CBS Radio has scrapped plans for an initial public offering and is instead merging with Entercom, the nation’s fourth largest radio operator.
CBS Radio’s 117 stations in 26 markets will combine with Entercom’s 127 stations in 27 markets. CBS Chairman and CEO Les Moonves announced in March 2016 that it was spinning off the Radio unit. Founded in 1928, it was the cornerstone of what has become CBS Corporation.
“This agreement is great for shareholders and achieves our previously stated objectives by separating our radio business in the best possible way,” said Moonves in a statement. “Entercom is a superbly run company, and together with CBS Radio’s powerful brands and remarkable people, we are creating an organization that will be even better positioned to succeed in this rapidly evolving media landscape.”
David J. Field, President and CEO of Entercom, will lead the combined company, which will retain the Entercom name and be based in Philadelphia, with offices in New York.
“These two great companies, with their impressive histories, complementary assets, and premier content and brands, are a perfect strategic and cultural fit, enabling us to deliver local connection on a national scale and drive accelerated growth,” said Field. “We look forward to welcoming our talented new colleagues at CBS Radio, and we have the utmost respect for their significant contributions to the industry.”
In an interview late last year, newly-installed CMO Ruth Gaviria told Adweek her goal was to convince brand marketers that radio works. “We want to show advertisers how their competitors have benefited from radio. Radio doesn’t fail. What sometimes fails is the type of campaign, the creative, and the fact that marketers don’t always use the full range of radio. We have on-air personalities who can seamlessly endorse what they need to endorse, and we can make that endorsement genuine and authentic.”
In what is expected to be a tax-free deal to CBS after completion, CBS Radio shareholders will receive approximately 72 percent of all outstanding shares while Entercom shareholders will own 28 percent of the combined company. The deal is expected to close in the second half of 2017. IHeartMedia remains the nation’s largest radio operator with more than 850 stations.
Late last year, CBS Radio News cut some of its biggest on-air names including Washington correspondent Barry Bagnato who was with the network for 30 years and anchors Harley Carnes (24 years) and Bill Whitney (32 years) and Dan Raviv (23 years).