CBS Radio in predicament after firing Imus

By Paul Thomasch

NEW YORK (Reuters) - CBS Corp. bowed to public pressure and fired shock jock Don Imus on Thursday, walking away from its best-known radio personality and millions of dollars of advertising revenue,

The media company had found itself in a tricky position since Imus called members of the Rutgers University women's basketball team "nappy-headed hos" on his April 4 show, sparking a public and political outcry.

If CBS kept Imus, it would have faced a public relations nightmare and the show may never have attracted the caliber of guests and advertisers that had made it so valuable.

But now CBS must find a way to replace the sponsorship and recognition that Imus brought to a radio division that had yet to recover from the loss of Howard Stern to Sirius Satellite Radio Inc. last year.

Revenue from radio, the third-largest source for CBS after TV and outdoor advertising, fell 7 percent last year to $1.96 billion.

"They may be about to find themselves in a familiar, maybe worse, predicament. They had a year and a half to prepare for Howard Stern's departure and still could not find a viable replacement," said Holland Cooke, a news talk specialist with radio programming consultants McVay Media.

CBS had initially only wanted to suspend Imus but finally fired him after a slew of advertisers from General Motors Corp. and Procter & Gamble Co. pulled their commercials from his radio and TV shows.

In announcing the decision, CBS Chief Executive Leslie Moonves said he had been "deeply upset and revulsed by" Imus' statements about the basketball team.

CBS Radio will lose about $15 million in annual advertising and syndication fees it received from "Imus in the Morning," a source close to the show said.

The firing came a day after NBC Universal pulled its simulcast of the show on MSNBC, which had been paying CBS another $3.5 million to broadcast the show, the source said.

The cancellation of "Imus in the Morning" is effective immediately. The show was carried on 61 stations across the United States.

"CBS will take heat one way or the other, but they will survive," said Michael Harrison, editor and publisher of Talkers, a trade publication on talk radio and television.

As for Imus, he said, "I think his career has been severely damaged."

Some analysts said Imus could look to follow Stern and others to subscription-based satellite radio.

"Satellite radio companies are not ad supported to the same degree, and often are not held to the same public interest standard as the terrestrial radio companies are," said Oppenheimer analyst Thomas Eagan. "He has a loyal following and that could make him attractive to satellite radio."