The Real Cumulus Citadel Merger

The real merger of Cumulus with Citadel isn’t consolidation like radio used to see in the late 90’s.  It’s about a methodical takeover of the radio industry by banking interests who reward losers and punish winners.

This article reveals …

•  A slight opening in the exclusive negotiating window Cumulus is paying Citadel for – it could allow a white knight to save Citadel from Cumulus or it could be a bust.  Here’s how it works.

•  Who could give Cumulus a run for their money at this point.

•  Why the banks are hell bent to create yet another heavily debt ridden radio group.  It defies logic until you read this.

•  The Cumulus end game.  Lew Dickey is out shopping for loans to complete the deal, but here is his plan.

•  What will the merged Cumulus and Citadel look like?  More layoffs?  Lots or a few?  What will happen to Citadel programming?  Management changes.  The corporate setup.   This describes the net result of the Cumulus-Citadel merger.

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Ex-GM Kicking Cumulus in Court

Lew Dickey may be snapping his suspenders and enjoying making Citadel CEO Farid Suleman and his 14,000 employees squirm as he attempts a hostile takeover.

But in a little Connecticut courthouse, an ex-Cumulus employee who the Dickeys sued when she left them for Cox is prevailing in court so much so that she may be able to get Lew to say “uncle”.

You know that these kinds of stories are not reported in the radio trade press, which is happy to skirt controversy to stay in Dickey’s good graces.  But Cumulus is attempting to be the big dog among radio consolidators with a record of employee dissatisfaction and a punitive management style.

This article will reveal the draconian tactics being used by Cumulus and how one employee appears to be overcoming them:

1.  What a judge did with a Cumulus attempt to hogtie the income and personal possessions of former market manager Kristin Okesson.

2.  How low would Cumulus go to put a stranglehold on an employee’s life after she left their company?  I’ve got two scary examples for you.

3.  How much does this judge think Cumulus can win – if they win -- and the case goes to trial?  Let’s play high low.  Cumulus wants over $1 million from their ex-employee.  She wants to pay zero.  You guess what the judge said was Cumulus’ best-case scenario (yes, it’s higher than zero).

4.  Inside info on the shrewd countersuit that Dickey’s ex-employee filed against Cumulus – a suit so dangerous that one way or the other I think it forces Cumulus to settle the original case.

5.  Can you imagine Lew Dickey being deposed in this case?  Imagine it.  Here’s how Dickey cannot avoid a deposition.

6.  Cumulus has no women in senior management positions, most people know that.  But the very company that is hot in pursuit of Citadel has how many women as market managers?  Whatever your guess, keep in mind that it is three fewer than when Okesson was employed there. 

7.  What will happen in the end?  It’s harder to predict whether Cumulus will be successful in its takeover attempt of rival Citadel than it is to see how this secret and vindictive lawsuit will end.  I’ll tell you my prediction right here.

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Stupid Music and Media Mistakes

Radio and the record industry along with their brethren in TV and print continue to make major strategic mistakes that are so contrary to today’s evolving consumer behavior that they are self-destructive.

Are you making these mistakes or are you smart enough to avoid them?

This article reveals the faulty strategic thinking of radio, music industry and TV networks that are tantamount to shooting yourself in the foot:

1.  What’s the fatal flaw in Sony’s just launched Music Unlimited music service that is aimed at where heavy radio listeners live.  This one – from a company that used to do everything right – explains why Apple is the new Sony.  It’s all you need to know.

2.  Getting upset about the new gatekeepers like Apple, Google and Internet ISPs charging access for their toll road is an emotional argument that even the U.S. Department of Justice is getting into, but what is the one mistake industry executives are making when they get lost in the debate on paying Apple for access to their mobile devices.  This one is important.

3.  Why Rupert Murdoch’s The Daily made-for-iPad app is The Dud.  Three things that the powerful News Corp forgot to do when they designed their groundbreaking newspaper app that they want $50 a year for.

4.  Why do traditional content providers still think they are in charge of your viewer?  Here’s a sorry example of NBC’s attempt to present Hockey Day last Sunday without showing one game all the way through – plus other anti-fan and consumer missteps you’ll want to avoid.

5.  Why do radio and TV stations continue to drive their terrestrial audiences to their websites?  I know, it’s to boost website traffic, but it doesn’t work and in fact, it hurts them in this one very significant way.

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Music Industry Terrorists

The radio industry got dissed again on the recent Grammy show by none other than most of the artists and their Academy leader Neil Portnow.

That’s funny because the telecast memorialized the decline of the record industry the moment Arcade Fire, an indie group, won best album.

The radio industry could put a stop to music industry terrorism and I’ve got a plan for your consideration.  After all, consumers are voting with social networking in Egypt and in a less important way in the music business.

One thing is for sure – the labels won’t be around for the music industry I see in my crystal ball.

Meanwhile, this article reveals the music industry’s tough new strategy to stick it to terrestrial radio and my blueprint to return the favor to them.

This article reveals the labels' new strategy against radio …

1.  To use radio’s own trade association NAB against the industry with the lobby group’s cooperation.  This is the new twist on Gordon Smith’s failed attempt to go to the labels hat in hand and beg them to allow radio to start paying more music royalties.   And why Smith had to change his focus to coincide with the labels new plan.

2.  What the labels are threatening to do to radio stations that they believe can impact what makes it on the air.

3.  The final grenade – the music industry’s desperate threat to bring radio to its knees on a performance royalty.

Then, my blueprint to shut the labels down – Steve Jobs-style ...

1.  How radio can get the labels attention in a big way and turn the fear on them.  I’ll share the details.

2.  The ultimate strategic move that actually cuts off Congressional sympathy for inaugurating a music performance royalty for radio.  Why has no one thought of this idea?

3.  How to twist the music industry’s arm around its back in a move that will make them say “uncle” – at least when they see their profits decline further.

4.  How radio can easily take a page from Steve Jobs’ playbook because radio may be on the decline but the music industry cannot live without free exposure over the radio.  How do you like this move?

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The Entercom/Citadel Merger

Everyone seems resigned to the fact that Cumulus is going to succeed in its hostile takeover of Citadel. 

Everyone but Citadel CEO Farid “Fagreed” Suleman and me!  How’s that for strange bedfellows?

I think Entercom still has a chance and even if Citadel accepts the Cumulus offer while I am writing this piece, I still think Entercom (or some other group) is the horse to watch.  

The Cumulus/Citadel merger stinks. 

It has no merit other than to earn fat fees for investment bankers and high interest rates on the debt that will follow.  And let me be clear – it will be destructive to every other radio group except Clear Channel (I’ll explain).

Here’s what this article reveals ...

1.  Could Entercom still buy Citadel even after coming up short last week?  I’ve got some compelling evidence for you to consider.

2.  Why would Entercom want Citadel now?  There are two reasons that I think you will appreciate as I lay out the scenario I see happening.

3.  What is a fair price for Citadel?  Notice you haven’t seen one solid number on how much radio stations are worth.  Just a pig in a poke number.  Here’s why.  There is a new pricing system that is apparently being used to determine the value of the Citadel stations and if I told you it isn’t station comps and it isn’t the recent Bonneville station sales, would you believe what the parties are using as a way of pricing the deal?

4.  The adverse affects if Cumulus is the one that merges with Citadel. 

5.  What happens to current Citadel employees who survived one dictator and now this?

6.  The major changes ahead for Citadel markets where Harvard case study mentality is likely to replace what is still good about some Citadel stations.  I’ll explain.

7.  What happens if Cumulus gets Citadel, will there be more radio mergers even without real station values to price the acquisitions? 

8.  How some good radio companies can have bad things happen to them if Dickey and his Wall Street cronies pull off this improbable hostile takeover.

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