Cumulus Media just reported their quarterly earnings – this year is a little less chaotic than a few recent years – advertising by the Census and BP have made things better than they might have been, and political spending is likely to kick in soon.
Cumulus is a good barometer for radio – they didn’t own any TV stations, they don’t run a syndication operation like Clear Channel or Citadel. They just run mom-n-pop small market radio stations (Cumulus Media Partners does own major market stations, but it is a separate company)
Cumulus reported net revenue (revenue minus broker fees, etc…) of $69.7 million for the quarter. Cumulus owns about 80 AM stations and 220 FM stations. That works out to revenue (before expenses) of about $77,000 per month per station, or about $1,400 per station per day… or probably about $100 per hour in revenue during the period when people are listening.
Expenses to actually run the station (Employee costs, power, rent, licensing fees, equipment, etc…) was about $40 million or a little over half of the revenue – leaving 41% of revenue as income before the interest bill and taxes and non-cash write offs and paying dividends to the the stockholders (haha!) and to spend on capital projects.
Cumulus owes about $615 million to its banks. The value of everything Cumulus owns is only about $320 million (and you think your mortgage is upside down!). The actual physical property is worth about $44 million (about $150,000 per station).
The interest expense was $7.3 million for the quarter… which is an average rate of a little below 4%… They used most of the money being generated by operations to try to pay down some of this debt.
Somewhat related, Cumulus has announced that Bank of America is no longer going to manage their credit facility – it has moved to GE Capital (We bring Green things to life) – part of what this deal is going to do is to allow Cumulus to finish the acquisition of Cumulus Media Partners. It’s likely this change is related to the financial reform bill which is pushing “banks” out of risky investments.
