What will Cumulus do with Citadel Media?

[carolinaradio]

Assuming the planned merger of Citadel and Cumulus goes through, any ideas on what Cumulus will do with Citadel Media, the syndication/satellite arm of Citadel? I know Cumulus has said something about making good use of it.

I was wondering this: since Cumulus owns a lot of small market or unranked stations, I wonder if they would use the 24-hour formats on a lot of these? I mean, a lot of them are already canned and rely heavily on syndication or automation...could they use it kinda like Clear Channel uses Premium Choice on some of their smaller market stations most of the time?

Could the 24-hour formats air in certain dayparts like nights/late nights on some of their larger market stations? I wonder if they plan on developing a mobile service to compete with iHeartRadio to include the 24-hour formats and the Cumulus/Citadel stations?

 

[SirRoxalot]

Tom Taylor addressed this the other day.

http://www.radio-info.com/newsletter/html/tri-08172011.html?lightbox=true?iframe=true&width=850&height=600

Cumulus says that they've found "$51.9 million of identified synergies". That's about $51.9 million in payroll that they intend to cut. That's about 860 jobs that pay $45K + bennies. And how many of their small market guys are making $45K?

This ain't gonna be pretty. Citadel Media will get plugged into dayparts that are now live on many Citadel stations. Most stations will be lucky to hang onto live drive-time shifts. Forget about live mid-days or evenings in most markets.

As Tom Taylor says, the "underperforming Citadel Network [syndicator Citadel Media] is expected to benefit greatly from a larger platform and Cumulus content assets." (There are already worries at the station level of more out-of-market programming pushed to local stations.)

I'm pretty sure that their competition is looking forward to meeting that "challenge".

 

[carolinaradio]

Cumulus forgot about live programming at night ages ago on their CHR and country stations. WW1 programming fills those times now. Same for a lot of the rockers, but they're mostly automated at night. A lot of Cumulus stations are already jockless mid-days.

People love to hate on CC, but like I've said, they're a Sunday School picnic compared to Cumulus, IMO.

 

[long-time-first-time]

This will be ugly. Newsrooms will be slashed to the bone. Cumulus does news/talk "on the cheap." If you're a live evening person on a Citadel station, you need to find another job....quickly.

 

[LibertyNT]

This could be very, very bad.
I wish this sale never happened.

 

[amfmxm]

C'mon. We all knew this was coming.

This is how an acquiring company creates instant cash flow--that is, cash flow that wasn't there before.

And as cruel as it is for those whose jobs are slashed, and as distasteful as it is for interested bystanders (most of us) to watch, this is how Cumulus has done it all along. It is how they weathered the Great Recession, Phase One--we're entering Phase Two right now--and came out smelling like the proverbial rose.

They gotta pay for Citadel somehow. This is how.

 

[SirRoxalot]

The reality is that Cumulus DIDN'T weather the Great Recession. There's so little equity owned by the Dickeys that the banks didn't have any need to foreclose. To their credit, they've convinced the big money guys that they can cut an operation running as tight as Citadel even more while increasing revenue.

This is strictly venture capital looking to park some money where they've been promised a return of 40 cents on each dollar of revenue. Since interest rates are so low right now, you either have to invest for the dividend, or find one of the few growth areas of the economy. Investing for the dividend certainly seems safer at the moment.

This is not good for listeners, for talent (either programming or sales), or for radio as an industry. The best we can hope for is that other groups will continue to invest in programming, kick a lot of Cumulus ass in the ratings, and hold sales rates up in spite of what Cumulus does when the numbers go down.

In the meantime, a lot of good, talented people are gonna get Dickeyed.

 

[carolinaradio]

Although I'm not an economist or investor, I don't consider Cumulus to be a healthy company. Their stock (while not the only one, certainly) is pretty low. Whenever they take these big market stations on, I have my doubts about their ability to run them. Look at what happened to Citadel when they took on ABC....this is going to be even worse. If the economy gets worse (which I think will happen)...yikes. Like I just said somewhere else, this doesn't seem like a good time to be taking on so much debt.

If there were a fight between Clear Channel and Cumulus, I'd root for CC in a heartbeat. They have a much more professional product, even if it's canned, and seem to put more effort in to local programming.

 

[amfmxm]

Rox, I don't doubt that what you've outlined above is accurate. Smoke & mirrors & BS seems to go a long way in some circles.

On the other hand, we have known for years that they are vultures. Although I have never worked for them, personally, I do have friends with years of horror stories from their unfortunate employment with Crumulus. Unbelievable stuff.

And I agree completely with your wishes for their future.

 

[TVradioguru]

The reality is that Cumulus DIDN'T weather the Great Recession. There's so little equity owned by the Dickeys that the banks didn't have any need to foreclose. To their credit, they've convinced the big money guys that they can cut an operation running as tight as Citadel even more while increasing revenue.

Isn't that what Clear Channel did? Do cash/stock/debt deals to grow the group with the promise of maximized infrastructure savings and incresed revenues? For the most part, weren't they successful at it? Answer, yes they were. Now you simply have another large player in the same game.

In the meantime, a lot of good, talented people are gonna get Dickeyed.

So if they're so good and talented, they should remain employed.

 

[bossbill]

In the meantime, a lot of good, talented people are gonna get Dickeyed.

So if they're so good and talented, they should remain employed.

These companies are running out of people to RIF. We were Citadel (ABC) affiliates when the Thanksgiving bloodbath hit Dallas 2-3 years ago. Suddenly all my "air staff" was gone. You have to be not only "good and talented", you must be willing to perform more duties, and if you've been around a while, you will be competing with someone younger who will accept less money.

 

[TheBigA]

Here's the reality: Anyone else could have made a bid for Citadel, including local businesses or "real broadcasters" looking to get back into radio. The only serious offer came from Cumulus. What we're seeing is a very small pool of companies interested in owning stations, often supported by the same group of investment companies. You can criticize what Cumulus did, but it served the puposes of Citadel's creditors. Anyone else who made a bid would have been a bottom feeder seeking a fire sale price. That wouldn't serve the creditors.

Back to the topic of this thread: Citadel Media (formerly ABC Radio Network) was once the most powerful part of ABC. For one thing, it had Paul Harvey. It had Sean Hannity. It had access to the assets of ABC News and ESPN. Lots of incredible content. Except Paul died, Sean left for CC, and Disney still owns ABC News and ESPN. So what's left is a rag-tag group of syndicated shows and the former Satellite Music Network in Dallas. Before bankruptcy, Citadel sought to replace the expensive network talent with people from their owned stations. That's a great idea, and I expect Cumulus will continue that. Local air talent love to be syndicated. They are willing to do it cheaply. Sure it puts their friends out of work, but it's kill or be killed in the competitive world of radio.

 

[SirRoxalot]

Citadel was looking to be bought? That's news to Farid. As I recall, he resisted offers from Cumuless until forced by one of his own stakeholders.

This sale is simply punishing Farid for trying to scam huge money as compensation for driving Citadel into bankruptcy. Instead, he gets marginally less huge money as a golden parachute, and the banks get the Dickeys running their properties. Apparently, they trust the Dickeys more than they trust Farid & Company. In return, the Dickeys get paychecks, and get to retain their tiny piece of the action instead of seeing Cumuless go into bankruptcy.

It's amazing how few companies control major chunks of the broadcast spectrum. Thank good the FTC and FCC are keeping track of all the cross-ownership, and protecting the interests of the American public [/sarcasm].

 

[TheBigA]

Citadel was looking to be bought? That's news to Farid. As I recall, he resisted offers from Cumuless until forced by one of his own stakeholders.

The creditors were in charge, not Farid. He discovered that when he turned down Cumulus.

You are correct that this is about the confidence investors have in the Dickeys. Confidence is what business is all about.

It's amazing how few companies control major chunks of the broadcast spectrum.

Oh come on. First of all, as I said, anyone else could have made a bid. No one made one that was credible. Second of all, the largest owner of spectrum space is the US Defense Department. And they're not selling. Third of all, broadcast spectrum is a small piece of today's media pie.

 

[TheBigA]

It's amazing how few companies control major chunks of the broadcast spectrum.

Let me add that I'm amazed how few companies control the entire cell phone business. Far fewer than companies that control broadcast spectrum. Consolidation in telecom has always been far more suspect than any consolidation in broadcast, and no one seems to care.

 

[SirRoxalot]

Just because it's so doesn't make it right.

 

[TheBigA]

Just because it's so doesn't make it right.

That's not the way the world works anymore. There is no justice and there is no "right." Just ask Obama. Everyone assumed that when the Dems got back in power they'd clamp down on big business. Guess what? They didn't.

 

[SirRoxalot]

Well, thank you for that enlightened world view.

TIO in 3... 2...

 

[carolinaradio]

Here's another question, about Cumulus:

Most of their medium-large market stations have somebody live in mornings and afternoons, with most having live people mid-days. However, very few of these markets have somebody live 7p-mid and a few of them just automate mid-days and only have morning and afternoon jocks (example: KCMO-F in Kansas City). Why not just voice-track middays instead of nothing? Why doesn't Cumulus utilize voice-tracking more if they can't have somebody live, at least in mid-days?

 

[TheBigA]

Why not just voice-track middays instead of nothing? Why doesn't Cumulus utilize voice-tracking more if they can't have somebody live, at least in mid-days?

Depends on the format, but I imagine they're aiming for office and business listening. The less talk the better during that time.