I'd wager the Old Ship will be packed tonight with KCBS staffers; this bit of news has been on the rumor stage for months and is now fact.The question: who is a buyer? God forbid the Cloud people; how does a penny stock outfit with a super wad of debt even be considered?
Only in America.
Ol' Stroker Madden don't care...hard to tell, but he don't care.
ReplyDelete1) What would the asking price be and what might it actually sell for?
ReplyDelete2) Would any of the tech companies such as Amazon, Netflix, Google or Facebook be interested?
3) Would the current all-news format remain substantially in place?
Not sure why any tech companies would be interested in the dying platform that is terrestrial radio. Unless of course.......it's FOXIFIED! Just get rid of all the last remaining "good readers and reporters" at KCBS and bring in the youngsters with real social media skills and watch the ratings climb. But keep Larry "My Sharoney" at the 7PM slot. He's wonderfully painful to listen to. I'm sure he's a decent chap, but my god, he can't read a single sentence without tripping over his own tongue.
ReplyDeleteSpeaking of not being able to read a sentence, try listening to Dave (the radical) Padilla.
DeleteWhy do you assume Cumulus is a buyer?
ReplyDeleteIs it only in America or do you not know that in England media companies divest themselves of assets all the time?
This was predictable and changes nothing about the state of radio. If you think you work in FM radio and have a career you're clueless.
Deregulation led to this. Doesn't matter who congress was or which president, it was going to happen. Just like the banks and everything else.
The buyer will be hard to find and CBS won't sell off parts. Going to be good with the bad. All of radio in same place regardless of owner.
Rich - CBS Outdoor, the billboard company, was spun out by CBS into an independent company - no buyer at all, other than purchasers on the NYSE. There's a good chance that the same thing will happen here. This exercise is all about keeping the radio folks from dragging the mothership down.
ReplyDeleteNot Cumulus or iHeart obviously. Possibly Entercom or Alpha. Why all the focus on KCBS? CBS-SF has hundreds of other employees at Alice, 99.7 Now and Live 105.
ReplyDeleteBecause that's where most of the value is to a buyer, right?
DeleteAlice has to be up there with KCBS if not just below KCBS on the money making chart for CBS correct?! Who do they get rid of?
DeleteComing up on KCBS: satellite-generated programming from Bombay. It's cheaper and they can use tech to follow news and traffic in San Francisco.
ReplyDeleteThe sound you hear is radio as we once knew it going down the drain.
@ 10:39; those who continue to think the "solution" to radio's ills is to further consolidate and centralize programming, and to further rely on technology instead of paying people to generate interesting content: you're wrong and such actions would serve nothing but to continue radio's slide into ignominy.
ReplyDeleteFortunately, I think this lesson is starting to dawn on even the largest and most obtuse players in this game, and the shift back toward locally-generated programming on radio will mark the slow reversal of radio's fortunes overall; those who are innovative and adventurous enough will be rewarded.
Expect Cumulus to buy the CBS chain. There will plenty of cost cutting over at KCBS. Complete turnover in on-air talent.
ReplyDeleteI can't imagine Cumulus affording them but if they did take over, it's almost a certain replay of the Disney/Citadel disaster. More likely would be an independent spinoff, or purchase by an Entercom, Greater Media, Beasley, or Alpha.
DeleteI have to agree with "some guy" but will take it a step further.
ReplyDeleteI'm going to describe this in two ways. First as the dumber money, meaning Bain, Thomas Lee etc. they drove the industry off the cliff (along with the owners that) financial metrics were going to be the driving force) without understanding the business itself. The industry reluctantly accepted this philosophy. And I'm sure this happened in other industries since history shows it where the investment community get ahead of themselves and not appreciating the business itself and ruin it. (Not to lump the investment community together, there are those longtime investors who do appreciate the business and understand it.In fact right now they are investing in radio but smaller players and to quote an investor, you have to marry them when they are ugly. I hate sexist statement but the message is there. When times are tough that is when you move in as an investor)
Enter the much, much smarter money,(pragmatic investors and operators) who were patient and are willing to to partner or buy at reasonable valuations.
So I think (K)CBS's brighter and best days are ahead of it. A return to normalcy will happen.
And while you may be aware of this or may not, there are two FCC industry related events taking place. One of them is is reducing or doing away foreign media ownership rules to allow foreign investment capital to flow in. This you should pay attention too and learn more about it and come to your own conclusions.
Right now the investment community can not sell radio to itself because the pendulum in both investment and media opinion community has swung to far and they know they failed. So they do not want lose on their investment so they are looking for a foreign buyer silly enough to consider a much higher valuation on an emotional purchase.
The other thing being considered is again changing the ownership caps to consolidate. If the FCC does not allow both of things to happen, the current big two owners will fall apart and again, the smarter money comes in.
I have little doubt that neither cumulus or iheart will merge because of current legalities, though both investors who own both of them would like to see that happen.
Now would they like CBS's properties, again unlikely since it would require shedding other properties to get under the caps.
So again, I agree with both "some guy" observations and think industry investment into innovation and technology will drive the rebirth of this great business and it will come from smarter money. They know you can not shrink a business way into success.
Also CBS may sell, partner or spin off based on tax complications, not valuation. Les Moonves is a very smart guy and he will figure out a way the best returns to shareholders and himself. He wants to see the radio division value grow.
And if you want speculation, I wonder if former Infinity owner Mel Karmazin who sold CBS to Viacom and understands this wonderful business would return to the industry fold under these circumstances. He just might...
(sorry for the length Rich and readers but I thought these points were important)
It is possible they'll sell off regional clusters instead of the entire division to a single buyer. Either way, nothing will happen before the end of this year and the extra-lucrative political advertising season.
ReplyDeleteWhoever the eventual owner is, they need to bring back KFRC.
ReplyDeleteFor pre 2011 KGO radio fans: There are several new youtube posts of old KGO radio shows. Ray Taliaferro, Bernie Ward, Duane Garrett. More coming soon in the next few weeks. Shawn Nixx (sp?) Maybe Bill W. Search under "Abox Fullofcassettetapes"
ReplyDelete