The United States has 14,599 licensed AM and FM radio stations as of today. Much has been made by people on the left about the negative effects of the radio consolidation that happened about 10 years ago, culminating in Clear Channel owning about 1,200 radio stations.
Cumulus radio made it very public today that they want to take over Citadel Broadcasting. Cumulus is the #2 largest radio broadcaster (about 300 stations) – Citadel is #3 (235 stations). Cumulus had tried to “go private” just as the radio consolidation movement fell apart – their financial backers funded the takeover of Susquehanna (CMP), which owns about 35 radio stations in major markets. CMP is owned seperately, but Cumulus operates the stations for a managment fee. Cumulus itself is headquartered in Atlanta and most of its stations (other than the CMP ones) are in small markets.
Citadel is the combination of the former Disney/ABC radio stations (mainly heritage 50 kw AM stations) and a collection of small market stations that were bought up during the consolidation rush after national ownership caps were removed by Bill Clinton in 1996.
Profiles of the 3 entities (financial data is out of date)
Citadel
Cumulus
Susquehanna (Cumulus Media Partners)
Citadel just completed a fast trip through Chapter 11 bankruptcy and a few weeks closed on refinancing its post-bankruptcy debt at much more favorable rates.
Citadel Media is the syndicator for Mark Levin, Don Imus, Larry Kudlow, Bob Brinker, Doug McIntyre, John Batchelor and does a lot of music syndication. Cumulus doesn’t do any syndication that I’m aware of – they just run a large number of marginally profitable radio stations in smaller markets with a tight control over expenses.
With all this talk of “Localism” at the FCC and that media consolidation was a bad idea – what are the chances that the FCC and/or antitrust division of the Department of Justice would sign off on this deal? Perhaps Cumulus could “donate” some of its stations to “minority” owners to get the deal done.
The FCC still has ownership limits in place in individual markets – the number of stations that can be owned in a market depends on the size of the market and the number of existing stations. A combined company would probably have to divest some of the stations where both Cumulus and Citadel operate in the same city.
Stay tuned.
