No Place In Radio For Syrupy Sentimentality

People don't understand what it takes to preserve shareholder value. We have to allocate our capital and human resources in the most efficient manner possible. Put another way, in times of falling revenue, we regrettably must lop some heads off. So it was with a bit of dismay, and a smidge of contempt, that I read this letter to the editor to The York (Pennsylvania) Daily Record.

Cumulus clouds radio sunshine
04/07/2010

My daughter and I were so disturbed to read in your paper that WSOX fired Mad Dog. Nothing against Dave, we adore him, but we believe that it was a terrible decision to remove Mad Dog from the morning program. We are fans through listening, but we have also participated in some of the fundraising events that Dave and Dog have been a part of, and it is a sad day in the community when such a warm and generous spirit loses an outlet to share that generosity.

I guess one could say Cumulus has, ironically, made it a cloudy day in York. We are asking for a boycott of the station, and have been fairly successful so far in getting folks to change the station. Hopefully a lesson will be learned. You want us to listen to you, we want you to listen to us.

RUTH GEESEY
WINDSOR TOWNSHIP

http://www.ydr.com/opinion/ci_14836711

Waaaa!!! You took my morning show!!You just don't get it, Ruth, and at the same time, I'm so smart it's like having an large hard drive in my head. But then, that's why you're slumming it in York and I'm living large in Atlanta.

Radio Business Report Gets It Right

At least a few people understand my genius. Here's what Radio Business Report has to say:

"It’s (my partnership with Crestview Partners) sort of like J.P. Morgan himself walking into the NYSE back on Monday, following Black Thursday in 1929 in the great stock market crash, and announcing to a very scared market that his company was going to buy."

 http://www.rbr.com/radio/23199.html

We haven't raised a dime of capital or committed to buying a single station. Look what I can accomplish with a single press release! 

Clueless

In his as usual clueless blog, InsideHisAssMusicMedia, Jerry Del Colliano wrote:

"These Wall Street deals always pay off for the principles even if they stiff their shareholders because the partners make -- fees."

Horrors! Fees! Well, of course there are fees. Fees are the lifeblood of consolidation. Have you looked at our financials lately? It's not as if we can make it on profits. Sheesh.

Onward!

It’s an amazing new day here at Cumulus. While the naysayers continue their small-minded little campaign against me and my company (you hear me Del Colliano?) we’re moving forward.

Despite our current difficulties in operating the stations we already own, we have decided to buy more. I know this is counterintuitive, but stay with me.

As the nation’s world’s preeminent radio consolidator, Cumulus must continue to consolidate to maintain our lead over the other consolidators. In a world where to stay afloat means you must be “Too big to fail”, I realized that we simply aren’t big enough.

So grow bigger we will! Crestview Partners, a $4 billion private equity firm with a strong media focus, and Cumulus Media, Inc, have formed a strategic investment partnership that will seek to invest in premium radio broadcasting companies that present attractive opportunities for significant long-term capital appreciation. And if that little bit of financial pablum doesn't make your heart race, check this out: The partnership's objective is to deliver significant value and achieve attractive returns through Cumulus' proven skills in radio station management and operations, as well as its proprietary technology platform.

Why, you might ask, are we taking this risk in the current economic environment? Assuming I accept the dubious premise that this is risky for me personally, let me say this. First, because we can. Second, by growing, we can distract people from our current performance. Third, as unbelievable as it may be, there are still hundreds if not thousands of radio stations that are not fully automated, that have needless appendages like receptionists, program directors dedicated to individual stations, large sales staffs…. some stations even still have their own vans! These obviously represent a lot of untapped efficiencies we can take advantage of by rightsizing.

There are also many radio stations to be had at very attractive multiples and, thanks to Crestview, we’ll have plenty of dry powder to take them down, and marry them to our current operations. With this newly available capital, when it’s time for the wedding, we won’t be left standing at the altar. Because if anyone is going to leave someone standing at the altar, it will be me.