The Coming Cumulus Massacre of Citadel

[SirRoxalot]

And the "synergies" continue - at least 14 in Colorado Springs...

http://www.radio-info.com/news/cumulus-continues-its-budget-cutbacks-this-time-colorado-springs

 

[yugoidar]

According to Tom Taylor's report today, Lew Dickey expects to have his $52 million in money-saving (cost cutting) synergies in place by the end of the year and start "fresh" in January.

So the wait shouldn't be much longer for our friends at the Cumulus/Buffalo cluster to learn what their future employment picture looks like. The radio press carries reports daily of those leaving the company from VPs and GMs to jocks and Program Directors. Yesterday, the grim reaper's axe fell in Saginaw and nearby Erie.

Again, I wish the Buffalo folks well in the weeks ahead.

 

[JustPastBuffalo]

Calls to mind a country classic by Merle Haggard that's eerily applicable, "If We Make It through December." Merle always was something of a prophet.

 

[chas108]

Calls to mind a country classic by Merle Haggard that's eerily applicable, "If We Make It through December." Merle always was something of a prophet.

That song actually crossed over to Top 40...a multi-format classic released at another time when the economy stunk. At least there were no Cumudels back then...

 

[SirRoxalot]

In radio, December is the cruelest month. By the beginning of the month, the sales year is essentially done. The beancounters go to work, and the data's ready by the middle of the month. Then management has to decide whether to cut before Christmas, and look heartless, or cut after Christmas, and leave a bunch of people with holiday bills and no jobs. Entercom has been famous for the "Thanksgiving Surprise". Black Friday often takes on a different meaning there.

 

[Jeff Michaels]

So what will they do, hire cheaper labor?

 

[Element9]

Yes, his name is Otto Mation. A reliable source says any RIF may not occur until after football season. Syracuse made some cuts a few weeks ago.

 

[Element9]

Crestview Capital has increased its stake to more than 48% of Cumulus Media Inc.’s common stock (yesterday’s TRI), and now Seeking Alpha says Oaktree Capital’s Howard Marks has bought nearly four million shares of Cumulus in the third quarter, at an average price of $2.99 a share. So far, his investment is down a bit, with Cumulus closing unchanged yesterday at $2.92. But look at the bigger picture – Oaktree’s been a consistent believer in radio (particularly radio + digital) since it backed GAP Broadcasting, then acquired Regent and put all those properties into Townsquare Media. On the service/vendor side, Oaktree is the parent of of Dial Global, which recently acquired and merged with Westwood One, to become public. It also owns vendor/service provider Triton Digital. So look at Oaktree’s nearly $12 million recent investment in Cumulus, and you see a company that continues to bet on radio. (Separately, Oaktree itself is going public under the symbol “OAK.”)

Powerplay in progress. The rich get richer and big fish get eaten by bigger fish. The developing Oaktree-Townsquare-Cumulus relationship is one to watch, especially coupled with Dial Global connection. More network programming lurking around the corner?

 

[TheBigA]

More network programming lurking around the corner?

That's a big leap to make between investment capital and local programming decisions, don't you think?

Crestview is the main player as far as Cumulus is concerned. Their managing partner has a seat on the Cumulus Board. Oak Tree is another investment company with interest in the industry. It's nice to have multiple companies interested in putting money into radio, because as I've said in other threads, there isn't a lot of money out there for aging technologies. So this helps drive up the stock price a few cents, which gives Cumulus some more operating capital to work with, so they can have some breathing room between operations and debt. This was one of the problems for Citadel, because investors lost confidence in the management team, and it was just a downward spiral. That's not a problem now for Cumulus.

 

[SirRoxalot]

So this helps drive up the stock price a few cents, which gives Cumulus some more operating capital to work with, so they can have some breathing room between operations and debt. This was one of the problems for Citadel, because investors lost confidence in the management team, and it was just a downward spiral. That's not a problem now for Cumulus.

Heh. The stock price is actually down since this investement by Oaktree. Cumuless ain't exactly skyrocketing since the Citadel takeover. As far as "confidence" in Cumuless is concerned, it's coming from an investment company that specializes in distressed properties and money manipulation. They've drawn the attention of the SEC in the past.

 

[GeorgeKramer]

Any reason to expect some pink slips to passed out this week, perhaps on Tuesday for the start of the short work week?

 

[SSSKub]

You people HAVE been noticing that they have been hiring people at 50 James E Casey... Not firing... haven't you?? You read an allaccess report and think you're in a clusters mind, look at the facts people.

 

[JustPastBuffalo]

Nobody, in or outside the business, wants to see more pink slips. Especially in Buffalo. At any cluster. Enough already.

 

[SirRoxalot]

Just because some are coming doesn't mean others won't be going, especially with the Bills headed out the door.

 

[SSSKub]

This article specifically sites a "raise" being handed out at 50 James E Casey.

http://www.buffalonews.com/entertainment/article694574.ece

 

[yugoidar]

This article specifically sites a "raise" being handed out at 50 James E Casey.

Yeah, there's one. Kub, how many folks while working for Citadel took major pay cuts over the past couple of years?

Oh, that's right - Cumulus now owns the local stations. And they've been handing out raises right and left across the country since buying the Citadel stations. Right!

I'm betting you'll see more job cuts than you will raises at 50 James E Casey in the days ahead.

 

[jas2525]

This article specifically sites a "raise" being handed out at 50 James E Casey.

Yeah, there's one. Kub, how many folks while working for Citadel took major pay cuts over the past couple of years?

Oh, that's right - Cumulus now owns the local stations. And they've been handing out raises right and left across the country since buying the Citadel stations. Right!

I'm betting you'll see more job cuts than you will raises at 50 James E Casey in the days ahead.

Are you sure that letting the Bills go won't actually benefit the cluster financially? I don't know how much they made from the Bills, but was it enough to offset the cost? They certainly couldn't capitalize on the association the way Entercom will be able to with WGR.

 

[SirRoxalot]

Whether the Bills broke even or not won't change the fact that there will be less production required without the pre-game, in-game, and post-game shows. Add the shows with coaches, players, John Murphy, the ball boy, the Jills - you get the picture - and it means that Cumuless Buffalo is likely to lose positions in both production and sales. Entercom will need to beef up both areas, so they may hire a couple of bodies. With the Cumuless interest in "hubbing", I suspect that there may be a net loss in the market.

Shredd & Ragan may have asked for Josh Potter as part of the return to mornings. The fact that he had to go to Cleveland in order to get a raise on James E. Casey Drive tells you about how free they are with their money. They've also got several sales people who've left without being replaced. Rumor has it that more sales people are looking for a place to land that doesn't have them spending hours a day plugging data into a "sales system" and "attending" Skype meetings.

 

[TheBigA]

Cumuless Buffalo is likely to lose positions in both production and sales. Entercom will need to beef up both areas, so they may hire a couple of bodies.

In other cities, when a team has moved to another radio station, the team has tried to keep the radio crew together. Both on-air and behind the scenes. It's in their best interest to keep the sound consistent, and maintain the relationships with the listeners and advertisers.

 

[Philip_Airtime]

It'll be interesting to hear if 97 Rock follows through on its promise to go with pre- and post-game coverage. It was one thing for WGR to do so. They're an all-sports station. And as a listener, I preferred Schopp and the Bulldog to the 97 Rock post-game show. I found Brent Axe to be too much of a Bills apologist. And there were just too many commercials. Right after the Bills game, Schopp and BD would go for as long as a half-hour before taking a commercial break. I'm sure that will change with WGR now the flagship station. While WGR, because of its sports status, could compete with 97 Rock, I'm not sure if it will work the other way around. Plus, 97 Rock is a music station, so they'll be pissing off listeners who want classic rock. That's not to say the 97 Rock morning show and Shredd and Ragan shouldn't be offering Bills coverage on their weekday shows. They should, and I hope they will. I tuned in Shredd and Ragan on Mondays this season to hear their game analysis. But I just don't know if gameday coverage will attract listeners.