CBS plans to sell its radio business
CBS Corp. is looking to sell its continued ownership of its radio assets — including its six stations in Detroit — over the next year, CEO Les Moonves said Tuesday at CBS’s Investor Day in New York City.
“We will begin to officially explore strategic options for radio as a whole,” Moonves said Tuesday. “Just as we did (when CBS spun off its outdoor advertising in 2014), the aim here is to unlock value for our shareholders. There are a number of different options for doing this, and we’ll be looking at all of them. ...When we’re through, we’ll have done something that’s right for shareholders of CBS and for the CBS Radio business, too.”
Moonves’s announcement comes less than a year after CBS Radio Detroit laid off more than a dozen staffers, including on-air talent, producers and salespeople.
In Detroit, CBS Radio holdings are WWJ Newsradio 950 (which was owned by The Detroit News until then-News owner Gannett was forced to sell in 1987), a sports talk radio station on AM 1270, 97.1 The Ticket, 99.5 WYCD, 104.3 WOMC and 98.7 AMP Radio.
Moonves had told investors that “there is no better time for a content company to thrive” than an era where companies have so many properties available for advertisers. “It’s a time for confidence,” Moonves added.
“We are now being paid in more ways for our programming, advertisers are extremely confident, and consumers are spending more and more on entertainment,” Moonves said.
CBS Radio, in a statement, said that “it makes sense that CBS Corporation, a company that is now focused primarily on premium video content, would choose to unlock the value of its radio operation,” adding that it “looks forward to competing in this evolving industry with the strongest portfolio of major-market brands in the radio business.”
The radio division has had trouble keeping pace financially with CBS’s core business, television. The company regularly boasts that CBS is the most-watched network. One week in February, Moonves said, CBS had every spot in the top 10 most-watched broadcasts — not including the NFL’s Super Bowl 50 or the Grammy Awards, only counting regularly scheduled series.
The next week, it had the top 11. CBS has been the most-watched network 13 of the last 14 years.
On the television front, CBS says it is prepared to compete whether the larger, 180-channel cable TV bundle continues to be the mode for subscribers, or if the “skinny bundle” of just a few channels continue gaining popularity. CBS makes more money per subscriber from the skinny bundle than from the traditional bundle, Moonves said. The company does even better still with subscription services such as CBS All Access and Showtime OTT, Moonves said.
And while Moonves described CBS’s local TV stations as “an essential part of our growth story,” the same can’t currently be said for its radio properties.
“As you know, for a while now we’ve been reducing our footprint here,” Moonves said, before announcing the company would be exploring “strategic options,” including possibly a sale of those properties. “We don’t have a lot more information to give you in this initiative right now,” he said.
But the numbers indicate radio is struggling.
According to Variety, “CBS took a $484 million write-down on the value of its radio station group in the fourth quarter” of 2015. CBS owns 117 radio stations in 26 markets, Variety says.
While representatives from CBS, Showtime, and the corporation’s interactive division spoke on Investor Day, no one from the radio division did.
Through a spokeswoman, CBS Radio declined to say how many people it employs.