A commentary on the CBS-Entercom merger in the US
So as everyone knows, that follows media in Canada and the US, that the merger of CBS and Entercom was completed Friday. It was almost immediate that the effects of that merger were felt, not necessarily in layoffs, although I am sure those will come, but in format changes. 92.3 Amp Radio was the first format change I heard about, it flipped to ALT 92.3 bringing Alternative back to New York City for the first time in 6 years. In Seattle Country 94.1 KMPS dropped its format for Christmas Music. By making the move from Country to Christmas, it leaves Entercom owned 100.7 The Wolf as the only Country station. Country 94.1 was a CBS owned station before the merger. In Dallas AMP 103.7 also flipped to ALT 103.7 bringing Alternative back there for the first time in a year. 104.3 K-Hits WJMK Chicago was a CBS station and it was flipped to Classic Hip-Hop 104.3 Jams.
As part of the deal to get final approval for the massive merger, there had to be smaller deals. It consolidated operations in Seattle as well as brought a new entrant to the Sacramento and San Francisco markets, and added the two new markets for Entercom. Entercom earlier this month finalized all of its necessary divestitures to complete its merger with CBS Radio. In the process it will completely change the holdings of the big three operators in Boston, consolidate operators in Seattle, bring a new entrant to Sacramento and San Francisco, and add two new markets for Entercom.
In Seattle iHeartMedia adds Variety Hits 96.5 Jack-FM KJAQ, Classic Rock 102.5 KZOK, and Sports The Fan 1090 KFNQ. They will also be divesting Alternative Alt 102.9 KFOO and Rhythmic CHR 104.9 KUBE. Last year iHeartMedia shuffled 4 stations including moving KUBE from 93.3 and adding ALT 102.9. Now the cluster has solidified its standing with female audiences in the market. With the addition of KJAQ and KZOK to existing Rock leaning Classic Hits 95.7 The Jet KJR-FM. It looks as though 96.5 will flip from Jack to a country station now that 94.1 has dropped country to Christmas music leading to a new format just after Christmas.
In its swap with iHeartMedia, Entercom enters two new markets, Chattanooga TN and Richmond VA. This was a deal that looks like it makes little to no sense only because it is a 7 for 10 swap. In an SEC filing last month it did state that Entercom would receive $265 million in cash from these divestitures. iHeartMedia has limited cash flow right now and has stated that they can only survive another year or so unless things change, so I would assume that there are more stations that will get sold off. We know that Alt 102.9 and KUBE from the Seattle market are being sold. With Entercom taking over stations in Chattanooga and Richmond, they will need to staff the stations as iHeart transferred many of the staff out or let go of others. Chattanooga has Country station US101 WUSY which is one of the markets top stations. It will be a smaller market for Entercom but it gives them a chance to possibly purchase other stations over the next year.
In Boston iHeartMedia acquired CBS Radio’s News/Talk 1030 WBZ, Classic Rock 100.7 WZLX and Entercom’s Talk 680 WRKO and Urban AC The New 97.7.WKAF. These changes now gives iHeartMedia a full cluster of stations in the Boston Market and they will be divesting 1430 WKOX.
Beasley Media in Boston swaps WMJX and $12 million cash for Sports 98.5 The Sports Hub WBZ-FM. WMJX being divested for WBZ seems like it is a mistake, as WMJX is a much stronger station. Does better in the ratings and is a bigger name then WBZ-FM, however its a destination for advertisers with the rights to the Patriots, Bruins, and Celtics.
Entercom has long built an audience with male listeners in Boston with Sports 93.7 and Rock 107.3. They still operate those stations but will now instantly gain more female listeners with AC station Magic 106.7 WMJX from Beasley and Hot AC Mix 104.1 WBMX and CHR 103.3 Amp Radio (which may flip to ALT 103.3) both from CBS.
In Sacramento Bonneville is operating 4 out of the 5 CBS stations. AC KYMX Mix 96.1, HOT AC KZZO,100.5 NOW 100, Sports KHTK 1140 and Country KNCI 105.1
Lastly in San Fransisco Bonneville will be operating AC 96.5 KOIT, Top 40/CHR KMVQ 99.7 NOW, Urban AC KBLX 102.9 and Classic Rock KUFX-FM K-FOX 98.5
Both Sacramento and San Fransisco clusters will be operated by Bonneville under a local marketing agreement with the Entercom Divestiture Trust, on completion of the Entercom/CBS merger, and subject to FCC approval and other customary conditions.
I anticipate that once the dust settles the flips on Friday are the start. iHeart, Beasley and Bonneville are taking over new stations and Bonneville is entering 2 new markets. 2018 is shaping up to be an interesting year in US radio. I also firmly believe there will be more stations sold by iHeart in certain markets. I am certain that when the Christmas season wraps up we will see a lot of changes to formats then as well as a few more over the coming weeks. Also get ready to hear all the news of certain syndicated shows moving into new homes that may now be a better fit.
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