CBS-Infinity Deal Puts Bigger Grip on Radio Market
Roeder, David, Daily Herald (Arlington Heights, IL)
Byline: David Roeder Daily Herald Business Writer
CORRECTION/date 6-22-96; It was erroneously stated that Howard Stern has no local outlet. His program runs on WJJD 1160-AM.
CBS, the one-time Tiffany Network, joined the company of "shock jock" Howard Stern on Thursday in a merger that creates a corporate king in Chicago radio.
Westinghouse Electric Corp., the parent of CBS, said it is buying Infinity Broadcasting Corp., which syndicates Stern, for $3.9 billion. The deal fuses the nation's two top corporations in radio broadcasting into a conglomerate controlling 83 stations.
That's a small chunk of the roughly 10,000 radio stations in the country, but the stations in the deal are mostly in the top 10 markets.
In Chicago, the Westinghouse-Infinity combination covers 10 stations commanding almost a third of the local listenership. They include the market's two all-news stations and others with such formats as country, sports talk and classic rock.
Five of the stations are among the top 10 in ratings.
The deal puts Westinghouse over an eight-station ownership limit that federal law applies to local markets. Hence, two will have to be spun off.
But radio sources said Westinghouse still has gained undisputed leadership in competition for radio ads. Stations here are unlikely to get wholesale format changes because they appeal to different demographic groups, they said.
Longtime broadcaster Bruce DuMont, president of the Museum of Broadcast Communications, said the deal should not reduce airwave diversity.
"They are smart business people at Westinghouse and they know it would be foolish for everything to sound alike on the radio," he said.
"It'll give Westinghouse a lot of clout in the marketplace here," said Reed Pence, vice president of Deerfield-based Mediatracks Inc., a producer and syndicator of radio programs. "If you want a significant share of the market, you'll have to go through them."
"It's a case of the rich getting richer," said Jay Berman, president of a media buying firm, Berman & Associates Inc. in Northbrook. He predicted Westinghouse will save money by consolidating the stations' business functions and possibly sharing some on-air talent.
He said he doubts the market will permit Westinghouse to use its dominance to raise ad rates.
"Radio is still very competitive. It's all about market share," he said.
Asked about changes in the radio stations at a New York news conference, Infinity founder and President Mel Karmazin quipped, "I think the biggest change you'll see is a lot more revenues."
Karmazin, who will become chief of the combined company's radio stations, and Westinghouse Chairman Michael Jordan said the ownership concentration in top markets will allow for cost-cutting. …