Although there is still that lawsuit United States Traffic Network filed against Entercom, CEO David Field is probably hoping 2018 comes to a speedy conclusion. Entercom says USTN’s financial woes will cost the company $25 million in revenue and cash flow in 2018. Another $6 million is expected to be lost in Q3 before “it’s a wash” in Q4 according to Field.
Entercom is already producing traffic reports in-house and selling its own inventory after terminating its agreement with USTN. The company expects to add a few more sellers but a huge investment is not expected. CFO Richard Schmaeling says Entercom should take in about $15 million in traffic revenue of its own this year and that number is expected to double in 2019.
The two executives continued to defend the termination of its relationship with USTN on their quarterly earnings call, Wednesday. Field continues to say, “we are very happy to be moving on and get this behind us.” USTN, on the other hand, has filed a $5 million lawsuit against Entercom claiming they are a corporate bully, they fraudulently stole data to create a competitive company, and they backed out of a deal at the last minute to take over the company.
Entercom says after inheriting the traffic situation from CBS Radio the company tried to help USTN to get their financial house in order. And after learning they were not making any progress they terminated their agreement. Entercom says USTN stopped paying CBS late last year and by the end of March 2018 they owed Entercom $23 million. Schmaeling says Entercom offered to convert the debt into equity along with taking back 1/3 of its inventory to sell.
