BIA/Kelsey Report Evaluates CBS Radio As It Approaches IPO

A Look At CBS Radio

BIA/KELSEY has conducted an independent evaluation of CBS RADIO INC. as it approaches its IPO. In this 60-plus-page report, BIA/KELSEY provides insights into local advertising in the U.S. and in each of the 26 markets where CBS RADIO operates, and offers a valuation of CBS RADIO under multiple approaches.

The report indicates that of the $146.3 billion in U.S. local advertising revenues in 2016, $64 billion (44%) will be generated in the 26 markets in which CBS RADIO competes. Digital/online local advertising in those markets is expected to generate $17.9 billion in 2016 and should grow rapidly. Radio advertising in those markets is estimated to reach $5.8 billion this year.

Strong Revenue from Fewer Stations Concentrated in Larger Markets
  
The report notes that in 2015, CBS RADIO ranked second in U.S. radio revenue at $1.2 billion, generated by only a fraction of the number of stations owned by number-one-ranked iHEARTMEDIA, with $2.6 billion. The reason CBS RADIO generates such large revenue given its relatively small number of stations is that it is concentrated in the major markets. CBS RADIO has dominant clusters in the eight largest radio markets in the nation and in many of its smaller markets. 

According to BIA/KELSEY, the CBS RADIO clusters generated 46.4% of the radio revenue in HARTFORD, 35% in NEW YORK, 33.5% of the radio revenue in DETROIT, 33.1% of the radio revenue in BOSTON and PHILADELPHIA and 29.4% in CHICAGO in 2015.

"CBS RADIO has been in the commercial local radio business since the inception of radio stations in the U.S.," said BIA/KELSEY CEO TOM BUONO. "It has a long history of developing national and local entertainment and news programming. Much of that national programming migrated over to the television industry, but CBS has always had a commitment to strong local radio programming and that steadiness has been rewarded by strong ratings and local station revenues."

The first in a series of public media company profiles the BIA/KELSEY plans to publish, the company's Chief Economist MARK FRATRIK commented on the report saying, "As CBS approaches its Initial Public Offering, we thought it was important for BIA/KELSEY to share its insights and observations from our proprietary data collected over 30 years because it offers an insightful, meaningful assessment of this important business transaction for executives and analysts who are involved and/or invested in the radio industry."

This report may be purchased online at https://shop.biakelsey.com/product/cbsradio.

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