At long last, Westwood One announced yesterday evening that it has entered into new agreements with CBS Radio running through March 2017. Westwood One’s Management Agreement, Representation Agreement and other related programming agreements and distribution arrangements with CBS Radio were previously scheduled to expire on March 31, 2009. Instead, the new deal, once ratified by WW1 shareholders, will establish a new relationship between CBS Radio and the WW1 network and Metro Networks divisions, through March 31, 2017 in exchange for certain programming and/or cash compensation.
The News Programming Agreement, which provides Westwood One with the exclusive national radio syndication rights to CBS Radio News, will continue through March 31, 2017. The radio stations owned by CBS Radio will broadcast Westwood One commercial inventory, including that of the WW1 Network and Metro Networks divisions, through March 31, 2017 in exchange for certain programming and/or cash compensation.
The Management Agreement and Representation Agreement between WW1 and CBS Radio will terminate. Westwood One will manage its business directly and separately from CBS Radio, and employ all of its officers. Employees of CBS Radio (including WW1 CEO Peter Kosann) will resign from the WW1 Board. The provisions of the Management Agreement providing Westwood with: (i) a right of first refusal to syndicate CBS Radio programming will continue through March 2017 and (ii) certain non-competition and non-solicitation rights will continue through March 31, 2010 and 2012, respectively. In addition, as part of the termination of the historical arrangements between the companies, Westwood One and CBS Radio are releasing certain claims they may have against each other.
Also, WW1 will retire the existing three million warrants held by CBS Radio WW1. CBS Radio has agreed to a standstill on the sale of its WW1 common stock until December 31, 2007.
"We are pleased to announce the execution of this new arrangement with CBS Radio. We believe the proposed transaction provides several benefits to the Company and its shareholders, including continued long-term distribution of Westwood One programming and products to major-market radio stations, compensation tied to delivery of audience and an extension of non-competition provisions through March 201," said David Dennis, Chair of the WW1 board’s Strategic Review Committee. All this, we would note, is subject to approval by WW1 shareholders.
RBR observation: Let the bidding begin! This is the move that Wall Street awaited. Now free from CBS, Westwood One is free to put itself up for sale. Who will Norm Pattiz, with his founder’s stock, find a suitable buyer? Inquiring minds want to know.
