CBS Radio-Entercom Merger is A Big Deal For Country Format, Too
February 2, 2017 at 10:18 AM (PT)
The announcement earlier TODAY that CBS RADIO and ENTERCOM will soon merge is a really big deal (NET NEWS 2/2). When completed, ENTERCOM jumps from previously being the fourth-largest radio company in AMERICA to #2 (behind iHEARTMEDIA), expanding its overall station portfolio from 127 stations in 27 markets to 244 stations, including 23 of the top 25 markets.
It’s a pretty big deal for ENTERCOM’s Country division, too, which more than doubles in size, from a modest eight stations to 20, six of which will be in the top 20 markets. The CBS RADIO Country stations now headed for the ENTERCOM banner include: WUSN/CHICAGO; WYCD/DETROIT; KILT/HOUSTON; WKIS/MIAMI; KMNB/MINNEAPOLIS; WXTU/PHILADELPHIA; KMLE/PHOENIX; WDSY/PITTSBURGH; KFRG & KXFG/RIVERSIDE, CA; KNCI/SACRAMENTO; and KMPS/SEATTLE. They join existing ENTERCOM Country outlets WPAW/GREENSBORO, NC; WDAF/KANSAS CITY; WLFP/MEMPHIS; KWJJ/PORTLAND; WBEE/ROCHESTER, NY; KSON/SAN DIEGO; KKWF/SEATTLE; and WGGY/WILKES-BARRE, PA.
The merger also makes for a couple of interesting scenarios. In SEATTLE, ENTERCOM Country KKWF has been duking it out with CBS RADIO’s crosstown KMPS since 2005, when KKWF was first launched. Soon, staffers from both stations could be mingling in the same break room. Or not. The deal puts ENTERCOM over the cap in terms of total stations allowed per market in numerous locations, SEATTLE among them. CBS RADIO and ENTERCOM each own five stations there. Other markets with conflicts – though none in the Country format – include BOSTON; LOS ANGELES; SACRAMENTO; SAN DIEGO; and SAN FRANCISCO. And station divestiture in those cities is another conversation entirely.
Today's news also means a third owner in three years for WXTU/PHILADELPHIA and WKIS/MIAMI. Those two Country outlets were part of a CBS RADIO-BEASLEY swap in 2014, with ‘XTU and ‘KIS shifting from BEASLEY to CBS RADIO (NET NEWS, 10/2/14).
While nothing has been announced and nobody in their right mind would comment at this very early stage, ENTERCOM Dir./Country MIKE MOORE, who doubles as VP/Programming for the company’s PORTLAND, OR cluster, and who handles day-to-day for Country KWJJ -- seems likely to continue his leadership role for the expanded Country station roster. CBS RADIO has had a VP/Country for years, beginning with JEFF GARRISON (now with COX Country KCYY/SAN ANTONIO). He was succeeded by JEFF KAPUGI when KAPUGI joined the company in 2011 to program WUSN/CHICAGO. That role has been vacant since KAPUGI left WUSN in DECEMBER (NET NEWS 12/6).
As for the bottom line on the deal from a business standpoint, as ALL ACCESS reported this morning, it goes like this: the combined companies’ pro forma revenue on a trailing 12 months basis was approximately $1.7 billion and adjusted EBITDA was nearly $500 million, including expected transaction synergies. With pro forma leverage of approximately 4.0x net debt/Adjusted EBITDA, the merger will create a company with a market cap of over $2 billion.