Updated at 12:20pm Eastern on March 21 to reflect new information regarding the necessary divestments Entercom will make in order to meet FCC ownership requirements.
The tax-free Reverse Morris Trust-fueled merger between CBS Corp.‘s CBS Radio and Entercom Communications has officially been put into motion at the FCC.
According to an SEC filing made by CBS late Monday (3/20), both CBS Corp. and Entercom have filed series of Form 314 and Form 315 asset transfer applications with the Commission. These forms are needed to officially get the FCC’s approval of the license transfers — a task seen for every radio and TV deal moving from one party to another.
With the Form 314 and Form 315 filings, it was made known that CBS President/CEO and Chairman of the Board Les Moonves and CBS COO Joe Ianniello are proposed to be directors of Entercom following the merger of CBS Radio with the Philadelphia-based company — but only for a limited time.
Both Moonves and Ianniello will resign from the Entercom board either six months after closing, or the day before the first Entercom annual meeting following the merger’s closing — whichever date comes first.
Although their presence on the Entercom board is temporary, as officers at CBS this would give Moonves and Ianniello the so-called “attributable interest” that requires a green light from the Commission. As a result, CBS Corp. and Entercom have asked the FCC for a temporary waiver — not to exceed six months — of the FCC’s rules restricting radio-television cross-ownership for the executives in no more than four markets “for the limited period” that they will serve the board.
Meanwhile, Entercom and CBS Corp. reiterated that the merger of CBS Radio with Entercom is expected to result in Entercom exceeding the FCC’s local ownership rule in seven markets.
To comply with the Commission’s rules, Entercom confirms that it is divesting a total of 14 radio stations. These stations are located in the Boston, Los Angeles, Sacramento, San Diego, San Francisco, Seattle, and Scranton-Wilkes Barre markets.
What stations will be divested have been the subject of speculation among many radio industry executives and observers. While language states that “no stations owned by CBS’s radio business will be divested prior to the closing of the merger,” any and all stations in the seven designated markets are up for divestment and this could involve seeing the CBS or Entercom stations earmarked for sale going into the hands of a divestiture trustee.
This individual “will be charged with operating and promptly divesting the radio stations following the closing of the merger.”
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