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Voting power at Cumulus

M

moshewx

So now Cumulus took over Citadel. Done deal. The Dickey brothers owned most of the supervoting shares of CMLS. But now, they issued tens of millions of new Class A shares. Do they still dominate the voting power of Cumulus?
 
That's an interesting question. Certainly the issuance of new shares dilutes the value of the existing shares. I went through the SEC filing to determine exactly what percentage of the company the brothers own. From what I can see, the various banks and investment companies own the large part of the voting shares. Crestview Partners was just made a member of the Board, since they hold a big chunk of the new debt. The merger of Citadel and Cumulus also allowed the Dickeys to combine Cumulus Media Partners (which bought Susquahana a few years ago) into the pile. That allowed the Dickeys to get some of their money back from that deal. Since I haven't found the actual stock breakdowns here, my conclusion is that the brothers don't dominate voting power at this time. They instead receive a management fee for running the company, which is owned by the lenders. However, all of their bonuses and other consideration will be paid in stock, which will strengthen their voting power as the company grows. I think we'll know for sure once the first combined and unified statement from the new company is released.
 
THE BIG A: Thanks for the information. I looked through the SEC reports as well, and I think that, at the moment at least, the Dickeys do not have voting control. They do own all the CLASS C shares, which have ten votes per share. But there are almost 300,000,000 CLASS A shares with one vote each now. The Cs have ten votes each. It will be interesting to see if they will get CLASS A or C shares as bonus. I'm assuming it will be A.
 
moshewx said:
It will be interesting to see if they will get CLASS A or C shares as bonus. I'm assuming it will be A.
Click to expand...

I agree. They're both young guys and see this as at least a 10 year project. If they succeed in fixing this mess, they'll be rich and they'll get voting control. But voting control won't matter if they fail.
 
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