Connoisseur is not buying Cumulus. A separate entity headed by the CEO of Connoisseur is making the bid.
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Report: Jeff Warshaw Leads Effort To Acquire Cumulus Media
- Thread starter charles1234
- Start date
When there is a hostile bid, the offering party is buying the shares at an offered price. There is generally no due diligence as the purchase involves stock, not the individual properties.
If Warsaw gets Cumulus then they would have to figure out how to deal with Los Angeles given that Cumulus has KABC-AM as Los Angeles only Cumulus managed station.
Also Disney for now is holding their only radio station left KRDC which is for now simulcasting the now Good Karma owned KSPN Los Angeles the ESPN Radio affiliate. Cumulus would need to form a cluster in the Southland if they are to be viable in Los Angeles like KABC-AM and KRDC.
Also Disney for now is holding their only radio station left KRDC which is for now simulcasting the now Good Karma owned KSPN Los Angeles the ESPN Radio affiliate. Cumulus would need to form a cluster in the Southland if they are to be viable in Los Angeles like KABC-AM and KRDC.
Zero plus Zero equals zero.
Probably, though I'm weary of any program director (like 95.7 the vibe KC) that thinks it's a good idea to dig up Soulja boy. This station really does sound like Jan Jefferies era cumulus pop.
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Equivalent and appropriate.
If this were to play out, I wonder if Cumulus would be taken back to primarily being a medium to small market company. They do have some successful large market clusters like Dallas, Chicago seems to do okay, KNBR in San Francisco, KRBE in Houston, WMAL in DC, the Atlanta cluster isn’t a failure - but would they hang on to markets like LA where they just have the dinosaur KABC, and these other top market clusters that are small to try to sell and have these dinosaur AMs like KGO, WLS, etc?
I wonder if in some of the larger markets we could see these single or 2-3 station clusters be dealt off to another operator, potentially for a swap for smaller market properties and some cash or an outright sale to pay off debt, reduce expenses, or further expansion. Essentially more of what Cumulus did in 2019 with exiting NYC and shedding properties in DC, Atlanta, LA, etc.
I wonder if in some of the larger markets we could see these single or 2-3 station clusters be dealt off to another operator, potentially for a swap for smaller market properties and some cash or an outright sale to pay off debt, reduce expenses, or further expansion. Essentially more of what Cumulus did in 2019 with exiting NYC and shedding properties in DC, Atlanta, LA, etc.
Adding LBO debt onto the assets that currently and collectively comprise Cumulus is a terrible idea, IMO, and would lead over time to further staffing reductions and deterioration to the on-air product. The company's ability to financial withstand the next major recession would become compromised.
The offer presented should be lucrative to Cumulus shareholders and Warshaw (who'd be using other people's money) but hardly anyone else. Cumulus employees should be rooting for rejection of the offer. This movie has played previously multiple times.
The offer presented should be lucrative to Cumulus shareholders and Warshaw (who'd be using other people's money) but hardly anyone else. Cumulus employees should be rooting for rejection of the offer. This movie has played previously multiple times.
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What makes you think they haven't been trying to sell those stations for the past three years?
The question the board should be weighing is how much new debt does this offer create, and what does that mean for the future of the company. I wonder if the bankruptcy judge might even have a say here. Because this is a company that has been selling assets specifically to reduce debt, and now an offer is presented that recreates the situation that the bankruptcy sought to solve. Not all money is equal. The money that comes with strings is not as good as cash. We saw that years ago when Ted Turner attempted to buy CBS.
No, the long-term prospects of the deal are wholly irrelevant to the board of Cumulus. That question would be relevant if Cumulus was making the bid and would be the surviving company, but that is not the case here.
A Leveraged BuyOut does not mean additional debt. The offer includes assumption of existing debt, but this is a purchase using private equity capital. In other words, the buyers pay for the property and continue to service the current loans:
In the news stories, I do not see further borrowing as part of this. The private equity people are not reported to be taking out new loands to buy this... just taking over the old ones and paying off the equity.
Were I at Cumulus, I'd be concerned about the disposal of non-productive assets and small non-synergistic clusters which might be sold. But overall, this sounds like a good way to reorganize the group and make it better, particularly if... as I just said... the non-productive stations and divisions are eliminated.
By going private, they do not have to report to exchange traded share holders and can take losses for several years while they clean house.
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"Long term" is a matter of opinion. They've operated as a debtor company for four years since exiting bankruptcy. So they're obviously not in a big rush to get rid of the company.
They've been in the process of doing that as opportunities arise. In addition to the major market deal to EMF (plus FMs in LA and WABC), I recall they sold off Dothan AL, Albany GA, and a group of stations in PA. They've shut down a few AMs in the south. They've quietly spun off businesses such as TM Studios. They still have a bunch of "non-productive assets" that they got from Citadel, so there's a lot of housecleaning still to be done.
It's defined in this case as "after the proposed buyout would close".
You might need to check again. As far as I can tell, the debtholders from the 2018 bankruptcy have exited their equity stakes received during the bankruptcy.
That may explain why they're not on the board. If they've settled with them, then that changes the situation.
They haven’t, to my knowledge hinted at or shown a desire to sell anything other than what they sold in 2019. I would be shocked if a company like iHeart has not expressed interest in a station like KRBE. If they’ve tried to sell them they must be in a position where what they have is working for them or the other potential companies aren’t interested or aren’t offering enough.
Out of curiosity, are stations like KABC, KGO, KSFO or even WLS even very profitable? I mean, they clear WW1 programming…
As I said in post #36, they've been quietly selling off clusters and stations in small markets, and even shutting down a few AMs. So it's been an ongoing process. Right now there is a glut of AM properties on the market in LA, and KABC is not the best of the available stations. The station is based in the Westwood One office in Culver City, so the operating costs are pretty limited. It's a similar situation in NY with WFAS. It's in the Cumulus corporate office. Cumulus has some type of corporate accounting office in Houston, so they can run KRBE fairly efficiently. KGO is combined with KNBR and KSAN. WLS is combined with several FMs and a major Midwest sales office. In other words, these stations aren't strictly operating as distinct stations, but combined with other company operations.
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