CBS Radio tells the Securities and Exchange Commission in its IPO filing the way it operates as a company would change after separating from CBS Corporation.
Under “risks,” the broadcaster states after the separation, CBS Radio may lose some benefits of its association with CBS corporation, especially with the television O&O’s “with which our radio stations share various services.”
Indeed, the company says in the filing CBS Corp. also provides the radio division with tax, cash management and employee benefits. It plans to reach agreement with CBS Corp. before the IPO on how all that would be handled during the IPO and before and after the separation.
The new entity would license “CBS Radio Inc.” as a company name and the brand “CBS Radio” for a while, but then intends to change the name.
Because CBS Radio has been a subsidiary of CBS Corporation, and the corporation has been responsible for a “significant” amount of the radio side’s overhead costs, including contract negotiations, management activities and technical support. The absence of that overhead support and economic scale could adversely impact the new CBS Radio’s financial condition, it tells the SEC, while noting it will have to develop the capabilities to conduct “at least some” of the activities.
After the separation, there would be nothing contractually preventing CBS Corporation from competing with the radio company. If that happens “we may be at a competitive disadvantage given the disparity in size and financial resources and diversity of operations at CBS (particularly CBS’s experience in television and video production and distribution),” since both give CBS an advantage in negotiating media contracts, attracting talent and selling advertising, it tells the SEC.