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Thread: Why Does Cumulus Prefer Indianapolis Over New York?

  1. #1

    Why Does Cumulus Prefer Indianapolis Over New York?

    As we know, Cumulus traded WNSH 94.7, along with a couple of stations in Massachusetts to Entercom, in exchange for 3 of their stations in Indianapolis. This helps them become the dominant cluster in the Indy market.
    My question is, why would Cumulus greatly diminish their presence in the #1 market, and instead build up their holdings in a much smaller one?

    Cumulus/Indianapolis: http://www.insideradio.com/free/cumu...85e5a6c48.html
    Last edited by Barry; 04-12-2019 at 10:42 AM.

  2. #2

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    I think this has mostly been covered in the WPLJ thread. Cumulus didn't own enough signals in New York to achieve any kind of dominance or parity. On the other hand, they can dominate Indianapolis

  3. #3
    Quote Originally Posted by Barry View Post
    As we know, Cumulus traded WNSH 94.7, along with a couple of stations in Massachusetts to Entercom, in exchange for 3 of their stations in Indianapolis. This helps them become the dominant cluster in the Indy market.
    My question is, why would Cumulus greatly diminish their presence in the #1 market, and instead build up their holdings in a much smaller one?

    Cumulus/Indianapolis: http://www.insideradio.com/free/cumu...85e5a6c48.html
    You should seriously get in contact with somebody from Cumulus and ask them this question, as how should we know and I don't know if any of their staff members are on these boards, or even pay attention to them.

  4. #4
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    Quote Originally Posted by staggmovie View Post
    You should seriously get in contact with somebody from Cumulus and ask them this question, as how should we know and I don't know if any of their staff members are on these boards, or even pay attention to them.
    gr8oldies gave us the correct answer already. Cumulus had one a poor cluster in New York... one that could not achieve critical mass... but by increasing its cluster size in Indianapolis, they are fully competitive with the other major operators there.

    WNSH is at present a more limited signal facility, not fully covering the Nielsen MSA (particularly Long Island). It was not a "prize" NYC facility, and was not part of a major cluster.
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  5. #5
    So, can we conclude it was a mistake for Cumulus to acquire WPLJ, and 94.7? Or did they have no choice, as part of the dealing they did when they were expanding?

  6. #6
    WPLJ was part of ABC Radio, which merged with Citadel. Cumulus bought Citadel. They probably could have divested it, but instead decided to purchase 94.7 from Family Radio to try and improve their NYC cluster and expand their NASH strategy.
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  7. #7
    Quote Originally Posted by Barry View Post
    So, can we conclude it was a mistake for Cumulus to acquire WPLJ, and 94.7? Or did they have no choice, as part of the dealing they did when they were expanding?
    Keep in mind the company's CEO at the time of the acquisition of WPLJ and 94.7 was replaced by the company's board of directors. So the board didn't approve of the direction the company was going in at that time. In the bankruptcy process, there were a few decisions made by that previous CEO that were canceled. But its pretty obvious that the $2 billion acquisition of the previously-bankrupt Citadel (which included the purchase of ABC Radio) created the debt that pushed Cumulus into its own bankruptcy. Most of the stations spun off to EMF, including WPLJ, were previously part of ABC Radio. In addition, there are rumors the company is in talks to sell another former ABC station KLOS in LA. However, none of the sales will make up for the $2 billion the company spent buying those stations.

  8. #8
    Here in Houston we are still keeping a sharp eye on Cumulus stand-alone KRBE. The station is a solid performer with its CHR format, but has no market siblings. Several other groups in town have cap room for another signal, so this could be a possible divestiture. There would be virtually no chance of a format change in those scenarios.

    However if Cumulus was to sell KRBE to EMF, that would be an earthquake far beyond any Californian’s San Andreas nightmare...

  9. #9
    Quote Originally Posted by Mediafrog+ View Post

    However if Cumulus was to sell KRBE to EMF, that would be an earthquake far beyond any Californian’s San Andreas nightmare...
    I wonder if the metric EMF uses would actually undervalue the license, given what you say. They only pay for potential audience, not revenue.

    The other factor is real estate. Where is the KRBE tower, and do they own the land? Same with the studio.

    In NYC, Cumulus kept the studio. So far they haven't sold the WABC tower land.

  10. #10
    Quote Originally Posted by TheBigA View Post
    I wonder if the metric EMF uses would actually undervalue the license, given what you say. They only pay for potential audience, not revenue.

    The other factor is real estate. Where is the KRBE tower, and do they own the land? Same with the studio.

    In NYC, Cumulus kept the studio. So far they haven't sold the WABC tower land.

    It is a very interesting time to see the EMF climb, while Cumulus continues to try to tighten up a sinking ship. I wonder what the total amount of all of these bankrupt companies/corps would add up to in actual dollars lost at this point since the Telecom Act that allowed for the feeding frenzy. How could so many companies miss all of the signs of market changes and still keep pushing these companies off the cliff?

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