Disney to Sell Radio Stations?
Report: Disney Considering Radio Spinoff
By Associated Press
July 12, 2005, 2:18 PM EDT
NEW YORK -- The Walt Disney Co. is considering a multistep transaction that would result in a spin-off of its radio stations and radio network group, The Wall Street Journal reported Tuesday.
Disney has long been believed to be considering an exit of the radio business ever since it acquired the stations and network in its 1996 purchase of Capital Cities/ABC, which also brought Disney the ABC and ESPN television networks.
Disney may still hold onto the radio group, which consists of 71 stations and a separate radio network. But with Robert Iger in line to take over from longtime CEO Michael Eisner in October, Disney could be in a position to make new plans for its role in radio.
A spokeswoman for Disney's radio business declined to comment on the Journal story.
The Journal reported that the deal could be structured as a so-called "reverse Morris Trust," in which the company would transfer debt to the entity, take some cash out, and then spin off and merge the business with another radio company. The deal would be structured so that Disney shareholders would own more than half of the new company's equity after the transaction, the paper said.
Disney does not break out separate financial figures for its radio business, but analysts believe the company makes about $700 million a year in revenue from radio, and that the Disney properties are growing faster than the overall radio industry. Analysts believe Disney's radio properties could be worth about $3 billion.
The Journal said interested bidders could include Citadel Broadcasting Corp., Entercom Communications Corp., and Emmis Communications Corp