”
He called Entercom “a superbly run company, and together with CBS Radio’s powerful brands and remarkable people, we are creating an organization that will be even better positioned to succeed in this rapidly evolving media landscape.”
FIELD TO LEAD COMBINED OPERATION
David J. Field, President of Entercom since 1998 and now also its CEO, will lead the combine company.
Field said in prepared comments, “These two great companies, with their impressive histories, complementary assets, and premier content and brands, are a perfect strategic and cultural fit, enabling us to deliver local connection on a national scale and drive accelerated growth. We look forward to welcoming our talented new colleagues at CBS Radio, and we have the utmost respect for their significant contributions to the industry.”
He plugged radio’s reach, and how AM and FM stations and their digital capabilities “offer advertisers outstanding ROI and local activation” by adding, “This transformational transaction creates scale-driven efficiencies and opportunities to compete more effectively with other media to better serve our listeners and our advertisers. The combination of a compelling strategic fit, an excellent balance sheet, and robust free cash flow generation, position us to create significant shareholder value for our investors.”
ANDRE FERNANDEZ TO STEP ASIDE
With the merger of CBS Radio and Entercom, current CBS Radio President/CEO Andre Fernandez will exit his role upon the transaction’s closing.
He said, “I couldn’t be more proud of the CBS Radio team and all of the exciting breaking news, live events, and business initiatives happening every day across the country. Today marks the beginning of a new chapter for us as we join with an organization with an equally deep tradition in radio broadcasting. The opportunities for the new company are enormous – thanks to our combined collection of industry-leading stations and brands.”