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Cumulus to buy CBS stations?
- Thread starter Surfer
- Start date
Jerry Del Colliano has been predicting this will happen in 2014. He's saying CBS head Les Moonves wants to buy a movie studio and needs the proceeds from the sale radio to fund it. He's also saying Cumulus needs to buy a company with no debt to avoid bankruptcy, as it was able to do with Citadel. He also is claiming Lew Dickey will overpay and that CBS will get a huge tax break by selling to a radio company.
That certainly is all logical, but who knows? I remember a couple of years ago when Jerry wrote that Cumulus was about to buy Lincoln Financial.
I and virtually everyone else who loves the radio business are hoping it doesn't happen. That really would be the end of radio.
That certainly is all logical, but who knows? I remember a couple of years ago when Jerry wrote that Cumulus was about to buy Lincoln Financial.
I and virtually everyone else who loves the radio business are hoping it doesn't happen. That really would be the end of radio.
RoddyFreeman said:
Well, wouldn't be the end of radio, but it would just get worse. We have a few bright shining stars among the stations in Atlanta, but they are nothing like what we had 20+ years ago.
(Suddenly, I feel old.)
Unless CBS takes a note, I doubt Cumulus could swing that much debt and stay public. I guess they could do a CC / Bain style deal, but would the Dickeys remain in control?
jabba17 said:
Buying CBS would actually lower Cumulus' debt percentage by spreading it over far more income. That's exactly what Cumulus did when it acquired Citadel. It needed Citadel to spread its debt over to avoid bankruptcy just as it's going to need CBS to do the same thing.
Would love to see how this would effect V103.
RoddyFreeman said:
What you are saying then that Cumulus is really a debt version of a Ponzi scheme. Sooner or later Cumulus will run out of groups to purchase and be a bigger version of Citadel. I am not a fan of Cumulus or employee but, I believe the Dickies are smarter than to lose the family business to debt. I doubt that the investment funds that have Cumulus stock would be "happy" to lose their investment in bankruptcy court. After the Citadel* mess, I am sure anybody who would loan money would really look at the deal for it's ability to get principle and interest back. IMHO Cumulus got Citadel on the cheap due to the overall financial conditions in the US. It was a good deal. There was no real equity to purchase If I had had the funds, I would have took it too. Unless CBS gets cash, which they would need to buy a studio, I just don't see CBS giving up the positive cash flow from the radio division, for what could be "junk bonds". CBS will want cash.
* disclosure I shorted Citadel via a puts. I am not offering not investment advise, or rating any bonds.
Wildstyle Kdm said:
Especially put an end to the legacy of one of the last decently program urban stations in the US. It is the 1 of the last 2 full-service urban contemporary stations in a major market.
Can't tell if this is a nationwide rumor or just ATL, but I'd love to see Cumulus buy Now 92.3 in New York and flip it to Alternative!
atlantaboy said:
Cumulus had the chance to do Alternative with WNSH they went country.
IMHO you can thank "Occupy Wall Street" protesters for somehow creating the perception that Alt. listens are not an attractive ad agencies that control most of the advertising revenue in the NY market.
Maybe in ten + years NYC will get an on the air alternative station.
secondchoice said:
That was before the Radio 105.7 model started taking off, though - now you've got a large number of softer leaning Alternative stations all trending up - honestly, I don't think Cumulus execs even thought of that idea as an option
secondchoice said:
Huh? First of all, ad agencies are on Madison Avenue, not Wall Street. Second, NY's previous alternative station underbilled other formats in NYC, mainly because of terrible ratings. This has nothing to do with perception, but the reality that the audience for this music prefers other music delivery platforms to OTA radio.
secondchoice said:
Cumulus is in far less debt than most people realize. The company buys almost everything in stock and spends very little cash. At least 75% of the Citadel deal was a stock-for-stock swap.
Of course, that brings up a separate risk, which you kind of elude to in your post. If I remember correctly, the Dickeys already own less than half of Cumulus after the deals to absorb Cumulus Media Partners and Citadel. I seem to remember reading the Dickeys own around 40% of the company.
As much as I'd love for it to happen, Cumulus probably wouldn't flip Now for the same reasons CBS won't. What's more likely under this situation is for Now to become a Q100 clone. :-Xatlantaboy said:
This Cumulus buying CBS thing has been gossip since I've been on these boards and there are two reasons I'm not buying it:
1. The Cloud has been rumored to be buying clusters in markets like Vegas, San Diego, and Cleveland for several years now, but they can't agree on a price. If they can't agree on a price for a handful of markets, how could they possibly agree to a price involving much more lucrative markets?
2. Wouldn't buying CBS put Cumulus over the market ownership limits in most of the markets CBS operates in?
TheBigA said:
I know that a large number of the agencies are on "Madison Ave". A large percentage of agencies work for and are under the thumb of publicly traded firms "Wall Street". There is no way an agency would do intentionally something to make the client mad. If a client(s) wanted to reach the Alt. audience with a large percentage of the of a big budget, besides social network sites and Hulu, there would be major bucks left over for OTA radio.* How else could you reach these folks?
Off topic but needs to said.
IMHO The student loan "issue" (over priced degrees with out any real job prospects) will make the housing mess look like a small problem.
secondchoice said:
Really? You know this how?
Why not admit the reason is because alt rock audience chose not to listen to alt rock radio in NYC when it was available. They prefer to use personal music devices so they can hear their personal favorites and not have to listen to artists or bands they don't like. The ad agencies (the ones you say are "under the thumb" of Wall Street) know they can reach that audience in other ways besides OTA radio. And they do. Why would they spend money on social media, Hulu, and the like if they know it offends Wall Street? Makes no sense.
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