CBS radio division job cuts could signal sale

Susan Whitall
The Detroit News

Tuesday’s news that CBS Corp. is exploring options to spin off or sell its historic radio division of 117 stations wasn’t entirely unexpected.

Doug Karsch, left, and Scott “The Gator” Anderson banter during a 2013 show on 97.1 “The Ticket.” The station is one of five in metro Detroit owned by CBS Radio.

CBS chairman and CEO Leslie Moonves announced that he was exploring a sale of the radio division, which is ranked No. 2 in the country, but said there was no timeline, that they would take their time unspooling it — some say because of the 2016 political ad revenue rolling in.

The company, which owns five stations in metro Detroit — all-news WWJ (950 AM); sports WXYT “The Ticket” (97.1 FM); classic hits WOMC (104.3 FM); country WYCD (99.5 FM); and Top 40 WDZH “Amp Radio” (98.7 FM) — slashed 13 jobs last July in the Detroit market, and hundreds nationwide, which signaled a possible sale to many.

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 job cuts came despite the fact that WWJ, WOMC and The Ticket have been among the city’s top-rated radio stations for some time.

“There had been cutbacks before at CBS, but the difference was, from what I hear, this affected sales people, too,” said Matt Friedman, a Detroit media analyst and former WWJ staffer. “So they were cutting jobs in sales, that historically, increased revenue.”

Detroit Mayor Charles Bowles talks about a campaign to recall him in 1930. It was the first political speech at WWJ, which debuted in 1920 as the “Detroit News Radiophone.”

The company’s flagship station in Detroit is WWJ, which debuted in 1920 as the “Detroit News Radiophone,” operated by The News in its landmark building at Second and Lafayette. The station originally broadcast under the call sign 8MK until the letter format was introduced in 1921 and the station became WBL and then WWJ after listeners complained they had trouble hearing the letters. According to CBS, WWJ is believed to be the first station to broadcast regular news reports, as well as the first regular religious broadcast and play-by-play sports broadcast.

In 1987, the paper sold the station to Federal Broadcasting Corp. under federal rules that banned cross-ownership of newspapers and radio or television stations in the same city. CBS purchased the 50,00-watt station in 1989.

ABC and NBC got rid of their radio divisions years ago. Still, the very soul of CBS was its radio division, going back to when William S. Paley bought the fledgling radio network in 1928 and remade it into a news powerhouse.

“When William S. Paley bought the company, he let (newsman) Edward R. Murrow work his magic ... which gave CBS immeasurable corporate prestige, and really set the template for modern broadcast journalism, that we still use today,” said Tim Kiska, author and journalism professor at the University of Michigan-Dearborn.

Murrow’s urgent nightly CBS reports, broadcast to America from the rooftops of blitz-torn London, helped convince Americans that the U.S. needed to enter the war.

But today, radio is an aging medium that isn’t showing the kind of revenue growth that shareholders like. And young listeners have been drifting away.

According to the Wall Street Journal, in the fourth quarter of 2015, CBS took a $484 million write-down on the value of its FCC radio licenses. Radio revenue fell 6% last year, which the company blamed on a soft advertising market and less revenue from political ads.

Two years ago, CBS spun off its outdoor advertising division, and it seemed that for radio, left behind by streaming services and digital downloads, it was only a matter of time.

“Overall, the music stations are particularly vulnerable because there are so many ways to get music on the go,” said Friedman. “We have the power to set it up so we don’t have to listen to songs we don’t like anymore, or commercials.”

But Friedman feels that local, all-news stations would be attractive to young listeners, especially those who drive, if produced and marketed properly.

According to reports, Cumulus Media, which owns three stations in Detroit, including WJR (760 AM), country station NASH (93.1 FM) and Top 40 WDVD (96.3 FM), was sniffing around the CBS properties.

But Cumulus, like its competitor, I Heart Radio — the nation’s No.1 radio chain — is debt-ridden and struggling with huge loan payments.

It’s still too soon to know how CBS will proceed in offloading its radio division. But if it’s sold off in pieces, that could be a problem for its news stations.

One of the company’s crowning jewels is the national newscasts that news stations such as WWJ and WBBM in Chicago depend heavily upon, and run at the top of the hour.

Said Kiska, who worked at WWJ as a producer in the early 2000s: “Those newscasts are spectacular. All of their reporters are good, they knew what they were talking about, and we could always get them on the phone quickly. What would these news stations do without that?”

CBS Metro Detroit stations

News: WWJ (950 AM)

Sports: WXYT “The Ticket” (97.1 FM)

Classic hits: WOMC (104.3 FM)

Country: WYCD (99.5 FM)

Top 40: WDZH “Amp Radio” (98.7 FM)