Readers are divided on CBS Radio’s future

By the editors of Media Life

This is one in a number of stories on radio in Media Life’s ongoing series “The new face of radio in America” examining all the changes taking place in the medium. Click here for earlier stories.

When CBS chief Les Moonves announced the company was seeking strategic alternatives for CBS Radio—that it was on the block-it came as little surprise, and as much as anything it was a statement about radio and big radio in particular.

Radio just wasn’t the business it once was, and it was looking increasingly grim with the rise of digital alternatives like Pandora. CBS saw its fortunes elsewhere.

In the time since, CBS has stressed that the strategic alternatives it has in mind is a spinoff of the radio unit as a separate company

But media buyers see that as but one of the possible outcomes for the radio division.

In a recent poll about big radio, readers were asked what they saw as the future of CBS Radio now that it was on the block.

Key to it all, of course, is just how valuable CBS Radio really is, both whole and broken up.

The largest share of respondents, 41 percent, agreed with this statement: “It will not find a buyer and will be sold off in pieces.”

Twenty-eight percent agreed with this statement: “The fact that CBS chief Les Moonves wants to dump the unit tells you its future is none too bright.”

Few think it will be bought up by a major player in the radio industry, which is understandable with the two top players, iHeartMedia and Cumulus, struggling under hefty debt loads. Just 5 percent of respondents thought so.

A number of respondents commented that a spinoff made the most sense, with the taxes advantages that come with an initial public offering. They note CBS spun off its outdoor division in 2014. Radio would go the same way.

“It will be spun off as a separate radio entity similar to what CBS did with its outdoor business,” wrote one respondent.

“Will take this out as an IPO and dividend it out to existing CBS holders-similar to CBS Outdoor,” wrote another.

Some readers think that would be good for radio. As one put it, “The spinoff of CBS to their own company will be the best thing that happened to the industry in years.”

But even with a spinoff some see a selloff of some of the company’s 117 stations as inevitable as the new entity positions itself in the market. Wrote one reader:  “They will keep some radio in the largest markets, where there is good cash-flow and strong ties to owned TV stations.”

Stations in smaller markets would be sold off. Just what the value of those stations might be is a big question mark, however, especially with both iHeart and Cumulus at risk of being broken up.

Whatever happens to CBS Radio, readers agree it is the strongest of the big radio groups.

Asked which of the big three faced the dimmest future, iHeartMedia was the top choice at 52 percent. Next came Cumulus at 28 percent. CBS Radio came in at just 10 percent.

Tags: cbs radio, cbs radio sold, les moonves, radio, sell cbs radio, the new face of radio in america