Radio Giant Cumulus Media Files for Chapter 11 Bankruptcy
The first shoe has fallen in what promises to be a prolonged period of massive reorganization and debt restructuring in America’s radio landscape, as one of the largest radio station owners has filed for Chapter 11 bankruptcy. Announced on Wednesday (11-29), Cumulus Media has filed voluntary petitions to reorganize under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court for the Southern District of New York.
Cumulus Media owns roughly 70 country music radio stations, along with 446 total stations in 90 media markets. The company is also partnered with Big Machine Records via the NASH Icon record label with artists Reba McEntire, Martina McBride, Hank Williams Jr., and Ronnie Dunn. Cumulus also owns NASH Country Daily, which used to be the well-circulated country music periodical Country Weekly before Cumulus purchased the magazine in 2014, retooled it to their country-centric “NASH” brand, and eventually shut down print operations in April of 2016 due to dwindling revenues.
What effect the Cumulus bankruptcy will have on the country industry remains to be seen, but it may not be as bad as it sounds. Since Cumulus still has plenty of cash reserves, it plans to continue operations mostly as normal through the Chapter 11 restructuring. It’s a different story for rival iHeartMedia who is the #1 radio station owner in America ahead of Cumulus, and is facing its own financial woes. The hope is the filing will reduce Cumulus Media’s debt load by roughly $1 billion—or 69% of the company’s responsibilities—giving it the flexibility to deal with rigors of the changing media marketplace moving forward.
“Over the last two years, we have focused on implementing a business turnaround to reverse the Company’s multi-year ratings, revenue and EBITDA declines, create a culture that fosters motivated and engaged employees, and build an operational foundation to support the kind of performance we believe Cumulus is capable of delivering,” says Mary Berner, President and CEO of Cumulus Media. “As we have demonstrated in many measurable ways – including increased ratings, revenue market share gains, improved employee satisfaction, reduced employee turnover and, over the last several quarters, our return to year-over-year EBITDA and revenue growth – that turnaround has not only been successful but is continuing. However, as we have noted consistently, the debt overhang left by previous years of underperformance remains a significant financial challenge that we must overcome for our operational turnaround to proceed.”
The previous years of underperformance are mostly due to the previous CEO of Cumulus Media, Lew Dickey. Lew was fired in September of 2015 after taking Cumulus down a path that relied greatly on using country music to revitalize the company. Along with Lew Dickey’s brother, Cumulus Vice President John Dickey, the company planned and entire suite of “NASH” media and consumer products, not limited to tiers of radio stations to appeal to different country music listeners, consumer goods such as clothing, furniture, food, and even paint and restaurants, along with their label partnership with Big Machine Records that hoped to revitalize the careers of iconic country artists left in the lurch by modern country radio’s focus on youth, and tight Top 40 playlists. Ultimately the plan turned out to be more sizzle than serious strategy.
“The actions we are taking today to address our balance sheet are a critical step forward for Cumulus,” continued Cumulus CEO Mary Berner. “We will use this restructuring process to relieve the financial constraints on our continued progress, allowing us to focus our resources on investing in our business and people to strengthen our competitiveness and ultimately drive growth.”
But just like with the exit of the Dickey Brothers, this Chapter 11 filing will certainly have reverberations in country music, which unlike other genres and music industries, still relies very much on radio to connect with consumers, and promote artists.
All this news comes as iHeartMedia has made it known they do not expect to be “a going concern” in 12 months or less, leaving even more uncertainty for the country music industry.
November 29, 2017 @ 8:40 pm
I’m really afraid we are never going to get that NASH paint we’ve been not so patiently waiting for.
November 29, 2017 @ 9:05 pm
It used to be so simple, and successful: Local stations, with local on air talent, answering local phone lines that were ringing with local listeners calling in to make requests. Advertising for local businesses and news that covered local events.
And then came the Empire…”we can do it better.”
No, no you can’t.
November 29, 2017 @ 10:06 pm
95.9 The Ranch. FWD, TX. They Livestream on their website.
November 30, 2017 @ 8:54 am
Yep, best country station there is. I used to live in Fort Worth and would listen frequently. Now if i’m in need of new music i’ll stream the ranch for about an hour and guaranteed I have a few new songs I like.
November 30, 2017 @ 5:46 am
There are still stations like that.
http://www.froggy959.net
November 30, 2017 @ 7:24 am
kwkz.com – traditional country music
November 30, 2017 @ 8:30 am
Plenty of stations still around like that. Like this one where I live in Nebraska: http://player.listenlive.co/53171
November 30, 2017 @ 12:39 pm
Also KOKE FM here in Austin on 98.5/99.3
November 29, 2017 @ 10:03 pm
Good…I hope iHeart is not far behind.
November 29, 2017 @ 11:09 pm
Let it all come tumbling down.
November 29, 2017 @ 11:12 pm
Considering what corporate radio has done to country music, I say GOOD and FUCK THEM.
Next up, Bobby Bones, hopefully.
November 30, 2017 @ 12:12 am
Good, hopefully Iheartradio is next. Then fm radio can return to its former locally owned glory.
November 30, 2017 @ 5:47 am
Nothing is gonna happen. The banks will agree to take it up the ass and refinance the debt. Cumulus will keep clicking along. When they start putting assets up for sale, then I’ll believe it.
November 30, 2017 @ 6:54 am
MARY BERNER
President and Chief Executive Officer
MPA – The Association of Magazine Media
@mpamagmedia
Mary Berner was named President and CEO of MPA in September 2012. She has led, built and transformed some of the most storied media brands in the world including Glamour, TV Guide, W, Women’s Wear Daily, Details, Brides, Allrecipes.com, The Family Handyman, and Every Day with Rachael Ray.
Most recently, she was President and CEO of the Reader’s Digest Association, where she led the successful restructuring of the company’s acquisition-related debt,
after which she and her team presided over the doubling of the stock price. As Publisher and Senior Vice President of Condé Nast’s Glamour Magazine, which she joined in 1995, she delivered double-digit advertising revenue increases each year including the biggest year-over-year gain in 20 years. During her tenure as CEO of Fairchild Publications, she was named Advertising Age’s “Publishing Executive of the Year” and inducted into the MIN Sales Executive Hall of Fame.
http://www.magazine.org/mary-berner
Nary a thing about music or radio knowledge, but, an expert in debt restructuring. Imagine that.
November 30, 2017 @ 7:11 am
Yep. CEO’s are generally either builders or fixers. Looks like she’s the later.
November 30, 2017 @ 8:10 am
Good point. She’s “fixing” the debt, not the music, or ‘other’ formats they present, which is THE why the debt has to be fixed.
Stupid fucks. I’d be interested in finding out what lines of bullshit was used to accumulate so much debt. I have some ocean front property in Az.they might be interested in. They can even write it off on their taxes.
She seems to be good at restructuring ad prices too, which means advertisers will pay the price, and ultimately listeners, because there will undoubtedly be more commercials and less content. Typical “expert” know nothing about product represented, but good at bullshitting other know nothings who believe their own bullshit about their expertise because they ‘paid’ somebody to tell them they are “experts” and got a sheepskin on the wall to prove it.
November 30, 2017 @ 3:30 pm
Just like Strauss Zelnick from Take Two Interactive.
November 30, 2017 @ 6:59 am
A leader in the radio broadcasting industry, Cumulus Media (NASDAQ:CMLS) combines high-quality local programming with iconic, nationally syndicated media, sports and entertainment brands to deliver premium content choices to the 245 million people reached each week through its 446 owned-and-operated stations broadcasting in 90 US media markets (including eight of the top 10), approximately 8,000 broadcast radio stations affiliated with its Westwood One network and numerous digital channels. Together, the Cumulus/Westwood One platforms make Cumulus Media one of the few media companies that can provide advertisers with national reach and local impact. Cumulus/Westwood One is the exclusive radio broadcast partner to some of the largest brands in sports, entertainment, news, and talk, including the NFL, the NCAA, the Masters, the Olympics, the GRAMMYs, the Academy of Country Music Awards, the American Music Awards, the Billboard Music Awards, Westwood One News, and more. Additionally, it is the nation’s leading provider of country music and lifestyle content through its NASH brand, which serves country fans nationwide through radio programming, exclusive digital content, and live events. For more information, visit http://www.cumulus.com.
https://www.cumulus.com/investors/
…………
I’m gonna call bullshit on their bullshit. They reach 245million people? LOL.
November 30, 2017 @ 9:33 am
I don’t care for much globalization period.
I shop locally, go to small and medium venue shows (where the artists play their hearts out) and avoid chain restaurants.
November 30, 2017 @ 4:01 pm
Globalization is a fact of life we have to deal with. In fact nearly our entire tertiary economy is global effort, which has raised the standard of living for nearly the whole world. Most of our clothes are made elsewhere too.
The problem lies in central planning, which is what our gov’t (and other gov’t’s) subscribe to. The central planners (gov’t or business) believe themselves the arbiters of what can be consumed often making regulations, bought and paid for through campaign donations, that restrict, impede and impair competition.
The corporate world (this situation is a perfect example) exemplifies how it’s doomed to fail. The investors are the ones who will suffer, the banks won’t.
The consumers will pay the price ultimately.
November 30, 2017 @ 9:40 am
The reason why country music has changed so much over recent years is due to corporate buying out independent country stations. Forever Media swooped in and purchased an independent small business country station in my area about 2 years ago and turned it into complete shit, all top 40 now. There is only one independent country station left in my area that plays old country with some new stuff mixed in once in awhile, they were corporate owned at one time but was sold to a guy in the area and he has operated it as a small business since then. I hope all the corporate owned country stations go under, maybe we can get the music back to sounding like actual country again.
November 30, 2017 @ 4:57 pm
My God, the loss to good music will be simply incalculable.
December 1, 2017 @ 6:43 am
I think what you may be missing is that Cumulus (and iHeart’s) problems aren’t revenues and earnings it is their high debt burden. They make money – and in Cumulus’ case earnings are rising – they just don’t service the high level of debt. Cumulus will be getting rid of about $1 to $1.5bn of its $2.5bn in debt, the banks have agreed so they will come out of chapter 11 as the same company, just with a lot less debt, paying a lot less interest, and they will have more cash to invest in the business. Now that doesn’t mean they will invest backing say Jason Isbell. In short I don’t think the bankruptcy in and of itself is going to change a lot at cumulus. Whether they can sustain their recent earnings growth (and remember growing earnings in an odd year is quite good, considering the high level of election spending in 2016) I don’t know, but they will have more ability to invest. Will they start say a NASH Americana? Who knows but they now have a bit more money to that.