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CBS to Sell Radio Stations

Sandy Brown

CBS (CBS Quote) plans to divest itself of 35 small market radio stations, CEO Les Moonves says.

Moonves said that the move would allow the company to focus on improving performance at its bigger radio properties. The news comes as CBS Radio struggles with sliding ratings following Howard Stern's departure for Sirius (SIRI Quote).

Moonves made the remarks Wednesday at CBS' annual TV Upfront presentation in New York. Management had previously announced its intention to sell some noncore radio properties.

In contrast to ongoing strength in television, where revenue rose 5% during the last quarter to $2.5 billion, CBS Radio has struggled. In late April, the company reported that for the quarter ended March 31, revenue at its radio division dropped 6% from a year ago to $434.5 million.

Ratings at its 179 stations have taken a hit since Stern left in December for Sirius. Replacement David Lee Roth failed to draw listeners and was swiftly dismissed in favor of the shock jocks Opie and Anthony, who also broadcast on XM Satellite (XMSR Quote). CBS had canned their act in August 2002 after they aired a live account of listeners having sex in St. Patrick's Cathedral, the Associated Press reported. Opie and Anthony are heard on CBS Radio in seven big markets now.

Asked about other possible moves, Moonves said Wednesday that the sale of the Paramount theme parks is attracting interest from both strategic players and private equity. He declined to specify the interested parties; a deal is expected later this year.

CBS and sibling Viacom (VIA Quote) split into two separately traded companies as 2006 opened. Chairman Sumner Redstone orchestrated the split as a way to appeal more directly to growth and value investors.

CBS, where outdoor and radio spins off a lot of cash, was designed as the value side of the media business, while Viacom, with its MTV Networks, was designed to appeal to growth investors. But the market has been kinder to CBS since the split: CBS shares are flat for the year, while Viacom shares are down close to 10%.

Moonves also discussed the ongoing importance of the broadcasting networks within larger media companies during his presentation at Carnegie Hall. He pointed to last quarter's earnings results at his company along with Disney's (DIS Quote) ABC and News Corp.'s (NWS Quote) Fox as an indicator of the ongoing importance of traditional broadcast television in the asset mix.

CBS unveiled a strong schedule for the upcoming season. The network was praised by numerous media buyers afterwards who touted the network's scheduling stability. Returning shows that have built-in audiences are looked upon favorably by advertisers. Where ABC has a couple of hits, CBS has a broader swath of popular shows throughout the week.

Shares of CBS were down 25 cents Thursday to $25.55.