Cumulus stock worth less than a candy bar !!!

TheBigA said:

Anything is better than nothing, which is what they're doing. I've always been taught to diversify your business and investments, and they're not doing that. But then again, they have no money to invest, so it doesn't matter. That's why Lew is gone. He blew his $2 billion on transmitters and towers. Compare that with what Entercom did. Who made the wiser use of investment money?

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Let's say you're Lew "Big A" Dickey. It's 2010. What would you have done differently besides NOT create $2B in unsustainable debt? What would your digital strategy be? Would you have done Sweetjack, NASH, WW One, the Citadel deal, etc.?
Who, in your opinion, does digital the best? NTR?

wavo said:

Who, in your opinion, does digital the best? NTR?

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Townsquare, iHeart, and CBS. That's it. Cox is starting to invest in digital content, but they're a little late to the party.

I think they made a mistake buying Citadel. There's a reason they went bankrupt, and I don't think those reasons have been completely fixed. They're still struggling with a lot of the former ABC stations. In my view, the original core of Cumulus was a sound business operation until that purchase. But they needed more major markets, and that was the only way to buy in.

wavo said:

Good point!
Had I bought those couple thousand shares two days ago I would have seen a two day profit of over 15%.
Have you (Big A) bought any Cumulus shares at the (before the split) price of $0.15/share?
Where do you see Cumulus one year from now?

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I own a fair chunk of Cumulus stock. It's small enough that if they go bankrupt I won't cry too much, but if they get back to $3 or so (post-split adjusted) it would become a tidy profit.

I said when Mary Berner became CEO that she would have 12-18 months to turn the company around. It seems like she has had modest success. The main question for Cumulus is paying down their debts. Unless they swing back to an operating loss, or have a large debt obligation called in, Cumulus should be in better shape than they are now, which should increase the stock price. But those risks are substantial.

TheBigA said:

Townsquare, iHeart, and CBS. That's it. Cox is starting to invest in digital content, but they're a little late to the party.

I think they made a mistake buying Citadel. There's a reason they went bankrupt, and I don't think those reasons have been completely fixed. They're still struggling with a lot of the former ABC stations. In my view, the original core of Cumulus was a sound business operation until that purchase. But they needed more major markets, and that was the only way to buy in.

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That's all true. Cumulus' first foray into major markets was the Susquehanna purchase.

wavo said:

There is a part of me that says I should buy a couple thousand shares of Cumulus stock...

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Had you done that this morning, when you posted this, you would have made 5% today. The stock closed Friday at $1.17. Yesterday morning, when this thread started, it was under a dollar. Those who bought it yesterday are makin' money! Sell now!

jabba17 said:

They invested in Rdio, which is now kaput. I had thought that Cumulus was going to turn Rdio into an iHeartRadio competitor once their exclusive streaming deal with iHeartRadio ran out. Speaking of that deal, where Cumulus made iHeartRadio the exclusive streamer of Cumulus stations in exchange for iHeartClearChannel stations promoting SweetJack, was obviously a much better deal for iHeartClearChannel than Cumulus, now that there's not much left of SweetJack (now Sweet Deals).

How much time is left on the Cumulus agreement with iHeartRadio? I'd like for Cumulus stations to also be streamable on TuneIn.

If you want to make money on CMLS in the foreseeable future, I guess you could day-trade it like a penny stock. Caveat emptor.

SweetJack got killed when the Groupon daily-deal/online-coupon ship was swamped by all of the other established media companies invading that space, like Gannett (Value Clipper, Local Flavor, etc.) and Cox (Valpak) that already had a dead tree coupon presence and for which digital was a logical extension. Cumulus could have made SweetJack a contender with a radio+online advertising model, but they didn't bring anything new to the table vs. entrenched incumbents like Gannett/Cox or dangerously desperate digital pure-plays like Groupon.

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Good post!
This is why I asked the question...where exactly would you make the "digital "pathway?" I get Big A's point that "anything is better than nothing" but Jabba also makes the point that Lew made the WRONG digital effort(s) which contributed to his removal. Lew Dickey may have been, much like President the donald, a great deal maker, but you MUST make the correct deals or else....
For everyone who lurks on this board who has been around the block a time or two...where next with digital and NTR? iHeart has made, *probably* the correct first moves but we are still in the first inning. Where next?

Could Cumulus develop an iHeartRadio clone, once their agreement with iHeartClearChannelMedia runs out? Do like Clear Channel did--start with streaming existing stations, and then add interactive services and narrow-format online-only channels. Once a new Cumulus "CloudRadio" app gets critical mass, pull streaming of Cumulus stations from iHeartRadio. I don't think the barrier to entry is that great--just get your listeners to download another app--although the folks at CBS might disagree since radio.com and last.fm haven't really made that big of a splash. But then again, CBS hasn't done that much with either. The trick will be to get streaming into cars, home stereo receivers, and other listening opportunities where downloading another app isn't really an option. Cumulus could buy one of the lower-tier streaming services, but the problem with that is that CMLS 1) has no money and 2) most of the ones they could have afforded have gone under (looking at you, Rdio), but Napster is still available. CMLS is not going to buy Pandora or Spotify. They could buy last.fm off of CBS. Alternatively, they could strike up a joint venture with a whale like Apple or Amazon.

Sales weasels just have to do what they do today, while emphasizing streaming. Of course, the big difference is that streaming has a worldwide audience, and no local advertiser (say, an ambulance chaser) is going to pay for online impressions that may be from across the country--but a different advertiser might.

Cox's single-station-app approach puzzles me. I don't want to have a dedicated app for each one of their stations (I currently have none of them), and how am I to know what other stations Cox has around the US that might have a format I particularly like?

wavo said:

Lew made the WRONG digital effort(s) which contributed to his removal.

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After he left, he had an epiphany...radio is mobile:

http://observer.com/2016/10/lew-dic...ed-media-analyst-reckons-with-mobile-culture/

The problem with all this is radio WAS mobile for many years. The portable radio was the killer app. The FM Walkman. The Boom Box. Then the cell phone came along. Had radio been part of the cell phone, everything would have been fine. But it wasn't. Why?

Rumor is that ATSC 3.0 (the next phase of free broadcast TV with 4K technology) will have TV broadcasted from cell towers instead of just one transmitter in town. Current DTV has no mobile capability because of the lack of error correction it provides. ATSC-Mobile is a mobile stream but dyle owns it and you have to pay for it. Plus it only puts out a low quality SDTV signal and doesn't stretch very far out of town and very few devices have it. It is a mystery as to why I can do everything with my smartphone except receive free broadcast radio and TV signals from it. Sure I can utilize TuneIn or IHeart to listen to the radio but it uses my data. Local TV broadcasts are restricted on my XFINITY app away from home. I instead have to have my separate RCA portable TV and my Insignia portable HD radio. There are a few Android devices that utilize the FM chip through NexRadio but there are very few of these. My ZTE tablet has an FM tuner and has perhaps the best tuner of any radio I have ever heard. Equivalent to a car radio. Pulls in FM stations far away. Even better than the Insignia portable.

TheBigA said:

After he left, he had an epiphany...radio is mobile:

http://observer.com/2016/10/lew-dic...ed-media-analyst-reckons-with-mobile-culture/

The problem with all this is radio WAS mobile for many years. The portable radio was the killer app. The FM Walkman. The Boom Box. Then the cell phone came along. Had radio been part of the cell phone, everything would have been fine. But it wasn't. Why?

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Because OTA radio doesn't use any kind of a telco service that a telco can charge for.

jabba17 said:

Because OTA radio doesn't use any kind of a telco service that a telco can charge for.

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The camera in my phone doesn't use any Telco service either.

Let's say you're Lew "Big A" Dickey. It's 2010. What would you have done differently besides NOT create $2B in unsustainable debt? What would your digital strategy be? Would you have done Sweetjack, NASH, WW One, the Citadel deal, etc.?

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What a marvelous question!!!

Here's what I would've done differently:
-If I could've bought the Citadel stations for a lower price, I still would've moved forward the deal. Dickey (what a fitting name) overpaid. Big time.
-I would've fired Jan Jeffries.
-I would've hired Dan Mason to be my EVP of programming & content
-I would make sure my local market GM's, OM's and PD's have a lot more autonomy with regard to programming decisions
-I would've never implemented the horrendous CRM software that made my sales professionals proverbially jump from windows to escape the horror
-I would've flipped Rock 100.5 in Atlanta to active rock (with some alternative product mixed in) the instant Project 9-6-1 went away
-I wouldn't have ditched successful Country brands & personalities all over the country simply to have a place to plop "Nash" content
-I wouldn't have bad mouthed Rush Limbaugh and I would've worked hard to keep Rush and Sean on WABC in New York
-I would've hired a competent web page design firm and never would've invested in that two-bit iHeartRadio knock-off whose technology was nothing short of pitiful. I would've entered into a streaming partnership with TuneIn.
-I would've worked to obtain better audience research for my OM's and PD's across the country

MarkW said:

Here's what I would've done differently:

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Interesting list. Other than your first point (too late for that) they've done just about everything else on your list except flip 100.5 to active rock. They even made up with Rush. Mason isn't available. They've returned a lot of the successful station brands, they've made local managers autonomous, they got rid of the sales software, and got better research. Ratings are up, but they haven't turned those ratings into dollars yet.

TheBigA said:

The camera in my phone doesn't use any Telco service either.

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It does when you upload the pics somewhere.

jabba17 said:

It does when you upload the pics somewhere.

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The phone manufacturers are not in the Telco business. They are electronics manufacturers. Not unlike the companies that make traditional radios. Some may have distribution relationships, but those are external to the actual manufacturing of the phone itself.

TheBigA said:

The phone manufacturers are not in the Telco business. They are electronics manufacturers. Not unlike the companies that make traditional radios. Some may have distribution relationships, but those are external to the actual manufacturing of the phone itself.

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With the exception of Apple, the telcos do pick and choose not only which phones they carry, but what features they have. If, say, Verizon wants or doesn't want a feature, it goes or doesn't go in the phone. The telcos love features that use data, versus data-free alternatives. The only other exceptions are third-party phones like the Google Nexus phones, which you typically don't get a juicy subsidy or other deal for and have to pay full price for, or the Huawei phones you can buy online but not at a cellphone store or website. My Verizon Droid Turbo 2 cost me a net $100 after all the rebates were factored in, while a similar Nexus would have cost me about $600. The Droid Turbo 2 comes with a bunch of data-hungry Verizon crapware that I had to disable. The Nexus does not. Heck, I didn't even see the Nexus on display at the Verizon store or on their website; I think you have to order it directly from Google, which is not how non-geeks buy cellphones. My old Sprint HTC Evo had a radio chip that worked great. Sprint also has unlimited data, so any time I was listening to the radio on that phone I was not costing Sprint any more money while they were still getting their maximum amount of money out of me. In other words, Sprint didn't want me to use their data any more than I had to, while Verizon does.

The cell phone market is changing to a system where people pay full price for all phones themselves (or BYOD) instead of having them subsidized and paid for over time under a contract, but that is a recent development. It would be easier for a phone manufacturer to get consumer-oriented (vs. telco-oriented) features (like a radio receiver) added to a phone these days, but again that is due to a recent change with how cell phones are sold to consumers.

If Walmart had a service you could pay for that worked with traditional radios, you can bet that Walmart would push radios that used that service. Just like Circuit City pushed DIVX.

jabba17 said:

If Walmart had a service you could pay for that worked with traditional radios, you can bet that Walmart would push radios that used that service. Just like Circuit City pushed DIVX.

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So you believe company sanctioned kickbacks like the ones Sirius made with car companies are great? The NAB has a kickback with some telcos to enable the FM chip (that is available in every other country except the US). But even then, companies like Apple refuse to participate. Can you imagine that happening with the Walkman in the 80s?

My point is that we can talk here all day about radio companies and what they used to be, but the fact is that Telco companies have killed the portable radio business. When was the last time an electronics company came out with a cool new portable AM-FM radio? Imagine if the Amazon Alexa or Google Home could receive FM signals. It doesn't unless that station is on TuneIn. None of this has anything to do with programming on FM or the way radio companies are run. The system is rigged against radio. Its amazing that anyone listens at all.

TheBigA said:

So you believe company sanctioned kickbacks like the ones Sirius made with car companies are great? The NAB has a kickback with some telcos to enable the FM chip (that is available in every other country except the US). But even then, companies like Apple refuse to participate. Can you imagine that happening with the Walkman in the 80s?

My point is that we can talk here all day about radio companies and what they used to be, but the fact is that Telco companies have killed the portable radio business. When was the last time an electronics company came out with a cool new portable AM-FM radio? Imagine if the Amazon Alexa or Google Home could receive FM signals. It doesn't unless that station is on TuneIn. None of this has anything to do with programming on FM or the way radio companies are run. The system is rigged against radio. Its amazing that anyone listens at all.

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Big A, your original question was:
"Had radio been part of the cell phone, everything would have been fine. But it wasn't. Why?"

And I answered that question; the telcos don't make money off of broadcast radio and it's not in their interest to encourage its use. In the case of Apple, they have their own (paid) radio replacement, so no incentive there, either.

Not sure what your last point was regarding your original question, unless you really just want to have the last word or somehow stir the pot.

jabba17 said:

Not sure what your last point was regarding your original question, unless you really just want to have the last word or somehow stir the pot.

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It was a rhetorical question. I know the deal. The system is rigged. Only in this country. In other countries, radio is included, and they don't have to pay.

Yes, I want to stir the pot. That's why they call it Radio Discussions.

Besides, they will fall down from 2nd place, to 3rd largest radio owner soon. Why? Entercom will surpass them after the merger!