Westinghouse Electric Corp., owner of CBS, said yesterday
the company will buy Infinity Broadcasting Corp. for $3.9B,
creating the largest player in the radio business. The combined
group would own 83 stations nationwide, but would be "especially
strong" in the nation's top markets, according to Paul Farhi of
the WASHINGTON POST, particularly New York, where it would own
seven stations accounting for 36% of all radio ad spending.
Overall, according to radio industry tracker BIA Publications,
stations owned by Westinghouse and Infinity accounted for $973.5M
in ad revenue last year, or 30% of the $3.3B in ad spending in
the cities in which they will operate. Execs in the two
companies and industry watchers expect the deal to receive
regulatory approval (WASHINGTON POST, 6/21).
THE VIEW FROM BLACK ROCK: Westinghouse Chair & CEO Michael
Jordan: "As we looked further at this business, we assigned
radio as the number one developmental priority for us because of
the dynamics of the industry" ("Moneyline," CNN, 6/20). While
the deal is seen by most as a positive move, other observers
noted Westinghouse's continuing need to "boost its broadcasting
business" -- particularly cable. But Jordan defended their
strategy, saying they like "the station piece of the business"
and that they are better off than "content providers" (Norton &
Jensen, WALL STREET JOURNAL, 6/21). In New York, Gregory
Zuckerman calls it a "risky bet": "The goal is usually to buy
low and sell high. Not to buy high and hope things go still
higher" (N.Y. POST, 6/21). USA TODAY's Davis Lieberman notes the
Infinity deal leaves CBS with "less flexibility for a major TV
play." CBS President Peter Lund: "I don't suppose we're going
to do another $5 billion deal next week" (USA TODAY, 6/21).
OTHER REAX: FCC Commissioner James Quello said they would
take a "hard look" at cities (Boston, Philadelphia) where the new
entity would control 40% or more of the ad market (N.Y. TIMES,
6/21). Infinity stock was up 1/2 to 29 1/8, while Westinghouse
was down 3/4 to 18 1/8 ("Business Insiders," CNBC, 6/20). One
source familiar with the deal: "Westinghouse is looking for
drive-time, sports, news and female 25-54 oriented music stations
such as the 'KISS' franchises. With the Infinity buyout, they
get everything they want and need" (INSIDE MEDIA, 6/21). WSJ's
Sally Goll Beatty notes the deal "has set off alarm bells
throughout the advertising industry" (WALL STREET JOURNAL, 6/21).
KEY SPORTS STATIONS: INFINITY: New York's WFAN-AM (sports
talk, Rangers, Knicks, Jets, Mets); S.F. Bay Area's KFRC-AM
(Sharks, A's) and KYCY-FM (Raiders); Washington's WJFK-FM
(Redskins); Boston's WBCN-FM (Patriots); Detroit's WXYT-AM/WOMC-
FM (Lions); Philadelphia's WIP-AM (sports talk, Flyers, 76ers)
and WYSP-FM (Eagles); Dallas' KVIL-FM (Cowboys); Atlanta's WZGC-
FM (Falcons); Tampa/St. Pete's WQYK-FM (Bucs). WESTINGHOUSE:
Chicago's WMAQ-AM (Bulls, White Sox) and WSCR-AM (sports talk);
Boston's WBZ-AM (Bruins); Detroit's WWJ-AM (Pistons); Houston's
KILT-AM (sports talk, Astros); Philadelphia's WGMP-AM (Phillies);
Minneapolis' WCCO-AM (Twins); Pittsburgh's KDKA-AM (Pirates); St.
Louis' KMOX-AM (Cardinals, Blues). ALSO: Infinity will handle
production for N.Y. Giants broadcast on WOR-AM, which it does not
own. Infinity-owned stations in Baltimore are candidates for
Ravens' rights (THE DAILY).
