CBS is turning the dial on one of its oldest businesses. The US broadcaster is combining its radio business with Entercom Communications in a merger that will create the country’s second-largest radio station owner by revenue.
The news comes nearly a year after CBS first announced plans to shed its radio holdings amid slow growth. In July the broadcaster filed to spin the radio unit off in an initial public offering, reports Shannon Bond in New York.
“This agreement is great for shareholders and achieves our previously stated objectives by separating our radio business in the best possible way,” said Les Moonves, CBS chief executive.
CBS shareholders will own 72 per cent of the combined company, to be known as Entercom, once the merger, structured as a Reverse Morris Trust that will be tax-free to CBS and its shareholders, is completed in the second half of this year. The enlarged Entercom will own 244 US stations and counts pro forma revenue of $1.7bn, making it the biggest US radio owner after iHeartMedia.
Radio still reaches more than 90 per cent of Americans on a weekly basis, according to Nielsen, but the radio ad market has flattened around $17bn a year amid competition from digital companies including Apple Music, Pandora and Spotify.
CBS has been refocusing its businesses on television content. It spun off its $3.3bn billboard advertising unit into a public company two years ago.