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Connoisseur Media CEO Involved in Bid For Cumulus

B

Barry

Reports state that Jeff Warshaw CEO of Connoisseur, is leading a consortium that has made an offer offer to purchase Cumulus Media.
As Connoisseur has several stations on LI and CT, I wonder whether this effort to purchase the nation's third largest radio broadcaster, if successful, could have a significant effect on the local radio scene.

One of Several Articles: Report: Jeff Warshaw Leads Effort To Acquire Cumulus Media.
 
Several threads on this subject should be grouped under National Radio.

This looks like a low ball offer hoping to get a bite from some anxious equity owners.

The price includes about $600 million of debt, which the equity owners would love to get ride of.

It's also a case of David & Golliath. Connoisseur is way out of its league here. But who knows? It might work.

 
Low ball offer?

I thought the complete opposite. I think the offer is excessively generous, and I question the Warshaw consortium's ability to fund the deal should the offer be accepted.
 
MarkW said:
I think the offer is excessively generous, and I question the Warshaw consortium's ability to fund the deal should the offer be accepted.
Click to expand...

Depends what your basis is. If it's based on revenue, you're right. Cumulus made under $200 million last year.

If it's based on asset liquidation value, it's low ball. Anyone who's willing to sell off the major markets will likely get back a chunk of the money back.

Theater of My Mind said:
I'd love to see this happen. It would probably be a culture shift at Cumulus for the better. Much better.
Click to expand...

Connoisseur is a very lean company, not much investment in digital, very similar to Saga. I would expect to see lots of stations sold off.
 
Connoisseur owns 13 stations I believe. And they are trying to buy over 400? Someone, somewhere must have some very deep pockets, or maybe the plan is to "flip" some stations as soon as they acquire.
 
Unless Connoisseur has buyers lined up for immediate asset flips, this sounds like a recipe for self destruction. Perhaps Warshaw doesn't care if he is using other people's money.
 
RadioGuy1864 said:
Connoisseur owns 13 stations I believe. And they are trying to buy over 400? Someone, somewhere must have some very deep pockets, or maybe the plan is to "flip" some stations as soon as they acquire.
Click to expand...
Connoisseur is not making the offer. A private equity group headed by the CEO of Connoisseur is making the offer, and so far it seems independent of the existing group he runs.
 
TheBigA said:
Connoisseur is a very lean company, not much investment in digital, very similar to Saga.
Click to expand...

REUTERS: Beyond its radio stations, Cumulus has a digital platform that ranks among the top five podcast networks in the United States.

RadioGuy1864 said:
Someone, somewhere must have some very deep pockets
Click to expand...

REUTERS: Warshaw's blank-check acquisition firm Virtuoso Acquisition Corp merged with automotive data analytics firm Wejo last year in a $1.1 billion deal.

www.reuters.com

EXCLUSIVE Warshaw-led consortium in $1.2 bln bid for Cumulus Media -sources

A consortium led by U.S. radio station industry veteran Jeff Warshaw has offered to acquire Cumulus Media Inc for close to $1.2 billion, including debt, people familiar with the matter said on Thursday.
www.reuters.com www.reuters.com
 
DavidEduardo said:
Connoisseur is not making the offer. A private equity group headed by the CEO of Connoisseur is making the offer, and so far it seems independent of the existing group he runs.
Click to expand...

What do you mean by "independent"? Warshaw is interested in radio and that's what the group is pursuing. It's not like they're off on their own, independently choosing to buy something else.
 
Theater of My Mind said:
REUTERS: Beyond its radio stations, Cumulus has a digital platform that ranks among the top five podcast networks in the United States.
Click to expand...

My comment was about Connoisseur, not Cumulus. Connoisseur is very lean, and they seem to be stuck in the 90s.

I don't know what woke this guy up recently. He's been around for 30 years and has never done anything like this.
 
Theater of My Mind said:
What do you mean by "independent"? Warshaw is interested in radio and that's what the group is pursuing. It's not like they're off on their own, independently choosing to buy something else.
Click to expand...
By "independent" I mean a separate entity with separate financing from a private equity group.
 
If the offer is real and funding contingencies can be cleared, the Cumulus board and shareholders would be nuts to reject the offer, IMO.
 
MarkW said:
If the offer is real and funding contingencies can be cleared, the Cumulus board and shareholders would be nuts to reject the offer, IMO.
Click to expand...
Maybe not. At least one investment analyst had previously predicted Cumulus shares to be in the high 20's in the near future and had issued a "buy" recommendation.
 
Many of those analyst reports are not worth the paper they are printed on, especially if we're talking small cap companies.
 
DavidEduardo said:
By "independent" I mean a separate entity with separate financing from a private equity group.
Click to expand...

It reminds me of the side company Lew Dickey set up when he bought Susquehanna, called Cumulus Media Partners.

I've been asking around, and no one I've talked to knows who this guy is. He seems to have been under the radar for a while.
 
RadioGuy1864 said:
Connoisseur owns 13 stations I believe. And they are trying to buy over 400? Someone, somewhere must have some very deep pockets, or maybe the plan is to "flip" some stations as soon as they acquire.
Click to expand...

I’d always heard Warshaw saw himself as a much larger operator and running a large company.

I had a PD who worked for the first iteration of Connoisseur in the 90’s. He said Warshaw took care of you if you took care of him, but you won’t get much longer of a leash than you had at Cumulus under the Dickeys.
 
The article in InsideRadio concerning this offer states, "If a deal were to be struck, some assets might need to be spun-off in the New York area to secure approval from the Federal Communications Commission."
Is that due to the fact that Cumulus still owns WFAS AM & FM? As these two stations have a tiny audience, my guess is that the priority would be to sell them, rather than the ones already belonging to Conoisseur.
 
Barry said:
The article in InsideRadio concerning this offer states, "If a deal were to be struck, some assets might need to be spun-off in the New York area to secure approval from the Federal Communications Commission."
Is that due to the fact that Cumulus still owns WFAS AM & FM? As these two stations have a tiny audience, my guess is that the priority would be to sell them, rather than the ones already belonging to Conoisseur.
Click to expand...

The reason is because Connoisseur owns stations on Long Island, which count as New York stations. Unless he has a simulcast or the Fairfield County stations are an issue, he should be good.
 
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