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Thread: Cumulus station trade round up April 2019

  1. #11
    I think KLOS went for a combination of stick value and billing. I don't think they were cash flowing $4 to $5 million, as that would be a margin of 45% to 50% on billings.
    Wow - billing was weaker than I even thought! Those are putrid figures in a market as large and as wealthy as southern California given the longevity of the KLOS brand.

    Evidently, the bar is high from a cash flow multiple standpoint for Cumulus to be a wiling seller.

    They have said publicly that they're very happy with the Chicago, Detroit, and Houston clusters.
    Talk - especially of the "public" variety - is cheap. In Detroit, WJR's ratings are on a general decline (billing remains healthy but has no upside), WDRQ is a total dumpster fire, and WDVD is just a so-so revenue performer relative to ratings. I have little doubt KRBE in Houston remains a strong performer.

    Chicago - like Detroit - is another market where Cumulus stations command only a small percentage of total radio ad dollars. However, recent changes in the market would suggest to me there is room to grow 94.7 WLS-FM's billing. I'm not sure about Q101 - they are probably stuck in neutral. Cumulus has put a lot of effort into retooling 890 WLS in recent years (they are now on the second or third such retooling), so evidently they think there is still an opportunity to resuscitate that station and improve its performance. I'm deeply skeptical. Once an AM station's audience flees, it is very difficult to get those listeners back, regardless of how many programming changes are made.

  2. #12
    Quote Originally Posted by MarkW View Post
    I'm deeply skeptical. Once an AM station's audience flees, it is very difficult to get those listeners back, regardless of how many programming changes are made.
    If what you say is true, then there will be no demand for those signals. At least not at the price required to make a deal. One thing to know about Chicago and Detroit: Given the number of national advertisers in those two markets, Cumulus would continue to have offices in those cities even if they didn't own stations there. Owning those stations at least covers the basic expense of those sales offices. Same with NY and LA. So their needs in those markets are different from locally based owners.

  3. #13
    There's always the possibility that they donate the signals to some non-profit. The company could use a write off at this point. Might actually be better than getting cash for them.

  4. #14
    Quote Originally Posted by AMRocks View Post
    There's always the possibility that they donate the signals to some non-profit. The company could use a write off at this point. Might actually be better than getting cash for them.
    Nice idea but the expense of running them is more than most non-profits can handle. iHeart tried that a few years ago, and it didn't work out.

  5. #15
    David - you have always been pretty willing to share your take/guess on sales and profit of stations over the years. (BigA, too?) What would you think about WPLJ and KLOS? BigA, how does/can Cumulus recover the billion plus needed in revenue to cover this debt? Virtually impossible/improbable at this point?

  6. #16
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    Quote Originally Posted by Tibbs4 View Post
    David - you have always been pretty willing to share your take/guess on sales and profit of stations over the years. (BigA, too?) What would you think about WPLJ and KLOS? BigA, how does/can Cumulus recover the billion plus needed in revenue to cover this debt? Virtually impossible/improbable at this point?
    KLOS increased billing last year, while the LA market decreased. This was in part due to the loss of The Sound. I am making a very weak guess based on no evidence that they cash flowed around $4 to $5 million last year, up from perhaps $3 to $4 million the prior several years. Sales were in the $13 to $14 million zone.

    WPLJ was off so much in revenue in 2018 (less than half the level of 5 years previous) that they likely were very marginal in profit... maybe $2 to $2.5 million on under $10 million in revenue.

    The two sales they made reduce debt by about $100 million if used for that... about 10% of debt. By focusing on markets where they can improve performance, this was likely the best step. Remember, the former creditors own the group, so they are acting in their own best interest to pay off the remaining debt.
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  7. #17
    Quote Originally Posted by DavidEduardo View Post


    KLOS increased billing last year, while the LA market decreased. This was in part due to the loss of The Sound. I am making a very weak guess based on no evidence that they cash flowed around $4 to $5 million last year, up from perhaps $3 to $4 million the prior several years. Sales were in the $13 to $14 million zone.

    WPLJ was off so much in revenue in 2018 (less than half the level of 5 years previous) that they likely were very marginal in profit... maybe $2 to $2.5 million on under $10 million in revenue.

    The two sales they made reduce debt by about $100 million if used for that... about 10% of debt. By focusing on markets where they can improve performance, this was likely the best step. Remember, the former creditors own the group, so they are acting in their own best interest to pay off the remaining debt.


    Very good info. I think you are accurate on all of this. (Faithfully Signed, your other favorite [email protected]$$) - been a long evening. Nite, sir!

  8. #18
    Given the number of national advertisers in those two markets, Cumulus would continue to have offices in those cities even if they didn't own stations there. Owning those stations at least covers the basic expense of those sales offices. Same with NY and LA. So their needs in those markets are different from locally based owners.
    I am not sure I follow your logic here, BigA.

    There is plenty of available office space in Metro Detroit, mostly in the suburbs. Operating costs for, say, a 3,000 sf suite to serve as a national sales office are not terribly expensive. The advertising sold by such office's account execs should justify the expense. If national ad sales generated from the Detroit office are insufficient to generate an acceptable contribution to the bottom line, then the office has no reason to exist.

    The perceived need to have national account execs on the ground in Detroit should not dissuade Cumulus from turning down any offer from a would-be buyer to purchase Cumulus' stations at an attractive multiple to Broadcast Cash Flow. Of course, who the heck knows if any such buyers are actually out there.

  9. #19
    Quote Originally Posted by MarkW View Post

    The perceived need to have national account execs on the ground in Detroit should not dissuade Cumulus from turning down any offer from a would-be buyer to purchase Cumulus' stations at an attractive multiple to Broadcast Cash Flow. Of course, who the heck knows if any such buyers are actually out there.
    That's the point. Everyone knows Cumulus is a seller, but so far there haven't been many buyers. I never said they would turn down great offers from potential buyers. So my point is Cumulus is in no rush to sell, especially in markets where they already have offices. As a result, they don't have to accept ANY fire sale offer. Owning the stations in those markets guarantee the spots will air in the key sales markets of Detroit and Chicago without having to buy clears on competitor stations. They can wait for the best offer to come in.

  10. #20

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    WPLJ and WYAY has been mentioned to get a format flip on May 31st as EMF takes over those stations from Cumulus.

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