They’ve dotted all the T’s and Crossed all the I’s. Barring a DoJ antitrust problem, Cumulus will be acquiring Citadel for $2.5 billion in cash and Cumulus Stock.
There are 4 distinct pieces to the proposed Cumulus / Citadel radio empire:
Cumulus Radio – the Atlanta based Dickey radio empire – entirely small and medium market stations where cash flow is kept positive by controlling costs and really aggressive local sales revenue
Cumulus Media Partners – the former Susquehanna Radio company – based in Eastern Pennsylvania consisting of a substantial group of very expensive Major Market stations – the private equity firms that bought this for Mr Dickey long ago wrote off their overpriced purchase
Citadel Radio – a company put together by Larry Wilson out in Portland – with Private Equity backing, he scarfed up a large number of small and medium market stations in the post-1996 consolidation. Interestingly, in almost no markets do Citadel and Cumulus both own stations. Typically, one or the other “owns” all of the stations in those markets
ABC Radio – Formerly owned by Disney – a large group of mostly AM 50kw heritage stations in major markets that ABC built when the national limit was 20 stations – WABC, KABC, WLS, WJR, KGO, KSFO, WBAP, WMAL, WPLJ-FM and several other major market stations)
There will be relatively few issues where the company will have to worry about market ownership caps. I remember doing an analysis of this, and my memory off the top of my head is there were only two markets with an overlap – one may have been Hershey Pennsylvania – more to come.
