Cumulus Q3

[JustPastBuffalo]

Cumulus offers its 3rd Qtr state of the company. Some light reading to cure insomnia can be found here: http://www.marketwatch.com/story/cumulus-reports-third-quarter-2012-results-2012-11-05?siteid=nbkh

Tom Taylor Now http://somethinglikenothing.net/ttn/ttn-11062012.html (his new daily letter) mentions Cumulus' call wherein Lew Dickey talks about shedding unprofitable sports franchises, specifically the Buffalo Bills on 97 Rock.

In two cases, Cumulus says it let “money-losing” sports franchises go. Those were L.A. talker KABC (790), no longer carrying the baseball Dodgers, and classic rock “97 Rock” WGRF, Buffalo, saying sayonara to the NFL Bills. In other cases, Dickey says they cut “some large non-traditional revenue events that were negative” in terms of return on investment. There were also some talent contracts that also were apparently judged to be money-losing, “and a couple of format shifts.”

It's good, albeit tedious, reading.

 

[SirRoxalot]

As I read it, revenues are down, operating expenses are up, management costs are down (goodbye, Farid), interest expenses are up, and cap-ex is up when you compare the pro-forma numbers (essentially the old companies results combined). What it really shows is that Cumulus was in terrible shape prior to the "merger", and that the "merger" likely saved it from bankruptcy.

I wonder if there are any markets where revenue is up for Cumulus. I can tell you that radio sales professionals locally find the Cumulus sales reporting systems onerous and anti-productive. There are reportedly a LOT of empty cubicles at 50 James E. Casey.

 

[TheBigA]

What it really shows is that Cumulus was in terrible shape prior to the "merger", and that the "merger" likely saved it from bankruptcy.

Maybe...a way to kick the can down the road, although now the can is a whole lot bigger. Investment companies seem to be very willing to do that. Even with all that debt, no one balked at extending more credit for Cumulus to buy a second FM in NYC. In my view, however, they have yet to really begin to benefit from the synergies they talked about a year ago. Maybe that's on the docket for next year.

 

[SirRoxalot]

You might want to pay attention to who really owns Cumulus. It's certainly not the Dickey boys. Most of it's owned by the secured creditors from the old Citadel. They're the ones collecting the profits, as well has holding the paper. The Dickeys simply replaced Farid at the head of the company, and they had to swallow a bitter $38-million pill to make that happen. The "synergies" are supposed to be in place already. Management costs are down. A big problem is that sales people in the larger markets have fled the computerized systems that Cumulus "pioneered", along with their daily 8 AM sales meetings and silly, small-town rules. I've heard that Buffalo's not the only former Citadel market with a lot of empty cubicles.

 

[TheBigA]

You might want to pay attention to who really owns Cumulus.

Thanks for pointing out the obvious.

The "synergies" are supposed to be in place already.

Not completely. The building blocks are in place, but they haven't pulled the trigger on the bigger picture. Personally I'm surprised it's taken this long. But perhaps by 1st Q of 2013, the full plan will be in place.

 

[SirRoxalot]

You might want to actually read the report cited. Cumulus says that the "synergies" are in place.

 

[TheBigA]

You might want to actually read the report cited. Cumulus says that the "synergies" are in place.

That may be what they say, but I see some bigger changes coming.