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CBS Radio Sale Has Sumner Redstone’s ‘Full Support’

Discussion pertaining to Detroit, Ann Arbor, Port Huron, and SW Ontario

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Calvert DeForest
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Re: CBS Radio Sale Has Sumner Redstone’s ‘Full Support’

Post by Calvert DeForest » Mon May 30, 2016 8:47 am

Is CBS selling the radio division outright or spinning it off to a subsidiary company with a new IPO?
My New Year's resolution is not to make New Year's resolutions.

LouPerry
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Re: CBS Radio Sale Has Sumner Redstone’s ‘Full Support’

Post by LouPerry » Mon May 30, 2016 1:08 pm

Good question Calvert – I can't figure it out. Educated guessing here: I assume they are looking for a buyer. It’s so big that I wouldn't expect any of the radio operators could digest it. Major investors in iHeart are Bain Capital and Thomas H Lee Partners who really own Cumulus. iHeart is owned by Crestview Investments. You have three major investment companies invested in two major losers. Each have heavyweight radio executives and why they allow what has happened remain so I don’t get it. Assume other investment groups would have interest. So here is CBS Radio managed the best in the industry in my opinion that also has a network sports division, a leading news network, in most markets has top 5 stations. Bloomberg values CBS Radio above $3 billion. So here you have a well-managed and profitable enterprise. Seem to me it would be a great buy.
An article in this week’s Variety had some interesting insights. “The unit mints money”. Jan Dawson Media & Money reporter has torn the Local Broadcasting Division numbers that includes local TV with CBS Radio generating $1.2 billion. That’s about 9% of CBS’ total revenue. Dawson says CBS will be filing SEC documents about the CBS Radio transaction in the next few weeks.

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RingtailedFox
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Re: CBS Radio Sale Has Sumner Redstone’s ‘Full Support’

Post by RingtailedFox » Mon May 30, 2016 1:14 pm

If CBS Radio is a H*** money maker, then why is it being sold? you don't eat the goose that lays your golden eggs...
~ The Legendary Raccoon-Fox has spoken!

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MWmetalhead
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Re: CBS Radio Sale Has Sumner Redstone’s ‘Full Support’

Post by MWmetalhead » Mon May 30, 2016 1:43 pm

Spin-off/IPO. It's been widely reported. This is similar (but not identical) to what they did with CBS Outdoor (now known as Outfront).
Riding Amtrak is dangerous.

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Some Guy from Toledo
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Re: CBS Radio Sale Has Sumner Redstone’s ‘Full Support’

Post by Some Guy from Toledo » Mon May 30, 2016 3:36 pm

MWmetalhead wrote:Spin-off/IPO. It's been widely reported. This is similar (but not identical) to what they did with CBS Outdoor (now known as Outfront).
Recall noticing the CBS logo on those billboards up in Monroe County a year or so ago.

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Les Nessman
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Re: CBS Radio Sale Has Sumner Redstone’s ‘Full Support’

Post by Les Nessman » Tue May 31, 2016 7:57 am

RingtailedFox wrote:If CBS Radio is a H*** money maker, then why is it being sold? you don't eat the goose that lays your golden eggs...
Stock price. While the radio division brings in revenue and lots of cash flow, it's a slow-growth industry. Make it a company on it's own and it doesn't drag on CBS's stock price. Like with outdoor, once it spins, CBS will still be a majority shareholder at least for a time. I believe CBS's stake in Outfront is now down around or below 10%.
"The radio business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs.

There's also a negative side"

-Hunter S. Thompson

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WOHO
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Re: CBS Radio Sale Has Sumner Redstone’s ‘Full Support’

Post by WOHO » Tue May 31, 2016 9:56 am

Wasn't the family trying to get Sumner Redstone declared 'incompetent' or something crazy like that to remove his power (and wealth)?

LouPerry
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Re: CBS Radio Sale Has Sumner Redstone’s ‘Full Support’

Post by LouPerry » Tue May 31, 2016 12:24 pm

RingtailedFox wrote:If CBS Radio is a H*** money maker, then why is it being sold? you don't eat the goose that lays your golden eggs...
http://variety.com/2016/voices/columns/ ... 201777373/

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MWmetalhead
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Re: CBS Radio Sale Has Sumner Redstone’s ‘Full Support’

Post by MWmetalhead » Sat Jun 04, 2016 11:06 am

While the radio division brings in revenue and lots of cash flow, it's a slow-growth industry. Make it a company on it's own and it doesn't drag on CBS's stock price.
Bingo.

And in a slow growth (that's generous - I'd describe radio as being in decay mode) industry, what is the primary way of creating shareholder value? Answer: cutting costs through consolidation and growing market share of revenue.

What does this mean for the soon-to-be-autonomous CBS Radio? Look for them to go into acquisition mode within 12 to 24 months of the spin-off/IPO being completed.
Riding Amtrak is dangerous.

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