Cume-Less gets Fox and 94

[Kent]

It did happen. For sure. Done deal.

I'm not a monkey's uncle...yet! It's not a done deal until the DOJ signs off!

 

[kentuckymedia]

Do you not see it odd that Cumulus gave up a small market to enter a LARGE MARKET while CC gave up a LARGE MARKET to gain a small market?

Something smells fishy and I dont think this is all said and done yet. Cumulus can hold onto these stations only for a short time.

The biggest tale in all of this is that they had to divest the stations by year end, it was required. So I think this was a "last minute" deal just to say they did it. The stations will be for sale again within the year!!!

 

[meandu]

Reading these posts it appears there is still some confusion. Cumulus Broadcasting (publicly held and own the Green Bay stations) and Cumulus Media PARTNERS (private corporate partnership with Bain Capital) are two seperate companies. The DOJ ruling refers only to Cumulus Media Partners (Bain).

 

[kentuckymedia]

Are you ready to be confused?

In the attachments, there is a small line (single sentence) that is the tell tale.

CUMULUS MEDIA PARTNERS (owned by THL/Bain) currently provides for WGRR-FM, WFTK-FM, WRRM-FM. However under the new deal made with Cumulus, THL/Bain forgives the ownership of the three stations to Cumulus Broadcasting.

Basically, Cumulus Media is giving WRRM, WGRR and WFTK to Cumulus Broadcasting free of charge. This skirts the DOJ from any questions. It also allows the deal to slide thru without any problems.

You would think there are red flags popping up about payment, etc. Nothing at all in the Cincinnati attachments. However, looking into Green Bay, I found something interesting.

CUMULUS BROADCASTING must divest Green Bay to Clear Channel and divest two radio stations in nearby Appleton into a new trust. This trust is to serve RENT-FREE to THL/Bain. They will take over operations within 90 days and can operate as Cumulus Media Partners of GreenBay, hence the slide in with Clear Channel.

Confusing..yes! Tricky..yes! Just plain wrong..yes!

However that Kevin Martin for ya. What a wonderful chairman we have.

At first this whole thing looked fishy and I really wondered how they could do it, however now reading the documents, it makes complete sense. Cumulus just picked up Cincinnati without any debt to THL/Bain.

 

[microbob]

I should've known something was up a few weeks ago when it was announced that Cumulus is moving into bigger studios. The FCC has been a joke for a long time when t comes to this knd of thing.

 

[Kent]

Reading these posts it appears there is still some confusion. Cumulus Broadcasting (publicly held and own the Green Bay stations) and Cumulus Media PARTNERS (private corporate partnership with Bain Capital) are two seperate companies.

Believe me, I understand the difference between Cumulus Media and CMP. I've worked for Cumulus Media, and I remember several of my former co-workers got very upset when they found out the Susquehanna stations were not going to be part of the publicly traded company. After all, they had stock in Cumulus and couldn't directly get stock in the larger market stations, which would likely make up more revenue than most, if not all, of the publicly traded company.

The DOJ ruling refers only to Cumulus Media Partners (Bain).

The DOJ ruling will be applied however the DOJ chooses to apply it. The ruling states that WNNF and WOFX must be sold to an "approved buyer" and does not state what conditions would be satisfactory for approval. They have wide discretion as to how to apply the ruling, and they could even reject a sale to a completely unrelated entity. I seem to remember several divestitures that have been rejected by the DOJ because they didn't feel the buyer was financed well enough to keep the spinoffs competitive. Granted, those were retail deals rather than radio, but the DOJ can, and will, block deals at its own discretion.

While I did a search on the application/attachments and didn't find the statement about CMP forgiving ownership of WRRM/WFTK/WGRR to Cumulus (I'd appreciate a link from kentuckymedia to the attachment), this appears to be a very complex deal with several different ins and outs, including requiring DOJ approval and an LMA to a 3rd party, referred to as the "Webb LMA" in some of the documents, until the DOJ signs off on the deal.

 

[wikhradio]

Ok, so would this mean that Cumulus will still own all the Green Bay stations in the end, as Cumulus Media Partners? Basically, no sale is "really" going on, just a bunch of under the table dealings? Or am I reading into this wrong? Just curious if we will have Clear Channel type stations soon over here, or it will remain the same stuff that Cumulus is pumping out to us currently in Green Bay.

 

[exradio]

Check out section 3 of the shared services agreement.

http://fjallfoss.fcc.gov/prod/cdbs/forms/prod/getattachment_exh.cgi?exhibit_id=710411

If I understand what they're saying, Cumulus (ie CBL, Cumulus Broadcast Licensee, an operating arm of Cumulus Media) (WOXF/WNNF) will get facilities, traffic, computers, engineering, employees, most everything from Cumulus Media Partners (CMP, running grr/wrrm/ftk). When CBL requests employees, it is up to CMP to decide which ones they get, and those employees then may not tell any CMP employees what they've been doing for CBL, unless the person they're telling happens to be assigned to CBL. So if a CBL manager says a leased employee sucks, and CMP asks why, can CBL say "sorry, trade secret??".

If this document had been available and been given to Mel Brooks and Buck Henry in the mid-60's, who can possibly doubt it would have been turned into an episode of Get Smart. Imagine a plot where CONTROL is strapped for funds so they start leasing their employees to CHAOS as temps, but those employees must promise that if they come up with plot at one agency destroy the other, they can't tell about it.

Clear Channel was supposedly supposed to divest because its major owners are also major owners in CMP, but CMP is 25% owned by Cumulus and controlled by them. But the government doesn't think that Cumulus has an interest in colluding with CC?? Or the means to do it, when they run CMP??

 

[RumourMonger]

JACK CADE.
Be brave, then; for your captain is brave, and vows reformation. There shall be in England seven half-penny loaves sold for a penny: the three-hoop'd pot shall have ten hoops; and I will make it felony to drink small beer: all the realm shall be in common; and in Cheapside shall my palfrey go to grass: and when I am king,- as king I will be,-

ALL.
God save your majesty!

JACK CADE.
I thank you, good people:- there shall be no money; all shall eat and drink on my score; and I will apparel them all in one livery, that they may agree like brothers, and worship me their lord.

DICK.
The first thing we do, let's kill all the lawyers.

 

[kentuckymedia]

im not with the documents (printed everything out)... but THL/Bain is giving up ownership in Cincinnati for WRRM/WFTK/WGRR for exchange of Appleton WIS and Green Bay WIS. Plus there is the option to place an additional market into THL/Bain if they wish to pair down their overall ownership figures.

See, with this you are swapping percentage of ownership, so instead of talking any cash...they are simply talking percents which no one has to report. Sounds like Cumulus is losing ownership percentage with THL/Bain to make a return investment into Cincinnati.

No payments, just percentage adjustment.

 

[RumourMonger]

So by them gving up "ownership" does that pave the way for CC to replenish their FM's somewhere down the road?

 

[The One]

So, how many of us remember Tony Galluzzo and Tsuami Broadcasting buying WGRR??

DOJ said "no" when they investigated that funky deal. I don't think I would sign that lease for more studios, just yet.

The Department of Justice is unpredictable. AND remember...we've got a new President that takes office on January 20th...which means a new FCC commissioner, and more regulation. Barack Hussein Obama doesn't think like a typical Clear Channel/Cumulus/big corporate bought politician! I think as this plays out, some surprises could be jumping out of the bottle for Lew and the crackers from Atlanta.

CHANGE IS COMING! (on January 20th)

 

[kentuckymedia]

i would like to say no on CC getting more FM signals, however it is possible...

I think you would have to look into the deals with total percentage of ownership with THL/Bain. I think there is a clause in there that may hold them to the fire first before any new signals.

Question is, do you think Cumulus will keep WNNF that terrible HAC hybrid?

 

[Kent]

When CBL requests employees, it is up to CMP to decide which ones they get, and those employees then may not tell any CMP employees what they've been doing for CBL, unless the person they're telling happens to be assigned to CBL. So if a CBL manager says a leased employee sucks, and CMP asks why, can CBL say "sorry, trade secret??".

If this document had been available and been given to Mel Brooks and Buck Henry in the mid-60's, who can possibly doubt it would have been turned into an episode of Get Smart.

Did you see the signature section of the SSA? Whether you have questions for Cumulus Licensing (publicly traded) or Cumulus Media Partners (privately held), you send a written inquiry to the exact same place. Also, the same person signed the document on behalf of both companies! I agree with you that Mel Brooks could have a field day with a document like this!

Clear Channel was supposedly supposed to divest because its major owners are also major owners in CMP, but CMP is 25% owned by Cumulus and controlled by them. But the government doesn't think that Cumulus has an interest in colluding with CC?? Or the means to do it, when they run CMP??

We'll have to wait and see. With the FCC, it's easy to come up with situations that follow the letter of their requirements but completely violate the spirit, and there's little the FCC can do about it. However, the same can't be said for the DOJ. As has been mentioned on other posts, the DOJ is very difficult to predict. However, in the past, it has taken a dim view of people using technicalities to get around its rulings.

 

[Elephant]

If Bain tranfers ownership of Warm/WGRR/FTK to Cumulus Media, then why would the DOJ care? It's NOT a technicality. Bain will no longer have any control over those properties and they'll be in the clear with just their CC stations in this market. The DOJ doesn't care about Cumulus Media, they care about CMP which is now out of the market. Bain has no control over Cumulus Media.

I have to hand it to the Cumulus guys. This is an ingenious plan, worthy of the 90s Jacor days.

 

[titoisradio]

If Bain tranfers ownership of Warm/WGRR/FTK to Cumulus Media, then why would the DOJ care? It's NOT a technicality. Bain will no longer have any control over those properties and they'll be in the clear with just their CC stations in this market. The DOJ doesn't care about Cumulus Media, they care about CMP which is now out of the market. Bain has no control over Cumulus Media.

I have to hand it to the Cumulus guys. This is an ingenious plan, worthy of the 90s Jacor days.

If Barack Obama takes a TR style to corporate regulation (which I hope he does) then this deal will not only be overturned but I believe we could see a new Communications Act that takes ownership rules back to pre-95 & 96 levels.

 

[gr8oldies]

Doubt it. You'd see thousands of stations go dark, and no one is going to buy 7 stations in 7 different markets..least of all non-broadcast companies. Don't assume all the out of work DJs will be able to get financing to buy them. Why would any bank in their right mind finance a business if the government could take the business away by fiat at any time?

 

[robmadden1]

Check this out: http://www.radioandrecords.com/RRWebSite/NewsStoryPage.aspx?ContentID=PdmL9MDVPrI=&

 

[robmadden1]

Allaccess netnews talks about the swap: http://www.allaccess.com/

 

[titoisradio]

Doubt it. You'd see thousands of stations go dark, and no one is going to buy 7 stations in 7 different markets..least of all non-broadcast companies. Don't assume all the out of work DJs will be able to get financing to buy them. Why would any bank in their right mind finance a business if the government could take the business away by fiat at any time?

You may see thousands of stations go dark anyway the way the stock prices are for the corporate system. I don't believe out of work DJ's will be able to buy stations or get the financing for them but do believe other growth companies could possibly be interested...such as professional sports teams or other non-media companies(benchmark Panda Energy purchase of TNA Entertainment LLC, a pro-wrestling company).

The govt can take away a station from a owner in the current system. Licenses are up every 8 years (unless this has changed), stations can be fined and have the license forfeited for various rules violations, why would investors or banks finance those types of risk? Ironically by restricting ownership in the radio industry you are creating competition and reducing the barriers of entry which would still be higher than most other industries. The current system that is in place creates deals like this swap that are very similar to the railroad trusts of TR's days. Not exactly the same but a modern version of a trust via the LMA and subsidiaries. Teddy Roosevelt would definitely not allow such deals to take place. My guess is ownership levels will be more restricted by midway through the first term of Obama in a compromise bill that keeps the Fairness Doctrine out and performance royalties in, along with some pork barrel spending on the side.