The New Entercom: Not A Direct Asset Sale

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By Adam R Jacobson
RBR + TVBR


CBS-Radio-LogoThe tax-free merger between the fourth-largest radio broadcasting company in the U.S. and CBS Radio, announced early Thursday (2/2), will give the newly enlarged Entercom Communications a presence in 23 of the top 25 markets.

Closing is expected in the second half of 2017.

It creates a powerful player set to compete directly against Cumulus Media and iHeartMedia in key markets including Los Angeles, New York, Dallas-Fort Worth, San Francisco, Atlanta, and Washington, D.C.

RBR + TVBR crunched the numbers, and the transaction is valued at approximately $1.49 billion, based on the current value of Entercom shares — plus any assumed debt that Entercom will be assuming.

The deal with Entercom is not wholly unexpected, with rumors swirling as far back as May 2016. But, as one media broker notes, this transaction could only happen thanks to a rarely used maneuver that eliminates a tremendous tax bill — the “Reverse Morris Trust.”


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