How Lew Dickey Will Buy Back Cumulus

Mary Berner says there’s no way Lew Dickey is returning to run Cumulus.

Jeff Warshaw is reportedly already talking spin-offs to buyers who think Connoisseur can steal Cumulus from lenders for pennies on the dollar.

And then there’s Lew Dickey, the founder and CEO ousted in a bloodless coup by the chairman of the board more than two years ago who wants back.

Which one is full of crap?

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  1. For the first time – the Dickey takeover plan.
  2. The timing of the takeover bid.
  3. The biggest thing Lew Dickey has going for him and what’s working against him.
  4. The clueless lenders and bondholders are in for this rude awakening that can totally disrupt the outcome.
  5. The best thinking on when Cumulus can get out of bankruptcy and back to business.
  6. Whether current management is making any progress winning over bondholders who are refusing to sign on to their second operating plan.

The answers start here.

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Entercom’s $110 Million in Merger Cutbacks

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Millions in Vanishing Revenue at Cumulus

INSIDE …

  • Putting aside all the spin, what’s the truth about Cumulus revenue – here’s the final first quarter numbers and current pacing. 
  • The one Cumulus top exec who is not spinning performance statistics so if this guy is worried, be worried. 
  • What’s the one tell-tale sign a radio company is headed into the toilet – guess what, it just showed up at Cumulus.
  • The absolutely wrong thing to do when the majority of your market managers are not able to turn things around – Cumulus did it a few days ago. 

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Connoisseur’s Play for Cumulus

We know that there are at least two bidders looking to takeover Cumulus when it emerges from bankruptcy – or even before if the judge allows outside bidders.

Lew Dickey is one, the founder of the company ousted by Board Chairman Jeff Marcus after Dickey had it out with Marcus over allegedly undermining his ability to run the company.

And now there is Jeff Warshaw, the CEO of Connoisseur Version 2.  Warshaw sold 37 stations in 9 markets to Cumulus for $242 million in 2000 as the original Connoisseur.

Mary Berner continues to spin that she is guaranteed to return to run the debt-free version of Cumulus when they emerge from bankruptcy and lenders and bondholders are stinging from the haircuts they had to take.

  • Warshaw is looking to steal Cumulus from lenders – Connoisseur is in a bit of a financial tight spot itself selling off its Buckley Hartford stations and most recently three stations in New Jersey to Townsquare for $17 million including one of Connoisseur’s most profitable ones, an FM in Trenton.  Approximately 50% of Connoisseur’s acquisitions account for debt of some kind.  That’s why Warshaw may not be just opting for a chance to buy Cumulus but may need it for Connoisseur to survive.
  • How stealing Cumulus buys Jeff Warshaw another day
  • How much of Cumulus would Warshaw keep
  • Who do the lenders want running Cumulus
  • What happens if Cumulus falls into a second bankruptcy
  • Will there be a bidding war for Cumulus 

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Urban One’s Financial Condition

Al Liggins and Cathy Hughes have managed to do the impossible over the years – avoid bankruptcy.

But what kind of shape is a boutique black-targeted media company like Urban One really in?

On one hand, they have seen a lot of competitors fall on hard times not the least of which is the number one group, iHeartMedia with their 850 stations.

And Cumulus with 90 markets, the majority of which are not and have not been making their numbers even before they filed for bankruptcy.

Yet, Urban One is still afloat albeit in uncertain times.

Their employees very much care about whether they can remain whole and avoid the uncertainties of bankruptcy.

Of course, their banks and lenders care.

But so do other radio groups who might covet the major markets they are in if they have to sell properties to stay afloat.

So, what’s Urban One’s financial condition?  

  • They diversified and placed a bet on help from non-radio businesses – As of now, Urban One (formerly Radio One) is reportedly deriving approximately half of its income from sources other than radio station revenue.  That is highly unusual among radio companies, but it was a strategy that Liggins and Hughes personally felt they had to pursue. 
  • What Urban One is doing to as a hedge against increasing debt that other groups may have to do, too

  • The TV One acquisition – accretive or too risky

  • The current biggest threat to Urban One’s future 
  • Can Urban One avoid bankruptcy in a year when 2 of the 3 biggest radio groups could not 

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