Cumulus and Citadel

[jabba17]

http://www.radio-info.com/news/cumulus-in-exclusive-negotiations-to-acquire-citadel-says-cnbc

We all know that this would affect Q100. How would this affect Rock100.5, [email protected], Kicks, and ATL Greatest Hits? Would Cumulus blow up any formats?

I see that this deal, as proposed, is CMLS stock + cash. Is the cash coming from Cumulus Radio Investors? I guess the Citadel stations would be owned by CMLS and not CRI.

Didn't--or isn't--Cumulus Broadcasting buying out Cumulus Media Partners, reducing the number of Cumuluses to two (not counting Dickey Broadcasting)?

 

[Bengalsfan]

Cumulus can hardly afford to run the stations they have now. How do they propose to run more stations along with the 24 hour networks and satellite distribution facilities.

This is a train wreck in the making.

 

[radioboy]

I predict a bloodbath for employees. Bengalsfan has it nailed.

 

[littlejohn]

I hear the deal is done. Can anyone confirm?

 

[Surfer]

I disagree. I think they will do quite well with this purchase. Far better than most would even BEGIN to imagine. ;D

 

[carolinaradio]

If they have any sense, they should buy 94.1 and have a full stable on FM. JMO.

 

[jabba17]

If they have any sense, they should buy 94.1 and have a full stable on FM. JMO.

I agree. On another thread I mentioned Cumulus then spinning off 100.5 to CC to use for WGST-FM. If they got WQXI they could sell that to Dickey Broadcasting and lock up sports radio.

 

[TheBigA]

I disagree. I think they will do quite well with this purchase. Far better than most would even BEGIN to imagine. ;D

My view is that if they can sell off the dogs (of which there are many), they might do well. What Cumulus needs is access to major markets. What they don't need are more low power AMs in rural areas. They need to find a way to get rid of the latter.

 

[carolinaradio]

If they have any sense, they should buy 94.1 and have a full stable on FM. JMO.

I agree. On another thread I mentioned Cumulus then spinning off 100.5 to CC to use for WGST-FM. If they got WQXI they could sell that to Dickey Broadcasting and lock up sports radio.

If I were Cumulus, I would buy 94.1 and make it straight up AC (make it better than B98.5, but hey, what couldn't be) and Q100 would be straight up CHR. Great idea about sports. Seeing who is selling WQXI and WSTR though, I bet they want a fortune.

I agree with the above poster that Cumulus and even Citadel are in some dog markets. CC exited a lot of those smaller markets several years ago, they may be smart to do the same. Turn those back over to locals (the Eugene, OR, Appleton, WI, Grand Junction, CO types). This purchase would give Cumulus what they've needed for ages...more stations in bigger markets like Dallas, Nashville, San Fransisco, etc. They don't even have to be in the largest markets, but this will get them in some pretty important ones that they need to be in.

 

[jabba17]

If they have any sense, they should buy 94.1 and have a full stable on FM. JMO.

I agree. On another thread I mentioned Cumulus then spinning off 100.5 to CC to use for WGST-FM. If they got WQXI they could sell that to Dickey Broadcasting and lock up sports radio.

If I were Cumulus, I would buy 94.1 and make it straight up AC (make it better than B98.5, but hey, what couldn't be) and Q100 would be straight up CHR. Great idea about sports. Seeing who is selling WQXI and WSTR though, I bet they want a fortune.

I agree with the above poster that Cumulus and even Citadel are in some dog markets. CC exited a lot of those smaller markets several years ago, they may be smart to do the same. Turn those back over to locals (the Eugene, OR, Appleton, WI, Grand Junction, CO types). This purchase would give Cumulus what they've needed for ages...more stations in bigger markets like Dallas, Nashville, San Fransisco, etc. They don't even have to be in the largest markets, but this will get them in some pretty important ones that they need to be in.

Supposedly Cumulus and Lincoln were in negotiations for Star 94 and WQXI, but Lincoln wanted more than Cumulus was willing to pay. Lincoln still wants out of radio, but only for the right price. Now that Cumulus has all that CRI cash...but a bad deal would still be a bad deal, unless having the Citadel stations makes Star 94 more attractive as part of a mega-cluster.

There is something to be said for small markets. That's how Wal-Mart got so big, and there are other companies that have done this like Belk, Peebles, and Carmike Cinemas. When you're the only game in town you have a lot more say-so over prevailing pricing. Yes, I know the FCC ownership limits are smaller for smaller markets, but being the only big fish in a small pond counts for something, especially with regional buys and dealing with larger advertisers vs. mom-and-pop establishments with tiny ad budgets.

Although I wish Cumulus hadn't flipped WWFN Fun 100, Lake City/Florence, SC (great oldies station) to sportstalk 100.1 The Fan (exact same branding as WCNN 680). Clever reuse of calls, though.

 

[InSearchOfGear]

If they have any sense, they should buy 94.1 and have a full stable on FM. JMO.

I agree. On another thread I mentioned Cumulus then spinning off 100.5 to CC to use for WGST-FM. If they got WQXI they could sell that to Dickey Broadcasting and lock up sports radio.

The only thing standing in the way of improved coverage on 100.5 is CC's station on that channel in Greenville. No doubt they'd love to have it, because only they can upgrade it. If they can go any farther than C2 non-directional with a downgrade in Greenville I'll leave to be answered by any engineers that would like to weigh in. Not sure about any other shortspacings.

 

[jabba17]

If they have any sense, they should buy 94.1 and have a full stable on FM. JMO.

I agree. On another thread I mentioned Cumulus then spinning off 100.5 to CC to use for WGST-FM. If they got WQXI they could sell that to Dickey Broadcasting and lock up sports radio.

The only thing standing in the way of improved coverage on 100.5 is CC's station on that channel in Greenville. No doubt they'd love to have it, because only they can upgrade it. If they can go any farther than C2 non-directional with a downgrade in Greenville I'll leave to be answered by any engineers that would like to weigh in. Not sure about any other shortspacings.

Supposedly, Susquehanna had some kind of deal with WSSL to do just that, but CC killed that deal when they bought WSSL's owner (or maybe it was when Cumulus bought Susquehanna, CC not wanting to cut any deals with larger competitors?). WSSL is a C0 at 100K. WNNX is a C2 at 12.5K. I wonder if CC could just up the power of WNNX and lower the power of WSSL, leaving the classes alone. Flip 100.5 to mono for a little more range.

IIRC the original plan involved a tower move for WSSL, moving the tower towards Spartanburg, that Susquehanna was going to pay for, and not just power tweaks.

There is also WUSY 100.7 (also C0 @100K and owned by CC), a first-adjacent in Chattanooga to consider. US 101's signal can often be picked up well in the NW quadrant of the ATL. Not sure if this matters if it is true that Susquehanna and WSSL had a deal to trade off coverage.

Side note: It must be good DXing conditions because Whistle was stomping all over Rock100.5 the last couple mornings. I was also picking up 99.1 out of Macon and 94.5 out of Greenville really well.

 

[RoddyFreeman]

CC did not kill the deal with Susquehanna and WSSL. WSSL agreed to downgrade to a C0 for a boatload of money. Then 100.5 in Atlanta increased power from 3KW to 12.5KW. This was in 2005.

 

[jabba17]

CC did not kill the deal with Susquehanna and WSSL. WSSL agreed to downgrade to a C0 for a boatload of money. Then 100.5 in Atlanta increased power from 3KW to 12.5KW. This was in 2005.

Do you think that there would be any more room for 100.5 to power up if WSSL powers down, without bumping into WUSY?

 

[ck dexter haven]

Factor out talent costs, and it costs almost the same to run a small market operation as it does a station in NYC or other majors. The fixed and capital costs are about the same. So it comes down to unionized markets and talent expenses.

Cumulus, once they acquire the Citadel properties, would be smart IMO to dump the underachievers. Use whatever they get from that to pa down debt.

But the real problem with Cumulus is how they treat their employees. It's not a happy company to work for, based on comments from my friends who work there. The Dickeys have been so concentrated on building their empire that they've lost touch with how to build employee morale. They need a good culture infusion of some kind...it's hard to do, especially if deep down they don't believe it's necessary. I'd argue that in the changing landscape of what used to be "broadcasting", it's more important than ever to hire and retain good people who can produce great content and distribute it ubiquitously and agnostically.

 

[secondchoice]

Would Citadel be worth more “split up”?

Citadel is undervalued. Somebody is going to buy it. Many of the current shareholders are not shareholders by choice but as a result of their bad luck or poor judgment to be Citadel lenders. There is some major money to be made with Citadel in the hands of a good operator. The real question: who is or would be the good operator? When the radio business picks up the Citadel stations can generate some serious cash. Somebody with enough capitol and little or no debt could easily take Citadel and run it for a nice profit. IMHO CBS would be a good candidate if it were not for the cap on number of stations in a several key markets. CBS / Citadel would work very well in Atlanta V103, 92.9, 101.5, 106.7 and the AM. There are a couple of “ifs” that anybody who takes Citadel (Cumulus) has to work around.

If (Cumulus) is willing to spend the time and money to “work” on some of the Major market operations (mainly the old ABC radio O & O’s) by improving with better programming, adding more signals to sell not just an AM and FM like Chicago and New York. I believe Citadel has already done plenty of cost cutting before and via bankruptcy. Cost cutting will not “save the day”. There has to be some “top line” growth.

If Cumulus is not in the position of having to grow revenue just to pay their debt.

Another big if: Can Cumulus and Citadel can mesh or blend “corporate cultures”. I believe ck dexter haven has a good point.

 

[InSearchOfGear]

Supposedly, Susquehanna had some kind of deal with WSSL to do just that, but CC killed that deal when they bought WSSL's owner (or maybe it was when Cumulus bought Susquehanna, CC not wanting to cut any deals with larger competitors?). WSSL is a C0 at 100K. WNNX is a C2 at 12.5K.

You have some of the facts right. Actually, there was a deal for Susquehanna to pay for WSSL's move, but it was contingent upon actually getting the College Park CP. In the interim, CC bought WSSL and the deal was cancelled. The deal for WSSL to downgrade to C0 for cash came later. 100.5 signed on as a directional C3. At the time, had the WSSL deal move survived, they would've been able to sign on as a C1, I believe. That was a decade ago. Could be other shortspacings now. At the very least, if WSSL downgraded, WNNX could be a non-diectional C2 from their present location.

 

[jabba17]

Could be other shortspacings now.

There's also WNSY 100.1 as a second-adjacent, but I would think that US 101's size on a first-adjacent would be more of a stymie.

 

[InSearchOfGear]

Could be other shortspacings now.

There's also WNSY 100.1 as a second-adjacent, but I would think that US 101's size on a first-adjacent would be more of a stymie.

Ahh, but you forget something. CC owns 100.7 in Chattanooga, and that signal is waaaaaay bigger than it needs to be.

 

[atlantaboy]

If they have any sense, they should buy 94.1 and have a full stable on FM. JMO.

I agree. On another thread I mentioned Cumulus then spinning off 100.5 to CC to use for WGST-FM. If they got WQXI they could sell that to Dickey Broadcasting and lock up sports radio.

If I were Cumulus, I would buy 94.1 and make it straight up AC (make it better than B98.5, but hey, what couldn't be) and Q100 would be straight up CHR.

No way a market as big (and heavily suburban) as Atlanta could go without a Hot AC