Suburban Philadelphia's Entercom Communications Corp. thinks it can revitalize the beleaguered sector with its $4 billion deal with CBS Radio.
According to philly.com, the stunning merger — recasting the family-owned Entercom into the nation's No. 2 radio group — is the latest shake-out in a radio industry besieged with radio station consolidation, cookie-cutter formats, digital competitors, and a loosening grip on 240 million weekly listeners.
One indication of radio's woes: The nation's No. 1 station group, iHeartMedia, is teetering on bankruptcy, buried under about $20 billion in debt.
Entercom CEO David Field, 53, who will head Entercom/CBS Radio if federal regulators and shareholders approve the deal. has a plan hto grow radio to 8 percent to 10 percent of the advertising pie and boost digital and events revenue. The deal will vault the Bala Cynwyd company, based in a plain multistory office building, into the big time with a sweeping footprint of 244 radio stations in 23 of the top 25 markets, generating $1.7 billion in annual revenues and employing more than 5,000.
It's "all about local" content, Field told the analysts. He believes there's potential for radio to be "rediscovered by advertisers."
Wall Street analysts and industry observers regard Field as a disciplined manager with a solid track record. Entercom's stock — which collapsed in the 2008 fiscal crisis and has yet to regain its pre-crisis levels — has tripled over the last five years.
Mark Fratrik, chief economist at the research-consulting firm BIA/Kelsey, said that "the one thing you have to remember about radio: It's still there. People still listen to the radio when they drive. It is still a very relevant player."
A media giant with a storied past in radio, CBS Corp. is exiting the business as it focuses on television and streaming. Field noted to analysts that CBS Radio employees will be part of a company "where radio is first."
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