What if Entercom had gotten Citadel?

[majicrockstar]

Now that they are saying Entercom is or was a close second in the Citadel sweepstakes, How would the radio landscape in Buffalo have changed if this had really went down?

BTW Carl Russos facebook status said "Well it looks Like i work for CUMULUS Radio Now" today.

 

[fybush]

They'd essentially have had to spin one whole cluster's worth of stations. The cap for one owner in Buffalo is either seven or eight stations, with no more than either four or five on one band. (I think it's 7/4, but would have to do a little research to be sure.)

I'd think the must-keeps would have been WGR, WBEN, WYRK, WJYE, WTSS, and either WKSE or WBLK. KB probably would have stayed, and you'd have a spin-off cluster with WBUF, WLKK, WWWS and either WBLK or WKSE.

But that assumes that the goal is simply to create the strongest possible cluster for the merged company, and the politics don't always work that way, especially when revenue caps are figured in. Getting Justice Department and FCC approval for a merger like this is often easier when the spinoffs include some stronger facilities, so it's entirely possible that a WJYE or WTSS or a KB might have been among the spinoffs, too.

 

[chas108]

Re: What if Entercom had gotten Ciadel?

Although all I know is secondhand accounts...stuff I've read from people like Jerry DelColliano and here on R-I, something tells me this is a giant bowl of Not Good.

I don't know how Entercom is now. Back in 1992, when I went to work at my current station, they were owned by Entercom...I wasn't impressed. They struck me as a shoestring operation, only investing in necessary cap-ex in the last year they owned the place. I've also worked with talent who had put in time at Entercom in Rochester and they're weren't very complimentary either.

There are some horror stories out there about Cumulus...corporate spying on sales meetings from headquarters in Atlanta, one-person operations, firing people then suing them to try to enforce their non-competes...etc.

I hope and pray for the sake of all new Cumulus employees reading these words that the stories are all isolated incidents.

 

[majicrockstar]

From my scoresheet wouldnt it be
Entercom FM- WKSE Kiss 98.5 WTSS Star 102.5 WLKK 107.7 The Lake
AM WGR WBEN WWKB
Citadel FM WGRF 97 Rock, WEDG 103.3The EDGE, WHTT Classic Hits Oldies Mix
AM i have no clue

 

[TheBigA]

Re: What if Entercom had gotten Ciadel?

Although all I know is secondhand accounts...stuff I've read from people like Jerry DelColliano and here on R-I, something tells me this is a giant bowl of Not Good.

The ONLY thing that would be "good" for Jerry would be re-regulation that would bring radio back to the 60s. Only problem is that it's not the 60s any more.

Everyone wants "real broadcasters" rather than accountants to own stations. The Dickeys, for better or worse, are longtime broadcasters. It's all they know. They aren't buying stations for short term gain. They're very likely going to hold whatever they buy for a long time. Perhaps 25 years. So say what you will about them, this isn't just to cash in and get out. The bad news is if you dont like the way they work, it doesn't leave many choices.

Reagrding Entercom, they don't seem to run a lot of syndication on their music stations, so that probably would have been better had they bought these stations. The bad news is they'd also be buying a syndication company, and I imagine they'd want that part of the business to succeed.

 

[SSSKub]

To Scott:


Why would WBLK be in play at all?? I think you have to do a refresher on your cluster knowledge

 

[chas108]

Re: What if Entercom had gotten Ciadel?

Although all I know is secondhand accounts...stuff I've read from people like Jerry DelColliano and here on R-I, something tells me this is a giant bowl of Not Good.

The ONLY thing that would be "good" for Jerry would be re-regulation that would bring radio back to the 60s. Only problem is that it's not the 60s any more.

Excellent point, A. And Jerry's said as much. Problem is, when you adjust for inflation, nobody's bringing in the kind of revenue they did 40 years ago. Especially in shrinking markets.

And it's also well noted that the Dickeys are indeed broadcasters. The first time I heard of Farid Suleman was when my station was bought by American Radio Systems, which was promptly sold to CBS.

I'd think the must-keeps would have been WGR, WBEN, WYRK, WJYE, WTSS, and either WKSE or WBLK.

Isn't 'YRK owned by Townsquare? That was a CBS property back before they exited WNY and sold to Townsquare predecessor Regent.

 

[JustPastBuffalo]

Buffalo, if I'm reading the rule correctly, is a six pack market, e.g., a 4 and 2 combo; but my friend Tom Atkins insists it's a 5-2 market. I'd defer to anybody who had a better interpretation of the rules. Regarding the estimable Scott Fybush [Rox has tagged you, buddy ] WJYE and WYRK were part of the CBS Buffalo cluster until Regent spent $125 huge to buy WYRK, WJYE, WBLK, WBUF (all FM) and WECK (AM) which was later spun to Culver Communications for 1.3 extra large.

If Entercom got Citadel, I believe the gem would have been 97 Rock and the Buffalo Bills Radio Network. The combo would have been WGRF, WEDG, WTSS and WKSE on FM and WGR and WBEN on AM. Entercom (IMHO) would have spun WHTT and WLKK and WWKB and WWWS, with non-compete language applied to WWKB going talk. I can think of at least two former Buffalo GMs (and their groups) who might have been interested in the spin offs.

As to my bud Cahl Russo, he doesn't work for Cumulus yet. From what I've read, it's a letter of agreement/intent. There's a lot of haggling to be done, "i's" to be dotted and "t's" to be crossed.

 

[fybush]

To Scott:


Why would WBLK be in play at all?? I think you have to do a refresher on your cluster knowledge

D'oh! :-*

Yes, I was indeed getting my Citadels and my Townsquares all tangled up.

Shame on me!

 

[chas108]

To Scott:


Why would WBLK be in play at all?? I think you have to do a refresher on your cluster knowledge

D'oh! :-*

Yes, I was indeed getting my Citadels and my Townsquares all tangled up.

Shame on me!

LOL...Scott, you've contributed much to my personal knowledge and I appreciate it. I doubt I'm alone in that assessment. NERW is a must-read and I also enjoy the tower site stories.

 

[Element9]

Re: What if Entercom had gotten Ciadel?

Although all I know is secondhand accounts...stuff I've read from people like Jerry DelColliano and here on R-I, something tells me this is a giant bowl of Not Good.

... The Dickeys, for better or worse, are longtime broadcasters.

More of the latter rather than the former, according to the three people I know who worked for them. Chas108, you're close. But this is more than a bowl full, it's a toilet bowl full of steamin' hot wings and bad beer sh*t the day after.

It's all they know.

Or what little they know.

They aren't buying stations for short term gain. They're very likely going to hold whatever they buy for a long time. Perhaps 25 years.

Twenty five years? And you believe it when Lew & Company say they're in it for the long haul?

Reagrding (sic) Entercom, they don't seem to run a lot of syndication on their music stations, so that probably would have been better had they bought these stations. The bad news is they'd also be buying a syndication company, and I imagine they'd want that part of the business to succeed.

In Buffalo, Kiss air Seacrest middays and Star airs Kim Iverson at night.
_________________________________________________
Who knows what will come of the Cumulus-Citadel maneuver. JDC thinks the principles will dance for a long time, but if the deal gets done it's a case of going from rotten to rancid. You have to feel some sympathy for the people at the Buffalo cluster. After going through Citadel bankruptcy, vacation, salary and staff cuts, here comes another long, drawn out mindf{}ck. A former Citadel sales guy tells me he's talked to one of his friends who's still there. The word is if Cumulus takes over, he'll go sell cars (or maybe workplace uniforms, in which case he could come back as GM.) At least Cumulus can't force the Citadel employees to sign non-competes. They've been struck down in NY state. That's the least of the employees worries, given Cumulus' reputation: A rotten company run by rotten people. At least the front line men and women at Citadel have some experience in that department.

 

[TheBigA]

Re: What if Entercom had gotten Ciadel?

Twenty five years? And you believe it when Lew & Company say they're in it for the long haul?

No, I look at how they work, and they don't sell things. They buy and hold. That's been their pattern as long as they've been in business. Buy and hold.

In Buffalo, Kiss air Seacrest middays and Star airs Kim Iverson at night.

Compared to some companies, that's nothing.

 

[fybush]

Re: What if Entercom had gotten Ciadel?

Twenty five years? And you believe it when Lew & Company say they're in it for the long haul?

No, I look at how they work, and they don't sell things. They buy and hold. That's been their pattern as long as they've been in business. Buy and hold.

They unloaded WRTK in Rochester pretty quickly...but that was a long, long time ago now.

Let me take another stab at what could have played out with an Entercom/Citadel combo in Buffalo, just to assuage my embarrassment from earlier:

Assuming you get to keep the best 3 AMs and 4 FMs, the winners, as Jim said, would likely have been 550/930/1520 and WTSS, WKSE, WGRF and either WEDG or WHTT. But that's potentially more dominant a cluster than Justice might allow, and it leaves a pretty thin "rump" cluster to sell off - 1120, 1400, 107.7 and either WHTT or WEDG. Pretty weak tea, even if (as Pastrick suggests) you throw in 1520 with a talk non-compete...and presumably hefty rent payments for the transmitter site.

There's an interesting situation developing along these lines out west, where similar clusters are being combined in Washington State. Rival broadcasters in Yakima and the Tri-Cities are challenging an attempt by (and here's the Buffalo connection) Townsquare to assemble mega-clusters out of the very best properties from its own clusters and the clusters it's acquiring from New Northwest Broadcasters. So far, the FCC hasn't ruled on the petitions that have been filed to deny those transfers. What Townsquare is doing is even more aggressive...they plan to take successful formats from some of their existing weaker signals and move them to some of New Northwest's stronger signals, shedding both the weak signals and the weak formats to some other buyer. There's a lot more disparity among the signals out there - everything from little 6 kW class As to 100 kW class Cs. It's not like Buffalo, where all the significant FMs in town are Bs and all have fairly comparable signals.

 

[TheBigA]

Re: What if Entercom had gotten Ciadel?

They unloaded WRTK in Rochester pretty quickly...but that was a long, long time ago now.

That's true, and actually if I was advising the Dickeys today, there are quite a few similar stations in this portfolio they should dispose of the same way.

 

[SirRoxalot]

This is a Cumulus move to get into the big markets, and play with the big boys. The former ABC stations are their target.

I wouldn't be surprised if Cumudel ultimately spun off Buffalo, Syracuse, and Binghamton. There's no growth potential in any of those markets. Syracuse is a mess. Buffalo's solid. Binghamton's OK, but just another rust-belt small market. Why not take the cash, and invest in the sun belt where radio has better chance of growing, or at least maintaining audience numbers from a growing population?

There's no happy ending in sight. The beleaguered troops on James E. Casey Drive have endured Farid's Folly, and bankruptcy, only to (apparently) fall into the clutches of Big Brother. Cumulus is borrowing to buy in. You know that means "maximizing profits" once they take over by cutting an already anorexic corporate body.

 

[TheBigA]

I wouldn't be surprised if Cumudel ultimately spun off Buffalo, Syracuse, and Binghamton. There's no growth potential in any of those markets. Syracuse is a mess. Buffalo's solid. Binghamton's OK, but just another rust-belt small market. Why not take the cash, and invest in the sun belt where radio has better chance of growing, or at least maintaining audience numbers from a growing population?

On the surface I would agree with you. That's why they bought Susquehanna. If they could buy ABC without the rest of the package, I'm sure they would. The bad news about the ABC stations is most of them are dying AMs in small, inefficient clusters. In fact, my view is this overall group isn't much better off than it was a couple years ago. Citadel didn't really solve the long term problems. They still exist. Cumulus should have bought Bonneville.

All that being said, who would Cumulus sell those clusters to? Perhaps the spurned suitor, Entercom? If they were willing to buy all of it, are they still interested in parts of it? That brings us back to the top of this thread.

 

[Bob1370]

One suspects what Cumulus wanted is New York, Chicago, LA, SF and the other biggest markets which were once owned by the Mouse. Trouble is, will the Dickeys do any more to invest in those properties (and the other Citadel clusters they get across the country) and grow them, than Citadel did? Their track record isn't good, all the way back to when Lew Dickey Sr. dipped his toes into the Rochester market 30 years ago, made a big splash by buying WSAY from Gordon Brown's estate and announcing it would take WHAM head-on, then quickly decided to scale back their investment. That property is now the market's NPR affiliate under local noncommercial ownership.

I'm not predicting they'll buy Citadel, blow up the balloon only to deflate it, and then sell WABC to WNYC (although that might arguably benefit New York listeners)...but you have to wonder what kind of owner/operators they'll be, and whether the top-shelf talent Citadel has in place in a lot of markets should start polishing their resumes and airchecks and thinking about their next move.

 

[Element9]

Because I was admonished by an RI member who PM'd me, taking exception to my earlier description of Cumulus, let me walk that back and offer that Citadel and Cumulus are two of the finest radio companies in America. Each respects, values and appreciates the work and contributions of its employees and seeks to provide long term employment for those who contribute to the success of the companies. Yes sir and ma'am, Citadel and Cumulus, the radio version of Wegman's.

Excelsior!

SirRoxalot has pointed the discussion in the direction most likely to be taken by Cumulus IF it reaches an agreement to buy or merge with Citadel. The former ABC major market stations and the ABC radio network are the brass ring for Cumulus. Cumulus will need cash to operate the major market stations, therefore it's very likely some of their medium market (Buffalo, Syracuse and Binghamton) properties will be packaged for re-sale. The next question is, who wants 'em and how much is any company willing to pay for 'em. It could be a long time before a prospective buyer steps up to buy any of those medium markets clusters. And a multiple of eight times cash flow will be a stretch. As Roxalot suggests, Cumulus, given its track record, is likely to operate the medium market clusters at even greater "efficiencies," resulting in another round of... as Bob1370 suggests, it may be time for Citadel staffers to take precautions. Not good times. I suggest.

 

[SirRoxalot]

There's a simple question here. What makes the Cumulus deal any different than the original Citadel deal where a smaller company leveraged itself up the Ashtabula to gain access to markets owned by a bigger company?

Citadel went bankrupt after taking on $2.4-Billion in debt to buy ABC. They're offering $2.4-Billion based on $500-million in equity from Crestview Partners and Macquarie Capital, and a bunch of stock currently worth less than $5 a share that Cumulus will guaranty purchase from shareholders at between $7 and $14 a share. Where's the REAL money coming from? And what's the interest rate going to be?

Does anybody seriously see the value of radio station increasing over the next 10 years? Or see the revenue from those stations getting back to 2006 levels in the next 5 years? Lew Dickey's Cumulus Media (the public company) has been on the verge of bankruptcy for a couple of years, so how much of an asset is that? Cumulus Media Partners (the private company) is trying to buy out the private equity guys who fronted the money to buy the old Susquehana group. How much of value is left there?

Seems all smoke and mirrors to me. Farid must be having a fit that somebody figured out how to beat him at his own game. Unfortunately, amidst all the gamesmanship, real people are going to lose real jobs.

 

[TheBigA]

Seems all smoke and mirrors to me. Farid must be having a fit that somebody figured out how to beat him at his own game. Unfortunately, amidst all the gamesmanship, real people are going to lose real jobs.

A long time ago, a very wise person said: "In radio, it's not if you're going to get fired, it's when." Or was that Billy Martin?

There's a part if me that thinks this is all gamesmanship. Cumulus has the credit. Farid has to answer to bankers. So they're holding him over the fire like a pig with an orange in his mouth. Whether this all goes through is another story. Lots of stockholders have to approve. They all will get a chance to kick the tires for a while, and see if there are any deal breakers. If any of you have ever bought a house, there are several points where the Dickeys can walk away, just as Farid did with ABC years ago. All they need to do is find termites or foundation damage, and the whole thing could be off. In the meantime, the Dickeys get a chance to look at Farid's books. How much would you pay to look at the books of your competitor?