As part of its Chapter 11 Bankruptcy Cumulus has asked for court approval to dump several contracts in Chicago, including those with the Chicago White Sox, Chicago Bulls and the Merlin stations it has been LMAing since 2014, WKQX-FM and WLUP-FM. Cumulus had also announced its plan to purchase the stations in 2017. The court filing says those two Chicago stations were losing millions of dollars (see next story) Here’s what CEO Mary Berner said about those contract…
Berner said, “As part of our operational turnaround, we have been focused on taking proactive steps to address unprofitable areas of our business. We are taking this action because the economic terms of these legacy contracts guarantee that we lose money and, as such, continuing them in their current form is not in Cumulus’s best interests. In many of these situations, we have been engaged in discussions with the counterparties to these agreements for months and have not been able to arrive at revised terms that work for both Cumulus and the counterparty. We will continue to take the necessary steps to strengthen our competitiveness and position Cumulus for continued profitability.”
So what did the judge say about the Merlin request? U.S Bankruptcy Court Judge Shelley Chapman wrote, “The Debtors are authorized to immediately take all actions necessary to effectuate the relief granted in this Order in accordance with the Motion. The rejection of the Merlin agreements as authorized herein constitutes a sound exercise of the Debtors’ business judgment, made in good faith and for legitimate commercial reasons, is appropriate and necessary under the circumstances described in the motion and is warranted and permissible under the bankruptcy code.”
We asked Michaels if this would lead to him getting the Merlin stations back and his answer was “yes.”
