Despite the daily barrage about the strength of radio delivered from Cumulus-owned Westwood One and other research companies, Cumulus revealed a few details about how the radio industry, at least from its perspective, is hurting and why it needs this refinance.
The lawsuit against JP Morgan Chase says Cumulus, which employs 6,000 people, like many other radio companies has experienced declines in audiences as a result of new audio competitors, including satellite radio and online or streaming music apps, and in advertising dollars, due to both audience declines and substantial competition from digital advertising vehicles. Cumulus says it has recently implemented initiatives to drive ratings and reverse the company’s fortunes. The company cited giving operational control back to the local markets to better drive ratings and revenue. The company says those are starting to take effect.
Cumulus states in its lawsuit that the refinancing transaction will materially enhance its ability to implement a turnaround. If Cumulus cannot refinance the senior notes, it faces a January 2019 springing maturity on its $1.839 billion term loan. By avoiding the springing maturity, Cumulus says it will gain more time to improve its operational performance and benefit from its business initiatives that are already underway. With this additional time, Cumulus says it will gain the ability to use its ongoing positive free cash flow to reduce the amount outstanding under its term loan.
Wkqz in Saginaw mi sucks now. They fired Joe volk shame on cumulus media. Now the Saginaw market lacks good programing and content. Lost me as a listener and many others.
But they keep firing the only talent they have…
But the “culture” is much,much better!
I hear you Mel. Thanks. And you are the man.
I wouldn’t read too much into these pleadings, Ed. When a petitioner tries to get the court on it’s side, it always has tales of woe. Cumulus’ Pierre is probably horrified to read these pleadings.