Thursday will be the first official earnings call by new Cumulus CEO Mary Berner. While she has no responsibility for those numbers, it is publicly laying out the playing field.
The listeners on that call will be people with a clear understanding of the radio business, unlike Mary Berner. The big elephant in the room – are you a caretaker just to be on the paperwork while the company declares Chapter 11, or “restructuring” or do you actually intend to learn the radio business and run this company?
What would bankruptcy mean? The most obvious thing (based on the Citadel bankruptcy) is it would release Cumulus from its long term programming contracts (mostly inside Westwood One) and reopen negotiations – Mike Savage, Mark Levin, NCAA Sports, Jim Bohannon, Johnny B, Redeye Radio, Blair Garner – and especially Rush Limbaugh. While Rush is not employed by Cumulus, he does have a contract with them that came close to not being renewed a year ago. If Cumulus is behind on payments to SoundExchange, Nielsen, or ASCAP, those will not be fully paid.
Cumulus is not in such dire shape that it would be forced into involuntary bankruptcy where everything is up for grabs, but more likely a prepackaged bankruptcy where the major creditors agree ahead of time on the plan, and the bankruptcy judge is mostly a rubber stamp as long as the plan reasonably protects the majority of creditors involved. The disposition of the pending $200 million in land sales from WMAL and KABC are very much in play. The future of Westwood One is also, along with their satellite distribution business.
Cumulus Media has long term debt of about $2.4 billion, which pales compared to the $20 billion that iHeart Media owes, but I doubt Mary Berner has the same type of long term vision as Bob Pittman and his ability to create income from long term branding deals. Where are the Westwood One tailgate parties at football games? She strikes me as the type of CEO who will be distracted by sexism and other things she needs to fix. Maybe Taylor Swift would like her own radio network.