It is in discussions to sell the division for a proposed £12.5m to a new company formed by the division's senior management.
The division is forecast to post a higher-than-expected loss of £4.5m, while the fortunes of the radio and music divisions have improved slightly.
In a trading update, Chrysalis said radio advertising bookings for September have shown a "marginal" year-on-year improvement.
Radio companies have had a difficult time over the past six months and a recent forecast from Carat predicted that the medium will be the only one not to see advertising growth this year.
Chrysalis is believed to be a takeover target for overseas media companies interested in the UK radio sector, such as Emmis Communications of the US.
However, its management have maintained their desire to expand rather than be bought, in a consolidating radio sector that has seen GWR and Capital merge into GCap and Emap pick up Scottish Radio Holdings.
The company is believed to have made an unsuccessful approach for Guardian Media Group's radio division earlier this year.
However, it was boosted in May when it bought Capital Radio's East Midlands station 106 Century FM, which Capital had to sell off for the GWR merger to get the green light. It is rebranding the station as Heart FM, which already broadcasts to the West Midlands.
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