A second financial blow for struggling CBS Radio

In the last 18 months, CBS Radio has lost two of the most influential, provocative and lucrative talk show hosts in radio history. And with them, loads of money and profit.

First, Howard Stern defected to satellite radio in December 2005. The shock jock’s departure cost CBS an estimated $100 million in annual revenue and was a major reason behind the company’s 7% drop in sales in 2006. His replacements haven’t come close to bringing in the estimated 12 million listeners Stern attracted every day.

Thursday’s firing of Don Imus will be another big hit for the struggling radio division of the vast media company.

“It’s going to be painful,” said Tom Taylor, editor of the trade publication Inside Radio. “CBS will survive, but it’s going to really hurt.”

CBS won’t comment on its financial agreements, but Imus may have generated as much as $15 million for CBS and $100 million or more for the 61 stations that carried the morning program, according to Michael Harrison, editor and publisher of Talkers Magazine.

But as CBS went into high-spin mode over its decision to can Imus, company executives tried to cast doubt on those figures, which have been widely reported in the press. Imus was profitable, they said, but not a huge moneymaker.

Program revenue was about $18 million to $20 million a year, according to a person familiar with the finances. But the profit to CBS was less than $3 million a year, this person said.

At least one media analyst’s evaluation supported CBS.

“CBS won’t miss the I-Man’s impact on the bottom line,” wrote Jonathan Jacoby, a Bank of America securities media analyst. He estimated that Imus’ morning show on WFAN-AM in New York, and syndication across the country, generated about $11 million in annual revenue -- numbers that would account for less than 1% of CBS’ pretax earnings for 2006.

It’s also unclear whether CBS will have to pay Imus to end his contract early. Imus recently negotiated a new five-year contract that reportedly paid him $10 million a year.

Legal action could be next.

“It depends on Don and his advisors, but we could be entering a legal phase,” Taylor said. “He’s a man of great pride, and this has to have wounded him. I haven’t seen anything like this in radio, ever.”

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