In a memo sent to Cumulus employees, Monday, CEO Mary Berner said selling KLOS in Los Angeles was all about portfolio optimization, which is one of the company’s key strategies to position Cumulus for long-term success.
In February, Cumulus announced the first big deal under this strategy when WPLJ in New York and five other stations were sold to EMF for $103.5 million. Cumulus also sold WNSH in New York and two other stations to Entercom while adding three stations to its Indianapolis cluster.
The Monday KLOS deal had been the big rumor late last week. Meruelo will pay $43 million for the Rock station to add to its cluster of six L.A. stations which includes POWER 106, purchased from Emmis in 2017 for $82.8 million. At the same time, Cumulus announced a swap with Jeff Warshaw’s Connoisseur Media. Cumulus picks up four stations in and around Allentown, PA, and sends two Southern Connecticut stations into the hands of Warshaw.
It’s expected that more major market stations will be moved by Cumulus as they attack their debt following a successful exit from bankruptcy. The cash from the sale of KLOS will be used to pay down more debt and invest in other opportunities, according to Berner. In L.A., Cumulus is now left with one station, KABC. And having one station in a top market like L.A. is a tough formula to try to win with.
In the memo, Berner said the February transaction and the deals announced Monday mark another important step forward in Cumulus’ efforts to improve its long-term competitive position. “Of course, we always regret having to say goodbye to any members of Cumulus, and I hope you join me in thanking our colleagues from Bridgeport and at KLOS-FM for their many contributions to the company. We certainly wish them the best as they move forward with Connoisseur Media and Meruelo Media.”
Berner concluded the note by telling employees she’s incredibly proud of the progress the company is making.