The potential merger between Entercom and CBS Radio looks to be one step further to fruition.
Entercom announced a series of agreements in connection with its efforts to merge with CBS Radio. Among those announcements are a newly announced settlement with the U.S. Department of Justice, new asset exchange agreements with iHeartMedia and Beasley Broadcast Group, and the acceptance of new local marketing agreements (LMAs) with Bonneville International.
Pending approval from the Federal Communications Commission, Entercom said it now expects to see its proposed combination with CBS Radio close as early as Nov. 17.
“Today’s announcements mark a significant milestone as we work to complete the transformational combination of Entercom and CBS Radio,” said Entercom President and CEO David Field.
Of immense interest are those stations expected to be divested to ensure that the finalized merger meets FCC regulatory rules. In all, Entercom is required to divest 13 radio stations in order to proceed with its acquisition, according to the Justice Department’s Antitrust Division, though Entercom and CBS announced it planned to divest a total of 19 stations.
In his statement, Field said that it will be “difficult” to part ways with so many strong brands and their talented people, but “it is necessary to divest certain stations in order to secure regulatory approval.”
“The required divestitures will protect competition for local businesses that advertise on radio stations in Boston, San Francisco and Sacramento,” said Assistant Attorney General Makan Delrahim of the Justice Department.
Including the previously announced decision to divest three stations to Educational Media Foundation, Entercom and CBS Radio will divest a total of 19 radio stations in the markets of Boston, Los Angeles, Sacramento, San Diego, San Francisco, Seattle and Wilkes-Barre, Pa. In addition, Entercom will receive 10 stations in the Chattanooga and Richmond, Va., markets from iHeartMedia.
IHeartMedia will receive four stations in Boston (WBZ-AM, WZLX-FM, WKAF-FM and WRKO-AM) and three stations in Seattle (KFNQ-AM, KJAQ-FM and KZOK-FM). For its part, Entercom will receive six stations in Richmond (WBTJ-FM, WRNL-AM, WRVA-AM, WRVQ-FM, WRXL-FM and WTVR-FM) and four stations in Chattanooga (WKXJ-FM, WRXR-FM, WUSY-FM and WNLD-FM); these are new markets for the company, Field said. The iHeartMedia transaction is expected to close in the first quarter of 2018.
In a smaller asset swap, Beasley will receive WBZ(FM) in Boston, while Entercom will receive WMJX(FM) and $12 million in cash from Beasley. That transaction is expected to close in the first quarter of 2018.
Under the terms of the newly announced LMA, Bonneville will program four stations in San Francisco (KMVQ-FM, KBLX-FM, KOIT-FM and KHTK-FM) and four in Sacramento (KHTK-FM, KNCI-FM, KYMX-FM and KZZO-FM). This LMA is expected to become effective upon closing of the Entercom and CBS Radio merger.
It was back in February that Entercom announced an agreement to combine with CBS Radio in an all-stock transaction that would give Entercom a nationwide footprint of 235 stations.