From what I've read and heard, Citadel's problems aren't the result of their medium market radio stations, but their major market clusters which are under-performing and the extreme weight of debt service.
Judy Ellis and Farid Suleman may be living on borrowed time, but it's not likely they worry about it because each is said to have a platinum parachute.
The guy to watch is
Ted Forstmann who owns the largest block of Citadel stock, outside of the 52% Reverse Morris Trust block owned by Disney shareholders. Technically speaking, Disney shareholders own Citadel. Forstmann is a dynamic and mercurial personality whose patience may be running out as he looks at a share price under 20 cents.
As to suggestions of the whole business going bust, this is not a good scenario and I wouldn't like to see it happen for many reasons. Too many of my friends' lives would be disrupted, mostly men and women on the bottom end of the food chain. Think Jack is an uninteresting format because it's mostly unstaffed? If the business goes bust, we'll see more Jacks, Freds, Mikes and Fickles than could ever be imagined. Stations would automate middays and nights, and the only live daypart(s) would be morning drive (and possibly p.m. drive.)
As of this writing, credit is ridiculously tight. Banks aren't lending to enterpreneurs who want to re-create the good old days of the radio business, especially at a time when radio may have a lower start-up lending score than bars and restaurants. Like it or not, lenders, banks and Wall Street perceive of the economics of radio to be highly unfavorable. Also, it's not likely that Entercom, Citadel, Cumulus, Emmis, etc. are going to spin off clusters for less than what they believe to be fair market value. The worm turns (to quote Willem Dafoe in "Platoon.")
The business was "sold" to Wall Street and venture capital investors as a way to make lots of fast money: Buy, sell, swap, trade up, get big and get out. Consolidation looked very good on paper and for a while it worked, then reality set in and we all know what happened. The chickens have come home to roost.