In case any of you aren't paying attention to detail the Cumulus bankruptcy has been approved by a Texas bankruptcy court. Today or yesterday. Mary Berner wins again.
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- Thread starter K108 Sacramento
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I am terribly sorry, I thought I was still on the thread about KM's new Oldies station. I must've just left it!
Not that I could tell. I did check adjacent channels from Pt. Reyes SDR last night.
570 was running Dodgers baseball, so presumably KLAC/Los Angeles.
And 550 was KUZZ/Bakersfield, confirmed with an identifying liner.
I'm not surprised, given that KLZ is a heritage regional signal, much like the old KSFO was.
Between KSFO (as it then was) and KMJ, 570 was an impossibility for me in Oakland. KUZZ is what I would have expected at 550. In Oakland, it sometimes came in strong enough to break through the sideband noise from KSFO.
Good to hear that the SDR is back up.
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This is not a “win” for Berger. She specializes in troubled businesses and was brought in to Cumulus to try to find a process that would allow the company to survive. In such a case, the beneficiaries are the remaining employees and the debtors.
But not anyone who owns stock in Cumulus. That's now worthless when they take the company private.
...which is why stockholders demand the most rewards. They take the biggest risk because under U.S. law, all creditors are paid before they ever see any money from a bankruptcy.
It was, if I recall correctly, stock that was on the pink sheets. In other words, a highly speculative investment. Anyone buying the stock should have been doing so with full awareness of probable losses. Personally, I would have had more confidence in sports betting. And I don't gamble.
The one exception I would have to those statements is if Cumulus had an employee stock-ownership plan (ESPP). Employee participants in such plans often don't fully understand what they're getting into, and instead tend to focus on the discount offered (up to 15%) on the stock price. In a growth industry, ESPPs can still be a good benefit. That's probably not the case for broadcasting. I need to make clear that I have no idea whether Cumulus offered an ESPP.
Otherwise, though, I don't understand the animus toward Mary Berner. Would it be preferable for all the Cumulus stations to go dark instead?
The current value of Cumulus stock is down to 4/10 of a cent. Soon to be zero. It's just over the counter penny stock. Those stockholders have already been through the big loss for awhile. I remember reading posts here in the past from those who currently, or have invested in Cumulus at one time.. I would love to hear from those members now...
I wonder about the employees, and any ESPP that was invested in. If they had one, couldn't those employees than become equity holders as well?
Very few employee plans such as 401-k options recommend or even permit buying shares in the company the employee works for. This is a classic "putting your eggs in one basket".
Of course, employees may have bonus or incentives that are rewarded by the ability... not requirement... to buy company shares at establishments prices. But one has no equity until those shares are purchased.
I wonder how many broadcasters with such bonus plans in the last 25 years ever made anything from those programs. Most were the result of the increase in publicly traded broadcast companies following deregulation and were used to help retain and recruit management.
The idea was to keep good staff on board since leaving would cancel those future options.
The only one I know of that produced broad positive results was Hispanic Broadcasting. The shares were "above water" for nearly everyone when HBC was sold to Perenchio and we all were "liquidated". About 20 or so of us got 7-figure payouts.
I would say they were good plans up until the crash of 2008. I got out of ours just before that. Whew!
Down here in SoCal with a good radio and a careful nulling out of 570 KLAC you easily hear KVI !
Until its demise we could usually hear 560 down here in SoCal but not nearly as strong of course as it's Bay Area neighbor just up the dial on 610.
I've seen them in quite a few plans, generally in the form of a unitized trust whose shares reflect the underlying company shares plus a little bit of cash for liquidity. One 401(k) plan I had in the late 2010s placed limits on individual holdings of company stock in the retirement account. That plan also paid the match in company shares, though participants could sell them the next day, which I did. The Enron debacle led to more stringent regulations on company stock in retirement plans.
That said, ESPPs aren't regulated under Department of Labor regulations; they're subject to SEC registration and regulation. They're available only at publicly traded companies. Privately-held companies may have other things such as phantom stock, but those are usually reserved for key employees. There are also profit-sharing plans which pay out a cash grant, either pre-tax into a retirement account, or as a straight cash bonus, based upon annual targets. There are many variations possible.
The preceding paragraph doesn't necessarily indicate that Cumulus had an ESPP before its most recent bankruptcy, but it would indicate that the reorganized, privately-held company won't have one henceforth.
A very broad description of ESPPs: Legal Guidelines for Employee Stock Purchase Plans
In other words, stock options. There's also restricted stock units and performance stock units that reflect shares to be granted based on a vesting schedule and, for performance stock units, meeting corporate targets.
It was interesting watching David Field accept his options and almost immediately sell them. He was a smart man.