Originally, the plan was for Entercom to recognize $25 million in cost-saving synergies from its merger with CBS Radio. Entercom CEO David Field has hinted in previous earnings calls that there was a possibility that could go higher, but this increase was massive.
On his Q3 earnings call, Field quadrupled that number to $100 million. In fact, the company expects even more than $100 million but plans to use some of the money over $100 million to reinvest in the company. So where are the savings going to come from?
About 11% of the savings will be recognized from overlap in corporate. There were eight overlapping markets, where both companies owned stations, so redundancies in those markets can be eliminated, management teams can be combined, perhaps buildings can be consolidated.
CFO Richard Schmaeling says the company will recognize these cost-synergies within 18 months of closing.
Within teams made up of Entercom and CBS people and outside consultants spent over four months working on plans to address the synergies between the two companies.
