The Next Cumulus Markets to be Sold

Not one of my current NYU students knows what WPLJ is.

It is true that they come from a generation that has never been without Napster, music piracy, iTunes, iPods and, of course, streaming.

So, they have no horse in the race that an iconic and technically superior radio signal is being sold off to Educational Media Foundation (EMF) to turn into a religious station.

I still can’t believe Mary Berner went there.

Selling WPLJ, all but eviscerating DC, trading stations with Entercom to cut costs.

Sure doesn’t sound like someone who wants to remain in the radio business.

And now, it appears the Cumulus auction is not finished and other markets may soon become available for purchase.

  • Which 2 markets are thought to be next?
  • Is EMF in the equation or are there other value buyers stepping forward?
  • What is the time frame for the next round of Cumulus station sales?
  • Why one of these markets will be a tough call because it is a cash cow that helps revenue but can get them a big payday – weighing the factors.
  • Are they done selling super signals like WPLJ – in other words, was PLJ a one-off?

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Westwood One Bombshell

Since Cumulus, owner of syndicator/network Westwood One went into bankruptcy rumors have surfaced that Westwood One is for sale.

It appears any attempt to sell Westwood One fell short of a decent offer so the company plunders on with an asset some believe they would rather monetize for their lenders by selling.

And yet it appears something major is up with Westwood One.

If not a sale – say to Entercom which would just about kill their stock price if they even tried – then what? 

  • The most likely solution that would leave affiliate stations in a quandary. 
  • A sale – not to the likely buyer Entercom, but to this company that is not on anyone’s radar.
  • Why keeping Westwood One is becoming untenable for Cumulus.
  • Where podcasting fits into the Cumulus Westwood One strategy. 
  • Why a frontal attack by this interested party could terminally drive what’s left of Westwood One’s value down. 

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Entercom’s Real Revenue Revealed

Now we know why David Field is letting analysts carry Entercom’s water on adjusted EBITDA and “assumed” synergies.

The real adjusted numbers belie reality which suggests that Entercom has already begun what could be a long spiral down.

Digging in to the reported numbers, actual performance of Entercom/CBS Radio is headed the wrong way and it suggests that lots of changes are coming or else this merger experiment is as good as over.

The market has been suspicious of the merger from almost day one as the reasons are becoming more apparent.

  • How the massive Entercom salary and expense cutbacks are factoring in to overall revenue using real numbers they reported.
  • Projection of real revenue for 2019 compared to the past few years.
  • How analysts fears about Entercom have come true.
  • The most pressing problem that Entercom must address quickly.
  • Will current levels of station operating expenses be retained or will there be reductions?

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Cumulus Financials Unpacked

Mary Berner is just like the other radio CEOs when it comes to putting lipstick on a pig.

She just does it with more enthusiasm.

The happy talk radio trade press picks up on this combination of carefully selected information and brute optimism without challenge to give Cumulus a pass.

These free passes are based on no specifics, details or quantifiable metrics that a sophisticated public media investor would ever wrap their arms around.

Things are worse there than Berner is letting on.

Revenue problems, EBITDA problems, digital future problems and the evidence is all there for those who know where to look deeper into their Q4 pre-release and investor deck filed in the 8-K.

It turns out to be a lot of half-truths and taking liberty with the numbers.

Here are the real Cumulus numbers unpacked.

  • The real Cumulus revenue figure and how they compare to the adjusted ones Mary Berner is selling.
  • What’s being thrown in to prop Cumulus performance up.
  • It’s right there in the numbers – the specific group of employees who will be taking the brunt of coming expense cuts.
  • What’s the impact of Berner’s podcasting initiative?
  • The expected effects of the sale of WPLJ and watering down major markets on revenue.

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David Field’s Reboot of Entercom

Have you noticed recently that David Field has muzzled his criticism of CBS Radio and its employees who he acquired through the merger?

Where he seemingly and publicly blamed them for almost everything that went wrong on the assimilation of the two companies, he has now fallen silent.

It’s not an accident.

Entercom is in big trouble missing investors’ expectations, failing to perform up to company estimations and all of this as radio continues to battle declining ad revenue and searching for a solution to the digital puzzle.

It’s not your father’s Entercom anymore.

Or maybe it is – more like founder Joe Field’s company than the grandiose dream of his son, David.

In any case, Field has decided to shake it up and the Entercom that we will see is nothing like the bumbling company that screwed the CBS merger.

  • Will Field give up more control and rely on others to help turn around Entercom?
  • Where’s Weezie – does she keep doing “Where’s Waldo” or does she reemerge and if so, how does she help the reboot?
  • The all-news franchise is in trouble and it was one-third of CBS’s revenue, who comes in to straighten that out?
  • The SAG-AFTRA pissing match – the new David Field.
  • What new initiatives are coming to pick up lagging revenue?
  • The list of what gets rebooted – and what does not.

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