Monday, February 6, 2017

iHM's Bob Pittman Praises Entercom-CBS Radio Deal

Bob Pittman
In an exclusive interview with Charles Warner for  FORBES, iHeart Media's Chairman and CEO Bob Pittman praised the Entercome/CBS Radio deal by saying, “Radio is now the biggest reach medium -- and this merger is another important validation of the value of radio and audio.  Under David Field’s leadership Entercom has been a great partner, and we’re looking forward to continuing to work with them to help new advertisers and marketers discover the full and unique power of radio."

This past week CBS, Corp. and Entercom announced the merger of CBS Radio's 177 stations with Entercom's 127  stations in a tax-free deal that will form the second largest radio group in terms of revenue in the country behind number-one iHeart Media.

The new radio company will be called Entercom and will have 244 stations, which is not as many as iHeart's 850 stations or Cumulus Media's 460 stations, but with stations in 23 of the top 25 markets and pro-forma revenue of $1.7 billion it will be number-two in revenue and will be run by Entercom's current CEO, David Fields.

CBS announced early last year that it would explore strategic alternatives for its radio business, but it has taken it almost a year to work out a deal that would not burden its stockholders with massive capital gains taxes on many radio stations that began being acquired by CBS in 1927 when William S. Paley invented option time that led to the explosive growth of radio advertising and network radio.

But with the introduction of the internet and the switching of attention and thus advertising to digital, the radio industry has been challenged to keep growing revenue. Radio has done a much better job of retaining ad dollars than newspapers and magazines, but nevertheless radio revenue growth has been flat or slightly up in the last several years.

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