Legendary air personality Scott Shannon did his first “weekend blast-off” just after 8am Eastern on WCBS-FM 101.1 in New York by identifying the venerable Classic Hits’ station’s new owner.
Investors on Wall Street geared up for a strong opening for the company’s shares on Wall Street.
And, just before the Opening Bell for the New York Stock Exchange on Friday, the long-anticipated official word came from Bala Cynwyd, Pa., along with a newly designed corporate logo.
CBS Radio, formally created 20 years ago with Westinghouse’s acquisition of Infinity Broadcasting, is no more. It’s now a part of the Entercom Communications family.
With the merger complete, Entercom says it has created “one of the top two radio broadcasters in the country.”
That, of course, won’t make Cumulus Media happy. Cumulus is the No. 2 radio broadcasting company by number of stations, behind industry leader iHeartMedia.
Furthermore, Entercom boasts that it is now the No. 1 creator of live, original, local audio content in the U.S. and “the nation’s unrivaled leader in news and sports radio.”
That statement will likely go unchallenged, as Entercom is now the parent of New York’s WINS-AM 1010 and WCBS-AM 880, each of which have a heavy news presence in the Tri-State Area. Then, there is WBBM-AM 780 in Chicago; KYW-AM 1060 in Philadelphia; WWJ-AM 950 in Detroit; KMOX-AM 1120 in St. Louis; KNX-AM 1070 in Los Angeles; and KCBS-AM 740 and FM 106.9 in San Francisco — all heritage stations with a heavy news and information presence in their respective markets.
“We are thrilled to officially close our transformational merger with CBS Radio and welcome their talented employees and iconic brands to Entercom,” said Entercom President/CEO David Field. “We look forward to capitalizing on our unique positions in sports, news, music, podcasting, live events, digital and more to provide outstanding experiences for our listeners and compelling integrated marketing opportunities for our advertisers.”
He added that Entercom now has “the scale and capabilities to drive meaningful growth and to compete more effectively with other media for a larger share of advertising dollars.”
Entercom, Field added, also looks forward “to helping to elevate the Radio industry, which remains massively undervalued by advertisers despite having emerged as America’s No. 1 reach medium, delivering outstanding ROI to customers.”
That’s just a glimpse into the man who has helped build Entercom into the nation’s No. 3 owner of radio stations by station count in some two decades at the company founded by his father, Joseph Field, some 50 years ago.
With the Opening Bell, Entercom shares climbed as high as 3% before immediately cooling off. As of 10:06am Eastern, ETM was up 0.9% to $11.27.
As the Closing Bell, Entercom stock was up 2.4%, to $11.45.
To avoid a massive tax bill, CBS Radio was merged with an Entercom subsidiary through a “Reverse Morris Trust” transaction. Today’s closing effectively followed an exchange offer that sees participating CBS stockholders receiving one share of Entercom Class A common stock in exchange for each whole share of CBS Radio common stock they received in the exchange offer.
The transactions enable CBS Corp. to retire approximately 17.9 million shares of CBS Class B common stock.
Why CBS Corp. shed its radio stations was made loud and clear by Chairman/CEO Les Moonves.
“The separation of our radio business is part of a broader strategy to make CBS even more focused on our content and all the ways we can monetize it,” said Moonves. “We started on this path several years ago with the split-off of our outdoor advertising business. And just as we did with outdoor, we believe our radio transaction will allow us to unlock more value for our shareholders and further grow our revenue. As a result, we think CBS will be even better positioned to take advantage of all the new growth opportunities before us, and we feel very good about our future as a pure content Company.”