The name sounded familiar..
Following the deregulation of radio in 1996 during the Bill & Hillary Clinton administration, there was a “land rush” of people running around buying up radio stations as fast as they could. One of the people doing that was Larry Wilson out in the Pacific Northwest. He was running around buying up around 200 tiny stations in tiny markets at inflated prices.
Ted Forstmann arrived on the scene in 2001 (just as the radio bubble started bursting) and made Larry Wilson an offer that was hard to refuse – $2 billion to buy the company if Mr Wilson would turn over the keys and retire. [Citadel History]. Mr Forstmann brought in Farid Suleman, who had been the “bean counter” at Infinity Radio when it was run by Mel Karmazin. Farid wanted to run radio stations in New York and L.A. not farm news stations in Iowa.
So when Disney wanted out of the radio business in 2005 and put ABC radio up for sale, Forstmann jumped at the chance to buy ABC Radio for about $2.5 billion in borrowed money. In short order, Citadel was teetering in bankruptcy after writing off close to $3 billion in the decrease in the value of their licenses over the paid Citadel paid for them – and in 2009 Citadel went bankrupt.
Citadel was recently acquired by Cumulus Radio.
Mr Forstmann was a guest on Charlie Rose’s TV show several times giving his expert opinion on the U.S. Economy. It’s interesting to watch to see how right (or wrong) he was.