CBS Corp. CEO Les Moonves says the company has received attractive bids for some of the 50 or so middle market radio stations it has up for sale, but he can’t predict when any deals will get done due to the tough financing markets. Moonves insisted that getting the right price for the radio assets is more important than timing. Meanwhile, radio revenues fell again in Q3. The company noted that it has been cutting costs in radio and outdoor, but that all five segments of CBS (TV, radio, outdoor, publishing & interactive) are contributing profits.
Radio revenues fell 12% to $392.5 million, a drop of 11% on a same stations basis. OIBDA dropped 18% to $139.4 million. The area of weakness, of course, is local advertising, affecting not only radio, but also the O&O TV group and outdoor at CBS Corp. “We’ve anticipated this slowdown for some time and have taken proactive measure by reducing capital and operating costs going back to last year. We will continue to right-size our businesses as we move forward as well,” Moonves said.
Like so many broadcasting companies, CBS had to reassess the value of its FCC licenses, goodwill and such and took a non-cash pre-tax impairment charge of $14.12 billion in Q3. Net earnings from continuing operations fell to a loss of $12.46 billion for the quarter, versus a positive number of $340.2 million a year ago.
Television division revenues rose 2% to $2.08 billion, but operating income before depreciation and amortization (OIBDA) fell 15% to $414 million.
Moonves said the pending radio divestitures are part of what he says is a strategic decision to move from slow-growth assets to fast-growth assets. With its recent purchase of CNET, CBS Corp. reported its interactive division on a separate line for the first time. Revenues were $140.7 million and produced OIBDA of $2.5 million.
With its stock price currently hovering around nine bucks, CBS Corp. is paying a hefty dividend of 12% to shareholders and some on Wall Street have questioned whether that can be sustained. Both Moonves and Chairman Sumner Redstone sought to reassure investors that the company plans to maintain its dividend, with Moonves calling it a “front and center” issue.