{"id":7330,"date":"2013-05-14T23:32:43","date_gmt":"2013-05-15T03:32:43","guid":{"rendered":"http:\/\/streamingradioguide.com\/startingover\/?p=7330"},"modified":"2013-05-14T23:32:43","modified_gmt":"2013-05-15T03:32:43","slug":"american-spectator-cumulus-committing-suicide","status":"publish","type":"post","link":"https:\/\/streamingradioguide.com\/startingover\/?p=7330","title":{"rendered":"American Spectator: Cumulus committing suicide?"},"content":{"rendered":"

http:\/\/spectator.org\/archives\/2013\/05\/14\/cumulus-media-suicide-of-a-com<\/a><\/p>\n

HPaws passed along this link – the author is trying to figure out Lew Dickey’s motives in sparring with Rush Limbaugh in public. Borrowing from a quote attributed to Napoleon Boneparte “Never ascribe to malice that which is more adequately explained by incompetence” <\/p>\n

Cumulus Radio is the worst of both worlds – it combined Citadel, a company owned by a private equity firm consisting of a large number of small and unrated market stations being run by a man who wanted to run high profile major market stations – combined with Cumulus that contained a number of mid and small market stations run by the Dickey Brothers from Atalanta who have never run a major market station. <\/p>\n

Added on the side was the Susquehanna Radio company which was founded by a family that makes high quality china and just sort of accidentally got in the radio business. The “third generation” had no interest in Grandpa’s radio business and sold it to PE firms that had a vision of Cumulus they could “take public”, but it went nowhere. The deal was while they were packaging the deal, Lew Dickey would throw in a couple of his and run Susquehanna for a management fee and part ownership.<\/p>\n

Very quickly, Cumulus Media Partners became insolvent, the lenders took over the company and Dickey’s Cumulus wrote off its entire investment in CMP.<\/p>\n

So when Citadel went through bankruptcy after acquiring ABC Radio, the post bankruptcy creditors were upset the Citadel CEO not only didn’t leave, but gave himself a big bonus for using bankruptcy to stick it to the lenders <\/p>\n

Cumulus and Citadel had almost no overlap in their small markets – cities tended to be one or the other – this made merging fairly easy. So the money lenders (who know nothing about radio) encourage Cumulus to take over Citadel. The deal was justified on Lew Dickey’s promise he could cut costs – a lot.<\/p>\n

What this misses is you can’t cut costs and not lose audience – which you’ll never get back once they take you off their car radio presets.<\/p>\n

If it wasn’t for the debt, radio is a cash cow. With a high net margin product with a finite number of ads to sell, the last thing you should do is cut costs that cost you revenue.<\/p>\n

Blaming Rush is a convenient excuse, but not the reason Cumulus is seeing shrinking profits, despite spending almost nothing on maintaining and improving the radio stations they control <\/p>\n","protected":false},"excerpt":{"rendered":"

http:\/\/spectator.org\/archives\/2013\/05\/14\/cumulus-media-suicide-of-a-com HPaws passed along this link – the author is trying to figure out Lew Dickey’s motives in sparring with Rush Limbaugh in public. Borrowing from a quote attributed to Napoleon Boneparte “Never ascribe to malice that which is more … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18,98],"tags":[],"class_list":["post-7330","post","type-post","status-publish","format-standard","hentry","category-radio-biz","category-talk-radio"],"_links":{"self":[{"href":"https:\/\/streamingradioguide.com\/startingover\/index.php?rest_route=\/wp\/v2\/posts\/7330","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/streamingradioguide.com\/startingover\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/streamingradioguide.com\/startingover\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/streamingradioguide.com\/startingover\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/streamingradioguide.com\/startingover\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7330"}],"version-history":[{"count":3,"href":"https:\/\/streamingradioguide.com\/startingover\/index.php?rest_route=\/wp\/v2\/posts\/7330\/revisions"}],"predecessor-version":[{"id":7333,"href":"https:\/\/streamingradioguide.com\/startingover\/index.php?rest_route=\/wp\/v2\/posts\/7330\/revisions\/7333"}],"wp:attachment":[{"href":"https:\/\/streamingradioguide.com\/startingover\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/streamingradioguide.com\/startingover\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/streamingradioguide.com\/startingover\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}