By: Rachel Lipsitz

Contact Information [2]

1271 Avenue of the Americas FL 44

New York, NY 10020

212.649.9600

Cbsradio.com

 Key Executives [3]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overview

CBS Radio is the nation’s number 2 radio group, including 117 stations, 26 of which are in the largest radio markets in the country. In 2015 alone, CBS radio estimated generating around $1.3 billion in revenue[4]. CBS Radio’s geographically dispersed stations serve to target many different demographics through a broad range of formats, including: rock, classic, adult contemporary, top 40, sports and country [5].

History

CBS Radio was created as a radio network in 1927. From 22 stations that started to air in 1928, the company grew to 114 stations in just a single decade and by 1932 was earning an annual profit of $3 million [6]. In the late 1940s, CBS Radio was able come out on top due to its development of long-playing records by its Columbia Records division. In 1995, Westinghouse Electric Corporation acquired CBS for $5.4 billion. In 1997, Westinghouse changed the name of his new company to CBS Corporation and moved its headquarters from Pittsburgh to New York City [7]. In 1999, entertainment conglomerate Viacom announced that it was taking over CBS in a deal worth $37 billion, but only lasted until 2005 when CBS split into two, where CBS Radio became a part of CBS Corporation under its broadcasting division [8].

Competitors 

CBS Radio has four direct competitors: Emmis Communications, Entercom Communications, iHeartMedia and Cumulus Media. CBS Radio competes within their respective markets for audience, advertising revenues and programming with other radio stations [9]. These company’s radio stations, which also include their online internet streaming services, compete with services like Spotify and Pandora.

Financials 

CBS Corporation is a publicly traded company and on April 23, 2016, was traded at $56.59 per share, which is is down from last years price, which was $60.63 per share. Right now, the company’s stock value lies between the 52 week low of $38.51 per share and the 52 week high of $63.95 per share [11].

The majority of CBS Radio’s revenues are generated from the sales of local and national advertising [12]. In 2015, CBS Radio’s radio revenue decreased by 6% and took a $484 million write-down on the value of its FCC radio licenses [13].

Due to the fact that CBS Radio is a subsidiary of CBS Corporation, the financials for the radio division are combined with the financials for the local broadcasting television division.The Local Broadcasting revenues for the fourth quarter of 2015 were $719 million. CBS Radio revenues were down 5%, which reflected the continued decrease in the radio advertising marketplace [15].

CBS Sports Radio 

CBS Sports Radio was launched in January 2013 and offers 24/7 national sports coverage and programming to over 330 stations, including stations in all of the top 10 markets. CBS Sports has many different programs across across multiple weekdays and weekend time periods that feature expert sports commentary by very experienced broadcasters [16].

Most recently, CBS Radio’s 98.5 The Sports Hub finished first overall during the three-month winter Nielsen Audio Ratings period as sports talk continued to dominate the Boston radio market [17]. The Sports Hub earned an 11.8 share overall from the period of December 31 to March 23, which is a higher than the station got last winter, when the New England Patriots were in the SuperBowl [18].

CBS Corporation Potentially Getting Rid of Radio Division

CBS Chairman and CEO, Leslie Moonves, recently made a public announcement about exploring other options for CBS Radio due to the fact that it is no longer the crown jewel of the company. Some of the options that Moonves is referring to is either spinning off the radio divisions as a separate company or selling the stations as a whole [19].

“We have 117 radio stations and we think that will be a great standalone company. As a standalone high-cash, relatively low-growth business, it will do really really well and it’ll do better as a standalone than part of the other divisions of CBS” [20].

-Leslie Moonves

On March 30, 2016, Andre Fernandez sent a memo to the CBS Radio staff informing them what was discussed in a meeting with Leslie Moonves, regarding the future of the company. In the memo, Fernandez tells the staff that the primary course of action by CBS Corporation is to split CBS Radio off via an IPO [21]. By making CBS Radio an IPO, the goal would be to become their own publicly traded company, which would allow the radio division to define their own operating strategy. The memo also stated that there are other options that are being explored for how the company should handle the situation: there is the possibility that CBS Radio will become part of another company [22].

Due to the fact that CBS Radio has acquired many assets throughout the decades, the company should have major tax consequences depending on how the sale of the division is structured [23].

Some Restructuring Within the Company 

Karen Mateo, SVP/Communications, who has played an integral part at CBS Radio’s management division for 13 years, announced that she will be leaving the company.

Todd Cavanah was recently named the new vice president of programming for CBS Radio Chicago. Cavanah will be in charge of program oversight for the six Chicago radio outlets and will be in charge of identifying opportunities to improve ratings, which are directly connected to each station’s ability to generate ad revenue [24].

Chad Fitzsimmons was promoted to VP of Music Initiatives at CBS Radio. His new position will put him in charge of creation and execution of CBS Radio’s concert series, which includes We Can Survive and The Night Before [25]. 

“The exponential growth and critical acclaim that our national events have experienced over the last few years is a direct result of Chad’s vision and passion for the unique and powerful marriage of radio and the music industry” [26].

-Chris Oliviero

2016 Regional Edward R. Murrow Awards

At the 2016 Regional Edward R. Murrow Awards, The Radio Television Digital News Association announced the winners, where 11 respected CBS Radio stations received a total of 25 awards. Stations in San Francisco and Philadelphia were honored with the Overall Excellence award for Large Market Radio stations [27].

“It brings me great pride to see our stations recognized for their continued excellence in journalism. Telling the stories that mean something to the local communities we serve has been the hallmark of CBS Radio for decades, and that long standing commitment to our audience is the foundation upon everything we do as broadcasters” [28].

-Leslie Moonves

Future

Considering the recent announcement that CBS Radio is thinking about becoming an IPO, the future of the company can be going in a few different directions. Throughout the coming weeks and months, people will be keeping a close eye on what Leslie Moonves and Andre Fernandez decide to do with the company, and how much of their decision they decide to share with the public and with their investors. The fact that CBS Radio is making new management changes gives hope to many that the structure of the company should not change much if they decide to become an IPO, but watching what happens in the future with CBS Radio and CBS Corporation will be interesting.

Sources

1. CBS Radio: Houston @ Dave Farra. Retrieved April 24, 2016.
2. CBS Radio Contant Information. Retrieved April 24, 2016.
3. CBS Radio Executives. Retrieved April 24, 2016.
4. Fitch Expects CBS Radio To Remain Sound. Retrieved April 24, 2016.
5. CBS Corporation, Investor Relations, SEC Filings. Page 10. Retrieved April 24, 2016.
6. Erickson, Harold. January 26, 2016. CBS Corporation.  Britannica. April 24, 2016.
7. Columbia Broadcasting System. Retrieved April 24, 2016.
8. Columbia Broadcasting System. Retrieved April 24, 2016.
9. CBS Corporation, Investor Relations, SEC Filings. Page 11. Retrieved April 24, 2016.
10. CBS Interactive Stock Chart.  Retrieved April 23, 2016.
11. CBS Historical Stock Quotes. Retrieved April 24, 2016.
12. CBS Corporation, Investor Relations, SEC Filings. Page 11. Retrieved April 24, 2016.
13. Kelps, Kevin. April 10, 2016. Radio Dials Up Doubt For Stations. Crain’s Cleveland Business. April 24, 2016.
14. CBS Corporation, Investor Relations, SEC Filings. Page 20. Retrieved April 24, 2016.
15. CBS Corporation, Investor Relations, SEC Filings. Page 20. Retrieved April 24, 2016.
16. CBS Sports Radio, About Us. Retrieved April 24, 2016.
17. Finn, Chad. April 13, 2016. Sports Hub Dominates Latest Boston Radio Ratings. Boston Globe. April 24, 2016.
18. Finn, Chad. April 13, 2016. Sports Hub Dominates Latest Boston Radio Ratings. Boston Globe. April 24, 2016.
19. Wagoner, Richard. March 25, 2016. Is CBS Getting Rid of its Entire Radio Division? Daily News. April 24, 2016.
20. Moonves: CBS Radio Will Do Better On Its Own. Retrieved April 24, 2106.
21. Andre Fernandez Addresses the Future of CBS Radio in an Email to Staffers. Retrieved April 24, 2016.
22. Andre Fernandez Addresses the Future of CBS Radio in an Email to Staffers. Retrieved April 24, 2016.
23. Morgan, Richard. March 31, 2016. CBS Plans to Spin Off Radio Business With an IPO. NY Post. April 24, 2016.
24. Lazare, Lewis. April 21, 2016. CBS Radio Adds New Management Layer to Chicago Programming Ranks. Chicago Business Journal. April 24, 2016.
25. CBS Radio Promotes Fitzsimmons. Retrieved April 24, 2016.
26. Chad Fitzsimmons Elevated to VP/Music Initiatives at CBS Radio. Retrieved April 24, 2016.
27. Ross, Kevin. April 19, 2016. CBS Radio Stations Honored with 25 2016 Regional Edward R. Murrow Awards. Radio Facts. April 24, 2016.
28. CBS Radio, Press Room. Retrieved April 24, 2016.
29. iHeartMedia Logo. Retrieved April 25, 2016.
30. Emmis Communications Logo. Retrieved April 25, 2016.
31. Entercom Communications Logo. Retrieved April 25, 2016.
32. Cumulus Media Logo. Retrieved April 25, 2016.
33. 98.5 The Sports Hub Logo. Retrieved April 25, 2016.
34. CBS Sports Radio Logo. Retrieved April 25, 2016.
35. Leslie Moonves Executive Picture. Retrieved April 25, 2016.
36. Edward R. Murrow Awards Logo. Retrieved April 25, 2016.