4-10-2012
Nothing makes an employee feel more relaxed about the stability of ownership more than when the company doles out millions of dollars to build a new facility, right? Well, maybe not. Just weeks ago, the CBS management in West Palm Beach held a party to show off its newly constructed facilities (see pictures below). Yesterday, CBS announced the entire cluster will be sold to Dean Goodman, the owner of WRMF-FM in West Palm, for $50 million. Goodman also owns 27 stations in Iowa and Missouri under the name GoodRadioTV.
CBS says selling off the West Palm Beach cluster solidifies its game plan to stay focused on major markets. West Palm Beach is the number 48 market, according to Arbitron. CBS has previously sold off radio stations in Portland, Ore. (market No. 23) and Denver (market No. 20). CBS has owned the West Palm Beach market for over a decade. WEAT and WIRK were acquired in 1998. WPBZ and WMBX in 2000 and WHFS in 2001.
Senior Wells Fargo analyst Marci Ryvicker was quick to salute the deal. "We believe the sale price
represents a low double-digit multiple. Per our estimates using BIA data, we believe that the multiple on this deal was in the low double digits, which is higher than recent transactions to date (which have been between 8-9x). We believe that this was a sale of opportunity and is consistent with CBS' strategy of paring its smaller market stations in order to focus on large markets. We believe this is a tax-efficient move. Recall that CBS recently bought WLNY, a TV station in Long Island, for $55 million. We believe that, should the closing of today's radio station divestiture happen relatively quickly, these two transactions could offset, resulting in favorable tax efficiencies. Bottom line: We view this sale as a smart strategic and financial move - and shows CBS Radio's ability to monetize its valuable assets. We do not expect significant M&A going forward but would not count out other opportunistic divestitures. We reiterate our Outperform rating."
Here are a few shots of the recently built 
CBS facilities in West Palm Beach.
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