CBS Corp. will spin off its AM/FM radio business, CBS Radio, which filed for an initial public offering of $100 million on Friday.

Plans for CBS to divest itself of CBS Radio to focus on its TV business were first outlined in March, when the parent company was gearing up for either a spinoff or a sale of the division.

The SEC filing does not detail the number of shares to be sold or the share price, but CBS believes it will be "a very well-capitalized company" after it spins off the radio division and completes the offering. The fundraising target, however, is likely to change.

Before going public, CBS Radio intends to take on debt and give the proceeds to CBS. It will also hand over part of the proceeds of the IPO to the parent company, while the remainder from the stock sale will be used to cover for the new entity's needs.

The preliminary filing reveals CBS will offer its stocks left over from the radio unit and buy back its own common shares, the way it did in 2014, when it also spun off its outdoor advertising business.

CBS Radio Faces Ad Revenue Decline

For years, the media corporation was convinced terrestrial radio was integral to its business. The plan to establish CBS Radio as an independent entity now comes at a time when traditional media outlets face intense competition from digital rivals.

CBS Radio reaches an audience of 70 million across 26 markets in the U.S. The unit operates 117 stations, some of which began airing in 1927, just as the Columbia Broadcasting System was taking root. For a time, the radio division was seen as a dependable profit stream for CBS. But times have changed.

Alongside the $484 million writedown on the value of its licenses in the fourth quarter of 2015, CBS Radio has also seen revenue from advertising decline. Last year, it registered $17.4 billion in radio ad sales. That number was closer to $20 billion prior to the financial crisis.

Fierce Rivalry From Digital Media

The ubiquity of radio as a medium is overshadowed by the rise of digital media. Listeners who once enjoyed traditional AM/FM talk shows, which go on air at specific times, now have internet radio, like Pandora, and podcasts that they can stream anytime and from anywhere in the world.

And those accustomed to listening to music on commercial radio can now enjoy a more extensive library of songs, without being interrupted by advertisements, for a minimal subscription fee on platforms like Spotify and Apple Music.

CBS' move to rake in proceeds as it jettisons CBS Radio will allow the parent company to "take advantage of our strong assets, scale and competitive strengths to grow our business."

Photo: Kristin Dos Santos | Flickr