Cumulus Media is on the brink of a total collapse
Cumulus Media is on the brink of a total collapse
By Claire Atkinson June 11, 2017 | 5:07am | Updated
Cumulus Media converts weekly print magazine to digital
daily
As turnarounds go, this one is a disaster.
At radio giant Cumulus Media, things have gone from bad
to worse. A quick look at the stock price tells the tale.
When former Chief Executive Lew Dickey exited in
September 2015, the stock was already an anemic $5.45. On Friday, Cumulus
shares closed at 52 cents.
Back in the halcyon days of early 2014, Cumulus stock was
trading at $64.04. Now things are in tatters, and a Nasdaq delisting looms — as
does a possible bankruptcy.
Meanwhile, current CEO Mary Berner keeps receiving bonus
payments, which are now being paid on a quarterly basis instead of the typical
end-of-year cycle, perhaps learned from her two bankruptcies with Reader’s
Digest.
“Cumulus continues to make tremendous progress in our
multi-year turnaround, having reached a financial inflection point driven by
ratings share growth, stabilization of the operations, and sustained
outperformance against peers despite a tough market environment,” the company
told On The Money.
Cumulus owns hundreds of radio stations and syndication
company Westwood One, and competes with the likes of iHeart and CBS Radio, now
in the hands of Entercom.
Now private equity firm Crestview Partners has adopted a
poison pill to stop an activist from coming in as it staves off bankruptcy. For
the year 2016 (a presidential election year), Cumulus reported that net revenue
fell 2.3 percent while adjusted Ebitda — earnings before interest, tax,
depreciation and amortization — was off 20.6 percent from a year earlier.
Radio-business watchers are intrigued to hear that former
CEO Dickey has raised a $209 million investment fund. Dickey came off the
Cumulus board in March.
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