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what stays, what goes... ETM/CBS merger

D

Deleted User

Star Participant
OK assuming that there are more than 45 stations in the DMA, Entercom will be able to have 8 stations, with no more than 5 on one band.

there is also a regulation that limits the percentage of total revenue in the market they can control, and that is 40% IIRC

My prediction?

On the AM side WBZ AM and WRKO stay, and WEEI AM may stay but only if the revenue limits are not close enough that tossing 850 will keep them from going over.

On the FM side I predict WEEI FM, WBZ FM ( the sports stations) WZLX, WBMX and WODS stay.

That means WKAF and WAAF get tossed.

How does WBZ AM survive as a news station where it is labor intensive and will they still be able to keep their association with WBZ TV?

With CBS bowing out will Entercom keep Total Traffic or will they proceed with the new traffic provider for WBZ AM?

How long before the back of house layoffs start? Lots of people got shown the door by Greater Media in the months leading up to the Beasley takeover, I predict the same thing will happen at the CBS properties.


What do you predict?
 
MRBIboredop said:
OK assuming that there are more than 45 stations in the DMA, Entercom will be able to have 8 stations, with no more than 5 on one band.
Click to expand...

That's the key to this. One "nit picking" thing... the limit applies to the MSA (Nielsen's Metro Survey Area), not the DMA. There are no radio DMAs and in PPM markets, there are no TSAs either.

there is also a regulation that limits the percentage of total revenue in the market they can control, and that is 40% IIRC
Click to expand...

That is my recollection, also. I really doubt that a new administration would change that figure immediately, as 40% is near-monopoly status.

My prediction?

On the AM side WBZ AM and WRKO stay, and WEEI AM may stay but only if the revenue limits are not close enough that tossing 850 will keep them from going over.

On the FM side I predict WEEI FM, WBZ FM ( the sports stations) WZLX, WBMX and WODS stay.

That means WKAF and WAAF get tossed.
Click to expand...

That sounds like the proper scenario.

WBZ's lower margins make it a possibility for a spin-off if cluster revenue needs to be reduced to stay under 40%. It's the market's leading biller, but it throws off less cash than some of the music stations.
 
DavidEduardo said:


WBZ's lower margins make it a possibility for a spin-off if cluster revenue needs to be reduced to stay under 40%. It's the market's leading biller, but it throws off less cash than some of the music stations.
Click to expand...

David,

You are obviously a very knowledgeable industry insider, and I, for one, am glad you're here to share your insights. However, please understand that some of us are not insiders and don't know all the jargon. The fact remains that this site is where we can keep abreast of what's happening in a medium we all love. There are no subscriber fees here, and we get to express opinions and ask questions once in a while.

So, would you kindly explain in layman's terminology what it means for WBZ to "throw off less cash than some of the music stations"?

Thank you.
 
nowradioguy said:
So, would you kindly explain in layman's terminology what it means for WBZ to "throw off less cash than some of the music stations"?

Thank you.
Click to expand...

This is more a business issue than a radio one. It's about how much money is left over after expenses... the pre-tax profit on operations (we usually call it cash flow or, more technically, EBITDA, or earnings before interest, taxes, depreciation and amortization).

Talk and news stations cost a lot more to operate than most music stations.

So... a talker might bill $30 million but have expenses of $25 million, with a cash flow of $5 million. A music station might bill $18 million, but have expenses of just $10 million, leaving $8 million in cash flow.

We often express this as "margin" or the percentage of gross revenue we keep after expenses... a music station might have a margin of 30% up to maybe 50%. News talk seldom has a margin of even 30%. But, for an AM station, a 20% margin is better than nothing on a facility that can't be used today for music programming.
 
MRBIboredop said:
OK assuming that there are more than 45 stations in the DMA, Entercom will be able to have 8 stations, with no more than 5 on one band.

there is also a regulation that limits the percentage of total revenue in the market they can control, and that is 40% IIRC

My prediction?

On the AM side WBZ AM and WRKO stay, and WEEI AM may stay but only if the revenue limits are not close enough that tossing 850 will keep them from going over.

On the FM side I predict WEEI FM, WBZ FM ( the sports stations) WZLX, WBMX and WODS stay.

That means WKAF and WAAF get tossed.

How does WBZ AM survive as a news station where it is labor intensive and will they still be able to keep their association with WBZ TV?

With CBS bowing out will Entercom keep Total Traffic or will they proceed with the new traffic provider for WBZ AM?

How long before the back of house layoffs start? Lots of people got shown the door by Greater Media in the months leading up to the Beasley takeover, I predict the same thing will happen at the CBS properties.


What do you predict?
Click to expand...

Remember, the question is what BRANDS stay. Example, 107.3 and 97.7 may go, but the WAAF and new R&B brands could stay and end up on another signal. I predict "Mix & AMP" go away. They are the least profitable brands. All the other brands can work together and compliment eachother. WAAF/WZLX, WEEI/The Hub. WRKO/WBZ, The Urban AC format could potentially be a cash cow.
 
DavidEduardo said:


This is more a business issue than a radio one. It's about how much money is left over after expenses... the pre-tax profit on operations (we usually call it cash flow or, more technically, EBITDA, or earnings before interest, taxes, depreciation and amortization).

Talk and news stations cost a lot more to operate than most music stations.

So... a talker might bill $30 million but have expenses of $25 million, with a cash flow of $5 million. A music station might bill $18 million, but have expenses of just $10 million, leaving $8 million in cash flow.

We often express this as "margin" or the percentage of gross revenue we keep after expenses... a music station might have a margin of 30% up to maybe 50%. News talk seldom has a margin of even 30%. But, for an AM station, a 20% margin is better than nothing on a facility that can't be used today for music programming.
Click to expand...

David,

Very helpful and easy-to-understand response.

Thanks very much.
 
radioface said:
Remember, the question is what BRANDS stay. Example, 107.3 and 97.7 may go, but the WAAF and new R&B brands could stay and end up on another signal. I predict "Mix & AMP" go away. They are the least profitable brands. All the other brands can work together and compliment eachother. WAAF/WZLX, WEEI/The Hub. WRKO/WBZ, The Urban AC format could potentially be a cash cow.
Click to expand...

The one thing to remember is that the cluster your describe would be weak with women. I would keep MIX and move R&B to the AMP signal. It's still possible 'AAF would not count under the Boston cap rule, so only one FM would need divesting. I would bet money 850 goes to iHeart so they can clear their entire line-up of syndication on a decent signal. Revenue caps could matter, but the new administration has committed to deregulating the FCC immediately. It will be fun to watch how this is handled.
 
If 680 or 850 went to iHeart, you could see a blend of national and local talkers.In former, they'd want to keep AMD and PMD the same, but where does Kuhner go, late mornings, if they want to clear Rush live?Then what about Fin Exchange.Hannity could go to 7 pm delayed. Or Ent could keep RKO but iHeart could take 850 and do mostly national talk there with maybe local morning drive.How about iHeart taking an FM or two like 97.7 and 107.3?

Ent.would be in the news biz with WBZ AM..what about a move to FM or simulcast? While CBS does have newsradioBZ on the HD3 of 98.5, they could have used a moderately powerful FM simulcast if they had a station like 101.7...
 
With the announcement of the TDC Communications (Entercom Divestiture) Trust being formed to handle the 14 stations (all FM) nationwide that will have to be divested as part of the merger,
it was revealed that all of the Entercom and CBS Radio FM stations in Boston have been placed in the trust (for now) in order to give Entercom flexibility in which stations it chooses to keep or sell off/swap.

As speculated when the merger was announced on 2/2/2017, 2 of the following Boston FMs will be divested:

Currently owned by CBS Radio:

WBMX - 104.1 - (Hot AC)
WBZ-FM - 98.5 - (Sports)
WODS - 103.3 - (CHR)
WZLX - 100.7 - (Classic Rock)

Currently owned by Entercom:

WEEI-FM 93.7 FM — (Sports)
WKAF 97.7 FM — (Urban AC)
WAAF 107.3 FM — (Active Rock)

As mentioned in this thread, Entercom could conceivably keep the 5 best signals and then decide on the 5 best formats to keep (from a ratings and revenue standpoint).
All depends on what potential deals can be made with other radio owners - their format + signal desires along with possible swaps for stations in other markets.

Story link: http://www.insideradio.com/entercom...cle_28ff2eee-0e4b-11e7-9ecc-ef888eef1bd3.html
Additional info from various sources...
 
Ownership sub-caps of 5 FM's and 3 AM's (or the other way around).....MAY GO AWAY! - There are now 6 radio groups pressuring the FCC to eliminate the "Sub-caps". If that happened, then they could own 8 FM stations (and no AM's). Perhaps that is the reason for the "Trust"... to hold on to them until the FCC changes or eliminates the sub-caps. Then some of the stations in "trust" could be sold back to the parent company. And the current administration is certainly in favor of being kind to big-business.
 
If the cap is expanded they could keep all though could there be an argument that one company would dominate the market's revenues? If they have to sell, would ETM get $ but help to empower competitors like I heart or Cumulus, though latter is not in Boston yet?
107.3 and 97.7 are a bit far away from the city.
93.7 though licensed to Lawrence has their stick in Peabody..not too bad though 98.5's in Newton is slightly closer to Boston. WEEI-FM is helped to the south by 103.7 in RI

104.1 and 103.3..perform well enough to keep?
Might the company aim to get WBZ news radio or even WRKO on FM? Picture a NewsTalk 103.3 maybe w newscasts and a few talk shows.Or is the talk demo too old?
And what about 680 or 1030 if so?

Both sports stations stay.Appeals to different demos, make money, and 5 teams to have games if soccer counted.
 
Yes, I pretty much agree. I think Entercom would keep 93.7, 98.5, 100.7, 103.3, and 104.1, which seem to be the best signals. I'd guess that they would keep all of the formats on those stations the same, with 93.7 and 98.5 competing but both profitable. I think they would sell off 97.7 and 107.3. On the AM side, it's anyone's guess but I would think that 850 costs them the least to keep.
 
A clarification to the stations that *may* be put into the trust came on Wed. morning 3/22/17 via AllAccess.com.
Not all are FMs as previously reported. The list is fluid/flexible and stations can be added/subtracted at any time
pending any transactions that may occur before the merger goes into effect.

http://www.allaccess.com/net-news/a...com-cbs-list-stations-potentially-to-be-spun-

Possible Entercom stations:

Rock WAAF/WESTBOROUGH-BOSTON, MA;
Urban AC WKAF (THE NEW 97.7)/BROCKTON-BOSTON, MA;
News-Talk WRKO-A,
Sports WEEI-A (ESPN 850) and
Sports WEEI-F/BOSTON

Possible CBS stations:

News WBZ-A,
Top 40 WODS (103.3 AMP RADIO) and
Hot AC WBMX (MIX 104.1)/BOSTON
 
@bostonradio tweeted earlier today:
All ETM/CBS Radio stations in Boston are going into trust. One caveat, CBS ones can't be swapped/sold until after the close
 
raccoonradio said:
@bostonradio tweeted earlier today:
All ETM/CBS Radio stations in Boston are going into trust. One caveat, CBS ones can't be swapped/sold until after the close
Click to expand...

Since no one asked, I can't help wonder if the good folks over at CBS Radio Boston are running around and saying, "Entercom happens!"

That might indicate Howie Carr is, perhaps, right in more ways than one. :cool:
 
I wouldn't expect Entercom to unload the lowest rated stations in Boston because the Department of Justice has a "second request" to ensure Entercom stays within the 40% revenue cap. Since both sports stations in Boston are billing pretty well, I would likely expect the Department of Justice to require Entercom letting go of one of the sports stations.
 
Entercom's divestitures in Boston have been officially announced. As I've long predicted, Entercom is divesting the WBZ stations, along with WZLX, WKAF, and WRKO.
 
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