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Radio giant Cumulus Media files Chapter 11

firepoint525 said:
Speak for yourself! I would rather retire to the Gulf Coast than EVER darken the door of a radio station ever again!
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Firepoint - This one hits way toooooo close to home (The World's Most Beautiful White Sand Beaches and Pegram, TN). I have tried the radio and the retirement on the beach. Neither worked. LOL. So, maybe I will try again in about a decade or so, Lord willing, on at least one of those options. I feel your pain on never going back into a station, but it's still in your blood a bit. Sometimes, it is better to listen and be able to turn it off from the outside. I have said the same thing about not ever going back in for forty years.... yet, as Donnie Iris says..."Here We Go Again"...
 
https://news.radio-online.com/cgi-bin/rol.exe/headline_id=b15351


Here is an update on Cumulus

U.S. Trustee William Harrington has filed an objection with the U.S. Bankruptcy Court for the Southern District of New York over Cumulus Media's plan to award millions of dollars in bonuses while the company is in Chapter 11 and restructuring. The objection won't impact a previous plan to pay out bonuses that was approved by the court on February 8, to hundreds of employees. Harrington claims Cumulus failed to show that the proposed bonus payments comply with current bankruptcy code.
Harrington says the plans cover 574 fulltime employees and that Cumulus has failed to satisfy their evidentiary burden to demonstrate the Incentive Plans are Incentive Plans. The bankruptcy code's policy is to "preserve the value of the estate for the benefit of its creditors and to prevent the unjust enrichment of the insiders of the estate at the expense of its creditors."
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Yeah yeah. We'll have local DJs around the clock and all will be Utopia, because Mom and Pop will be able to afford a 1960s payroll. We'll even have record turners!


TheBigA said:
I know this will come as a shock to you, but one of the moves the current CEO made was to return stations to local programming. That was one of the first things she did two years ago. It had nothing to do with the situation they're going through now.
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Syndication, voice tracking and other automation aren't going anywhere, however, where there is an opportunity to add local programming that may outperform the automation, it'll at least have a chance where it might've been rejected out of hand previously.
 
umfan said:
Syndication, voice tracking and other automation aren't going anywhere, however, where there is an opportunity to add local programming that may outperform the automation, it'll at least have a chance where it might've been rejected out of hand previously.
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On the other hand, a two year campaign by the Cumulus CEO to return programming decision making to local stations may have improved ratings and revenues, but it wasn't enough to prevent the company from declaring bankruptcy. All one can expect is the company will be stronger once the debt is gone.

Similar story with iHeart: Great ratings and diversified revenue streams can't overcome a $20 billion debt. They could never make enough money, or even sell enough assets to cover that debt.
 
Hmmm....seems to me what this does is prevent a company like Liberty Media to come in with an offer to buy a portion of the debt, as they did with iHeart.
 
https://news.radio-online.com/cgi-bin/rol.exe/headline_id=b15392

Update on Cumulus and Chapter 11 plus radio stations to divest.

The stations that Cumulus wants to divest include Sports WTOD-FM (106.5 The Ticket)/Toledo OH, Country WPCK-FM (Nash FM 104.9)/Green Bay WI, Oldies KJMO-FM (Cool 97.5)/Columbia MO and Country WNUQ-FM (102.1 FM Nash Icon)/Albany GA. All will be placed into the newly-created Mainstay Station Trust headed by San Francisco-based media broker Elliot Evers of MVP Capital.
Cumulus also told the Commission that it had revised two of it local marketing agreements (LMA). The company is now paying $15,000 per month to Merlin Media to continue operating Alternative WKQX-FM/Chicago. It was paying a whopping $600,000 per month. The filing also reveals that it's paying $583,333 per month to operate Sports KESN-FM (ESPN 103.3) Dallas under a lease agreement with Disney/ESPN Radio.
Meanwhile, UCC and Cross Holders have filed objections to the company's Plan of Reorganization under Chapter 11. In a statement, a Cumulus spokesperson said, "Today's objections to our Plan of Reorganization by the UCC and the Cross Holders were anticipated -- they are normal parts of the restructuring process and will not impact our restructuring timeline."
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How can you go from $7.2M a year in payments, to $180,000 a year? That's $19,726 a day in lease payments down to $493. Whoever agreed to those insane monthly payments was perhaps the most inept businessman in American history. Wow! These folks knew what they were doing....and did not care.

And let's see - there are 13 stations in the Nashville market that are included in the bankruptcy plans. How many stations in my market are actually cash flowing? Hmmm. What about Chicago or Dallas? I'll take my odds in 2018 with small business ownership than the dinosaurs filing bankruptcy from pure stupidity. Tell me if I am wrong.
 
Tibbs4 said:
How can you go from $7.2M a year in payments, to $180,000 a year? That's $19,726 a day in lease payments down to $493. Whoever agreed to those insane monthly payments was perhaps the most inept businessman in American history. Wow! These folks knew what they were doing....and did not care.
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What choice do they have? In the case of Merlin, the stations are operating from the Cumulus studios. So it's not like Cumulus is paying Merlin for space, it's the other way around. Secondly, Merlin sold the other Chicago station a couple weeks ago to EMF for $20 million, which is quite a bit less than half of what they paid. So that's not a good situation either. So SOME cash is better than NO cash, which might be what they'd get in a bankruptcy situation. Because Cumulus originally wanted to void their agreement completely. This is an improvement.
 
How much you want a bet that, as part of the deal to decrease payments, the current owner can sell the station out from under Cumulus? I mean, dropping from $600k per month to $15k per month? That's insane. Merlin will sell.
 
AMRocks said:
How much you want a bet that, as part of the deal to decrease payments, the current owner can sell the station out from under Cumulus? I mean, dropping from $600k per month to $15k per month? That's insane. Merlin will sell.
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Sure, that's how Merlin sold WLUP to EMF. No problem. He got $20 million for a station he paid over $50 million.

So the question is HOW do you want to lose money?

The likely reason he hasn't sold the other station is because the offers have been even lower.
 
https://news.radio-online.com/cgi-bin/rol.exe/headline_id=b15425

Update on Cumulus.

Cumulus Media has announced that the U.S. Bankruptcy Court for the Southern District of New York has confirmed the company's Plan of Reorganization. The company expects to emerge from Chapter 11 before the end of the quarter, after the conditions to the Plan are satisfied. Following the completion of the restructuring process, Cumulus' debt will have been reduced by more than $1 billion, and the company will have greater financial flexibility with which to support what it calls an "ongoing business transformation."
Cumulus Media President/CEO Mary Berner said, "The Court's approval of our Plan allows us to complete the balance sheet restructuring that is critical to the success of our turnaround strategy. With a firmer financial foundation in place, we look forward to continuing to implement the business initiatives that have already taken this Company so far."
Berner continued, "The financial and operational progress we have already experienced are a testament to the tenacity and commitment of the entire Cumulus team. We also greatly appreciate the ongoing support of our advertisers, vendors and affiliates as we continue to provide high-quality programming to our millions of listeners across the country."
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https://news.radio-online.com/cgi-bin/rol.exe/headline_id=b15428

Update on Cumulus

According to a recently filed bankruptcy court document, Cumulus Media has agreed to pay Entercom $11.6 million to satisfy monetary obligations Westwood One accumulated before Cumulus filed for Chapter 11 bankruptcy protection in November. Over 30 contracts are listed in the filing, including Westwood One News, Satellite Services, Chicago Bears Football and "The Carson Daily Show." The Stipulation and Order was presented in a hearing in U.S. Bankruptcy Court Friday morning.

Earlier this year, both Cumulus and Entercom agreed to reconcile the disputed amounts and continue to negotiate on what, if anything, is owed in performance-based payments under the Master Agreement between Westwood One and Entercom. These PF payments are not included on the document filed on Friday as the two companies have agreed to "work in good faith" to resolve the matter.
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