Things are pretty serious at every radio broadcast company across the country. Entercom has gobbled up the CBS stations via a Reverse Morris Trust transaction, which was a great deal for the Sumner Redstone and his family, and a HUGE deal for Entercom, as the acquisition makes them the second largest radio broadcast owner, behind iHeartMedia.
iHeart has made some moves that would make the naked eye believe that they are planning a trip to bankruptcy court, as soon as mid-year. Cumulus is already going through bankruptcy proceedings, something that CEO Mary Berner has been through before when she was the CEO of Reader's Digest.
Here are the facts. Cumulus will re-emerge from bankruptcy. iHeart may never see bankruptcy, because they have enough assets to fill the gaps where needed. Beasley is in an excellent cash flow positions, mainly due to smart investments. Entercom is in a great situation, which they were before the acquisitions, but the earnings from the acquisitions made the books look even better. Don't let Entercom buying CBS fool you.
Radio is about to experience a seismic shift, where larger companies will begin spinning off their radio stations, mostly in smaller markets. iHeart could start doing this any day now. After Cumulus emerges from bankruptcy, you can expect them to do the same with underperforming properties. This will open the door for some smaller operations to form, kind of like things were back in the 70's and 80's.
Late last week, Tegna announced its entry into the radio and television world in the San Diego area. They have also vowed to keep the TV and radio stations together. This is the type of operation that will materialize eventually across the country, as the larger companies start selling their stations.
Let's end with a final thought. Radio Is Alive! We are breathing, but from time to time, we need the paddles. That said, there isn't one of us that could imagine doing anything else in our entire lives.