CBS & Entercom merger

[Garrett Wollman]

<<On Thu, 2 Feb 2017 17:33:05 -0500, Scott Fybush <scott@fybush.com> said:

> If CBS is looking to make a tax-free swap, they have to have something 
> to give up that the other company will actually want. That might be more 
> than just 680 and 850.

This is likely to be really challenging.  You could see a Salem
perhaps wanting to operate up one or both of those AMs, but they don't
have much useful to swap back.  iHeart wouldn't want either one, it
would make no sense for their current strategy in Boston, although
they do own in most if not all of the other CBS/Entercom markets.  (On
the other hand, it seems like iHeart would be the obvious buyer for
107.3, assuming it gets spun, and they probably can't pay cash and do
have something that could be traded in a market where NewCo will have
cap room.)

I would not be surprised to see EMF involved in this deal when all's
said and done.

> If there are still any teeth to the Antitrust Division at the new 
> Justice Department, there could be revenue issues with keeping only the 
> biggest of the FMs.

I'm going to assume not, and maybe be pleasantly surprised if
something else happens.  I'm sure CBS's lawyers have already planned
for that contingency, and management has decided which stations
they're willing to shop around.  Probably they'd prefer to do a deal
with someone who can help them with their west-coast cap issues as
well.

The way the deal was described, CBS shareholders will get to choose to
hold on to their stock in old-CBS or take the spinoff.  In order for
this to work, National Amusements is presumably not going to take
Radio stock -- the ownership cap issues would get worse if the
Redstones end up with an attributable interest in radio, since most of
the problem markets, like Boston, have CBS-owned TV duopolies.

-GAWollman