Cumulus Media
Cumulus Media, Inc.
Traded as OTC Pink: CMLSQ
Industry Entertainment
Founded 1997
Headquarters Atlanta, Georgia, US
Key people
Mary G. Berner, CEO, president and director;
John F. Abbot, EVP, treasurer & CFO;
Richard S. Denning, senior VP, secretary & general counsel;
Suzanne M. Grimes, EVP of corporate marketing and president of Westwood One;
Suzanne G. Smith, CAO & VP
Products Radio broadcasting
Revenue $1,141,400,000 (2016) [1]
Number of employees
3,646 full time[2]
Subsidiaries Westwood One

Cumulus Media, Inc. is an American broadcasting company and is the third largest owner and operator of AM and FM radio stations in the United States behind Entercom and iHeartMedia, Inc. Cumulus lists ownership of 446 stations in 90 markets, as of July 1, 2017.[3] It also owns Westwood One. Its headquarters are located in Atlanta, Georgia. Its subsidiaries include Cumulus Broadcasting LLC, Cumulus Licensing LLC and Broadcast Software International Inc[4].

Company history

The Early Years

The company was started in August 1998 by radio consultant Lewis Dickey Jr. and media and technology entrepreneur Richard Weening. The Telecommunications Act of 1996, among other things removed restrictions on the number of radio stations a single owner could control in a market and overall. Dickey, then a nationally known radio programming consultant, was acting as a consultant to a small radio group in which Weening had a personal investment. Dickey and Weening joined forces around Dickey's idea to acquire and operate radio stations in mid-size markets where giant Clear Channel was not focusing. Dickey was the radio expert and Weening was the corporate finance and start-up CEO. Dickey was President of Stratford Research his radio consulting firm [5] and also president of his family company, Midwestern Broadcasting with two stations in Toledo, Ohio which would later be acquired by Cumulus. Weening had successful experience as a start-up CEO in book and magazine publishing, online services and enterprise software systems. He was then CEO of QUAESTUS & Co., Inc., a private equity firm specializing in media and technology start-ups. A student of classics, Weening came up with the name Cumulus [6] which means "accumulation" in Latin and best described Dickey and Weening's plan to acquire stations in 50 or more markets. QUAESTUS provided the seed capital to make the first station acquisitions as a model for the Cumulus strategy.[7]

The next significant milestone was a $50 million investment from closely watched and highly respected State of Wisconsin Investment Board (SWIB) [[[8]]] previously an investor in Weening's magazine publishing company. Full scale operations started on May 22, 1997. Weening assumed the role of Executive Chairman focusing on acquisitions deal structuring, corporate finance and internet from headquarters in Milwaukee, Wisconsin. Dickey selected stations to buy and oversaw radio programming, operations and strategy as Executive Vice Chairman. Dickey brought in highly regarded radio operator William Bungeroth to serve as President of Cumulus broadcasting from new offices in Chicago's Hancock Center. Bungeroth had a reputation as an advertising sales leader. He would oversee market level tactical execution including the integration of newly acquired stations into market operating units. John Dickey, Lew's brother and himself an experienced programming consultant would oversee station content.[9][10]

SWIB's investment was soon followed by another $50 million from Wisconsin-based Northwestern Mutual Life Insurance Company and $25 million from NationsBank Capital Corporation. Financial backing secured, Dickey and Weening set out to acquire radio stations working hard to stay as much "under the radar" as possible not wishing to attract notice or competition. In the first 12 months Cumulus acquired over 100 stations in 31 markets.[7] Almost as soon as the acquisition spree started it was clear the Company would require more than a billion dollars for acquisitions in its sights and plans were laid for a public offering.

The Cumulus strategy as articulated in public filings was to acquire multiple stations in a city or market, consolidate them physically to share a common infrastructure to reduce operating expenses but enrich programming giving each stations a unique music format, live programming, brand and target audience. The central idea was to create a cluster of radio stations that could compete with newspapers by offering advertisers a range of target demographic choices comparable to the range of content sections in print. At the time, newspaper display and classified advertising claimed the largest share of local advertising dollars. By offering a range of audiences like newspapers. Cumulus could gain more share of the local advertising dollar than the individual stations could garner on their own. In addition, acquiring the top performer stations in the market as part of the operating cluster would get more national advertising. The market focus would be those deemed to offer substantial growth opportunities and the station focus was leader station in the market and stations well position for significant growth [11]

A Public Company - Accelerating Acquisition Pace

Cumulus became a public company on June 26, 1998 raising $400 million selling 7.6 million common shares at $14.00, $125 million in Preferred Stock and $160 million in Senior Subordinated Bonds. At that time Cumulus owned or was committed to buy 176 stations - 124 FM and 52 AM in 34 US markets.[12] In its first 17 months, Cumulus acquired 207 stations, creating the first mid size radio conglomerate.[12] Following the company's IPO, its stock fell from $14 to $8 on October 2, 1998 then began a climb to close 1999 at $50.75 Some radio executives familiar with small markets thought that Cumulus was overpaying to buy top stations in markets that did not have a great upside potential.

For 1998 Cumulus reported revenue of $98.8 million, with broadcast cash flow of $26.6 million. Its cash-flow margin reached 27 percent. For 1999 Cumulus reported $180 million in revenue and $46.7 million broadcast cash flow.

In November 19 the Company sold an additional 10 million shares at $24.93 raising $250 million.[11] Acquisitions continued at an accelerating pace. At this point the Company owned or operated pending closing 246 stations in 45 US markets. In 2 years and 6 months the Company became the 2nd largest US broadcasting group in terms of stations operated. In this period, the Company raised a staggering $1.3 billion considering sales of common and preferred stock shares, senior bank lines of credit and senior subordinated debt or junk bonds which when issued were rated CCC+.

The stock market acknowledged the remarkable growth with a remarkable share price that levitated to a high of $51.00 at December 31, 1999.

Challenges in 2000

There was no .com in the Cumulus name but it was a part-time participant in the euphoria of the dot-com bubble and impacted by the hysteria that followed its burst. The reasons included very rapid growth and skyrocketing share price which in the euphoria period fed on itself. The hysteria which followed was driven by the absence of earnings and rumours which suggested the rapid growth might be a fiction.

Here is what happened between January 10 and March 31. A perfect storm of events drove the Company's share price from $50 to $13 between January 1 and March 17 when over 30 million shares traded hands. Driving the decline was persistent rumours of possible accounting irregularities in the rapidly assembled radio group. On January 14 respected Wall Street analyst Frank Bodenchak advised institutional clients that Cumulus may miss his estimates for Q4 1999 and the year. A combination of the possible earnings miss and the rumours of accounting problems created a significant loss of investor confidence.

On March 17, Cumulus reported a loss of $0.20 per share vs $0.15 per share expectation.[13] Broadcast cash flow was $12.3 million vs estimates around $17 million. In addition the Company reported that company CFO Rick Bonick had left earlier in January. It was not officially announced a fact that CNN Money says "roiled the already active rumour mill about accounting irregularities. The Company also reported it would restate quarterly revenues in 1999 as some markets did not comply with Cumulus' revenue recognition policies and booked some advertising contracts for their full value rather than recognizing revenue as the ads aired. As a result, class-action lawsuits were filed against Cumulus charging the company with artificially inflating revenue and profit in 1999. PricewaterhouseCoopers, the company's auditors resigned in April citing material weaknesses in the Cumulus' financial controls[14] arising from the possible revenue restatements.

Meanwhile, Dickey had taken over day-to-day station operations from Bungeroth who resigned in mid January.

During this same period Weening got into a dispute with the SEC over his proposal to reverse some of his and Dickey's 1999 compensation to help offset the earnings miss. While the proposal was never implemented, the SEC maintained it would have amounted to earnings management and was therefore an infraction. Weening finally agreed to pay a fine of $75,000 without conceding wrongdoing to settle the matter in 2003.

As the dust began to settle in April 2000 the company issued revised annual 10K reports for 1998 and 1999 that showed minor variations in quarterly revenue and adjusted net loss for 1999 from $20.8 million to $13.6 million and net loss for 1998 was restated from $13.7 million to $8 million, after the company found a $4.9 million tax benefit that had been under-reported. The restatement as it turns out had no material impact on the financials but in the context of the dot-com bust hysteria rumours of accounting irregularities drove a significant decrease in share price which threatened the Company's ability to finance pending acquisitions.[15]

The Internet Debate

Since November 1998 the Company had been developing an internet platform for classified employment advertising. The new system would operate in tandem with the radio station cluster in each market and offer employers the chance to post available positions on the web and promote their company and the position on the radio stations. At the time of the dot-com bust the system was in beta test in two markets. One of the short-lived but important impacts of the dot-com bubble burst was a loss of confidence that the promise of the internet would ever happen. Many professional radio people like Dickey were skeptical and believed the best course for Cumulus was to focus on the radio strategy and drop the internet projects.[16] Weening who had started a Silicon Valley e-commerce software company in the early 90's had conceived and was overseeing development of the employment platform.[17] Weening advocated for continuance of the project as a key potential source of revenue with a service that would be unique among radio companies. Ultimately, the board backed Dickey not Weening and the Internet project was scrapped.

Changing of the Guard

According interviews with two former members of the Cumulus board, Lew Dickey and his brother John convinced the board to let them run the Company. Dickey, whose family had just sold an Atlanta station for a reported $250 million, offered to invest in Cumulus if needed to close pending acquisitions. The board was concerned about the restatement of revenues and the shareholder lawsuits. This is consistent with reports in a radio industry newsletter [18] which reported that it was a widely held belief in the Radio industry was that the Dickey brothers orchestrated events that lead to the board's decision not to back the Internet project, placing Dickey at the helm of Cumulus, moving the Cumulus headquarters from Milwaukee to Atlanta and to Weening's ultimate resignation as an employee and director in January 2001.[19][20] According to public filings Weening, QUAESTUS management company and other Weening related interests sold their interests in Cumulus a year later in May 2002 at prices ranging from $17 to $21.50 per share not The $55 high but considerably higher than share prices after their sale.

The new CEO of Cumulus Media, as of September 2015 is Mary G Berner.[21][22]

In April 2016, Talk Radio Network filed a lawsuit against Cumulus Media and associated defendants, alleging "antitrust violations, unfair competition, breach of contract and breach of fiduciary duty, among other claims", similar to a lawsuit launched in 2012 and dropped in 2014 by the same plaintiff.[23] In June 2016, Cumulus Media and Westwood One moved to have the new suit dismissed.[23]

In June 2016, Cumulus Media announced the resignation of its executive vice president, treasurer and chief financial officer, Joseph P. Hannan, to "pursue other interests" after six years with the company, to be replaced by John F. Abbot.[24] In October 2016, it was announced Hannan had taken the role of Chief Financial Officer at programmatic advertising company, Social Reality, Inc. [NASDAQ: SRAX].[25] Per SEC filings, Hannan would also "assist the company for several months to ensure a smooth transition".[26]

Chapter 11 bankruptcy

On November 29, 2017, Cumulus filed for Chapter 11 bankruptcy as part of a restructuring of the company.[27]

Chairman, president and chief executive officer

Lew Dickey took full charge. By May 2002 the share price recovered to above the IPO price to a short-lived high of $22 on May 31, 2002. Dickey garnered some strong partners in the form of Bain Capital and Crestview partners who helped finance a series of ambitious acquisitions and partnerships which were creative, made Cumulus a significantly larger company but these acquisitions and Cumulus itself have struggled in the face of slow to no radio ad growth. (another researcher is working on this section)

In 2006, Cumulus acquired control of Susquehanna Radio, with the backing of 3 venture capital firms (Bain Capital Partners LLC, The Blackstone Group and Thomas H. Lee Partners, L.P.) for a price of $1.2 Billion. The 33 Susquehanna stations were privately held in a separate partnership called Cumulus Media Partners, LLC (commonly referred to as CMP on the company's quarterly earnings calls) that was the subject of an equity-for-debt swap in May 2009 in an attempt to avoid defaulting on the terms of the CMP lending agreement. While Cumulus operated the CMP stations, they initially held only a minor ownership interest in them.[28] On January 31, 2011, Cumulus announced a deal to acquire the remaining ownership of CMP from its equity partners in a stock transaction valued at approximately $740 million that is closed in August 2011.[29] As a result of the CMP acquisition, Cumulus now owns a limited-partnership interest in San Francisco Baseball Associates LP, the owner of the San Francisco Giants baseball club.[30]

In July 2010, Cumulus publicly announced formation of a similar venture with Crestview Partners to acquire up to $1 billion of additional radio assets.[31]

In July 2007, the company announced its intention to "go private",[32] however on May 11, 2008, the company announced it was unable to come to terms with the parties involved and the merger/acquisition agreement was terminated.[33]

Like most major American radio station owners, Cumulus has been forced to write down the value of its radio station licenses, resulting in large non-cash losses - $498.9 million in 2008, $230.6 million in 2007, and $63.4 million in 2006.

The company's stock, priced over $56 in 1999,[34] then over $22 in 2004, was as low as $0.45 per share toward the end of 2008.[35][36]

Acquisition of Citadel Broadcasting and Dial Global

Starting in June 2010, Cumulus made multiple unsuccessful offers to buy out Citadel Broadcasting after its emergence from bankruptcy.[37] In February 2011, Cumulus was again said to be in "exclusive negotiations" to acquire Citadel for $2.5 billion paid to Citadel shareholders, according to CNBC. Some Citadel shareholders were said to have been pushing the board to consider a sale.[38] On March 10, 2011, Citadel Broadcasting stations announced via email that Cumulus had purchased Citadel Broadcasting. Citadel was made up of 225 radio stations in over 50 markets, as well as Citadel Media, one of the largest radio networks in the United States. The deal was finalized on September 16, 2011, after acceptance by the FCC and Citadel's shareholders.[39] As part of the deal, Cumulus Media will have to place 14 stations into a separate trust to comply with ownership limits.[40] Following the acquisition, in an effort to focus on larger markets, Cumulus reached a deal with Townsquare Media to swap 65 radio stations in 13 markets, with the majority of the 65 stations being sold to Townsquare.[41]

On August 29, 2013, it was reported by The Wall Street Journal that Cumulus would purchase the syndicator Dial Global for $260 million. To fund the sale, Cumulus, sold 53 more stations to Townsquare Media for $238 million, in markets such as Danbury, CT, Rockford, IL, Cedar Rapids, IA, Quad Cities IA/IL, Waterloo, IA, Portland, ME, Battle Creek, MI, Kalamazoo, MI, Lansing, MI, Faribault, MN, Rochester, MN, and Portsmouth, NH. Additionally, Townsquare Media acquired Peak Broadcasting, and Cumulus swapped 15 more stations in Dubuque, IA and Poughkeepsie, NY in exchange for Peak Broadcasting's Fresno cluster.[42][43] The sale to Cumulus was completed on November 14, 2013.[44]

Launch of Nash, CNN partnership, and Rdio/iHeartRadio partnerships

On January 11, 2013, after acquiring the station from Family Radio, Cumulus re-launched WFME in New York City as a country music station under its new Nash FM brand. Nash was designed to serve as an umbrella brand for all country music-related content across the company's properties, including radio, digital, and live events such as the "Nash Bash". All country stations owned by Cumulus would either be branded as Nash FM, or be strongly cross-promoted as part of the Nash family of properties.[45][46]

In July 2014, Cumulus announced that it would end its partnership with ABC News Radio, and enter into a new partnership with CNN to syndicate news content for its stations through Westwood One beginning in 2015. The network will provide its content on a white label basis, allowing individual stations to use their own brands for the content. In turn, ABC announced that it would take the syndication of its radio content in-house, with distribution handled by Skyview Networks.[47][48]

On September 15, 2013, Cumulus announced that it had entered into a partnership with music streaming service Rdio; Cumulus took a stake in Rdio, and provided the company with access to its advertising sales team for a freemium tier, the ability to offer Cumulus radio stations on the Rdio service, and $75 million in marketing on Cumulus stations over five years. The stations launched on Rdio in August 2015; prior to the deal, Cumulus partnered with the competing iHeartRadio service.[49][50] However in November 2015, Radio filed for bankruptcy and sold its assets to Pandora Radio.[51][52]

FCC actions

On December 30, 2008, Cumulus Media was issued a $14,000 Notice of Apparent Liability by the Federal Communications Commission related to the stations in the Macon, Georgiacluster. The FCC says Cumulus failed to comply with its record-keeping requirements and its Equal Employment Opportunity rules on information on recruitment sources. Cumulus, along with two other companies, had 30 days to pay or file a statement asking for reduction or cancellation of the forfeitures.[53]


On March 17, 2000, the company was forced to restate revenue and broadcast cash flow for three quarters of 1999 after discovering that some of its sales force had prematurely booked revenue to meet sales goals.[54] On November 8, 2005, the company decided to amend and restate its results for the second quarter of 2005.[55]

See also


  1. ^ "Cumulus Media Inc. (CMLS)". Yahoo! Finance. Retrieved 2017. 
  2. ^ "Cumulus (CMLS) Business Summary". Yahoo! Finance. Retrieved 2017. 
  3. ^ "Cumulus Media". Retrieved 2017. 
  4. ^ "Subsidiaries of Cumulus Media Inc". U.S. Securities and Exchange Commission. October 14, 2013. Retrieved 2014. 
  5. ^
  6. ^ "Google". Retrieved 2017. 
  7. ^ a b "History of Cumulus Media Inc. - FundingUniverse". Retrieved 2017. 
  8. ^ url=
  9. ^
  10. ^
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  12. ^ a b "CUMULUS MEDIA INC (CMLS) IPO". Retrieved 2017. 
  13. ^ "Cumulus Media shares dive - Mar. 17, 2000". Retrieved 2017. 
  14. ^ "Milwaukee Journal Sentinel - Google News Archive Search". Retrieved 2018. 
  15. ^ "Cumulus Media Inc. - Company Profile, Information, Business Description, History, Background Information on Cumulus Media Inc". Retrieved 2018. 
  16. ^ "CONNECT, Inc.'s OneServer Powers PhotoDisc Online to Win PC Week Web Commerce Award; PhotoDisc Named One of Top 10 Web Commerce Sites. - Free Online Library". Retrieved 2017. 
  17. ^ "Connect Inc.Mountain View, Calif". 21 December 2004. Retrieved 2017. 
  18. ^ Inside Radio, March 16, 2000
  19. ^ "What Happens To Dickey's Posse Now - Inside Music Media". Retrieved 2017. 
  20. ^
  21. ^ Inc., Cumulus Media. "Cumulus Media Appoints Mary G. Berner Chief Executive Officer". Retrieved 2017. 
  22. ^
  23. ^ a b "Cumulus Seeks Dismissal of Syndication Suit". Retrieved . 
  24. ^ Cumulus Media. "Cumulus Media Appoints John Abbot as Chief Financial Officer". Retrieved . 
  25. ^ Inside, Radio (2016-10-20). "Cumulus Vet Hannan Secures CFO Spot at Ad Tech Company". Inside Radio. 
  26. ^ "CUMULUS MEDIA APPOINTS JOHN ABBOT AS CHIEF FINANCIAL OFFICER". Securities & Exchange Commission. 2016-06-22. 
  27. ^ "Cumulus Strikes Restructuring Deal--Using Chapter 11 Process". Retrieved . 
  28. ^ Radio Business Report/Television Business Report - Voice of the Broadcasting Industry Archived 2009-05-13 at the Wayback Machine.
  29. ^ "Cumulus Media Inc. Enters into Agreement to Acquire Cumulus Media Partners, LLC". Retrieved 2017. 
  30. ^ Cumulus Media, Inc. (December 31, 2012). "Notes to consolidated financial statements". Annual report to the Securities and Exchange Commission on Form 10-K. p. F-14.
  31. ^ "Cumulus Media and Crestview Form Venture". New York Times. 8 April 2010. Retrieved 2014. 
  32. ^ "Cumulus Agrees to $1.3 Billion Buyout". New York Times. July 4, 2007. Retrieved 2014. 
  33. ^ "Cumulus Buyout Is Terminated". New York Times. May 12, 2008. Retrieved 2014. 
  34. ^ "NASDAQ:CMLS stock chart 1998-2014". June 29, 2014. 
  35. ^ "Cumulus CEO: "Half the companies in radio gone in 36 months"". November 24, 2008. Archived from the original on June 24, 2012. 
  36. ^ "NASDAQ:CMLS stock chart 2004-2014". June 29, 2014. 
  37. ^ "Citadel says "No" to two merger offers from Cumulus". December 6, 2010. Archived from the original on 2011-07-15. 
  38. ^ "Citadel confirms "exclusive negotiations" with Cumulus - but says "no deal yet"". February 17, 2011. Archived from the original on 2011-04-26. 
  39. ^ "211 Cumulus Now Owns Citadel Broadcasting". Business Journal. September 16, 2011. Retrieved . 
  40. ^ "Cumulus files to divest 14 stations, to complete its $2.4B purchase of Citadel". April 12, 2011. Archived from the original on April 16, 2011. 
  41. ^ Townsquare and Cumulus swap 65 stations in 13 markets Archived 2012-05-06 at the Wayback Machine. - Archived 2012-01-03 at the Wayback Machine. (released April 30, 2012)
  42. ^ "Official: Cumulus Buys Dial Global, Spins Some Stations To Townsquare; Peak Stations Sold To Townsquare, Fresno Spun To Cumulus". All Access. August 30, 2013. Retrieved 2013. 
  43. ^ "Cumulus Makes Dial Global And Townsquare Deals Official". RadioInsight. August 30, 2013. Retrieved 2013. 
  44. ^ "Cumulus-Townsquare-Peak Deal Closes". All Access. November 15, 2013. Retrieved 2013. 
  45. ^ McKinley Jr., James C. (21 January 2013). "New York Radio Gets a New Country Station". The New York Times. Retrieved 2013. 
  46. ^ "Cumulus' Lew Dickey Explains Why NYC's New NASH-FM 'Is Good for Nashville' at CRS". Billboard. Retrieved 2014. 
  47. ^ "ABC News radio deal with Cumulus to end, but there's an upside". Capital New York. Retrieved 2014. 
  48. ^ "Cumulus taps CNN for Westwood One news service". Atlanta Business Chronicle. Retrieved 2014. 
  49. ^ "Rdio cues up traditional radio stations, hoping to get an edge on competition". Los Angeles Times. Retrieved 2016. 
  50. ^ "Rdio Partners With Cumulus Media (Report)". Billboard. Retrieved 2016. 
  51. ^ "Pandora To Buy Rdio Assets For $75M In Cash, Rdio Files Ch.11 And Shuts Down Service". TechCrunch. AOL, Inc. Retrieved 2015. 
  52. ^ Roettgers, Janko (November 16, 2015). "Pandora Is Acquiring Music Streaming Service Rdio For $75 Million". Variety. Retrieved 2015. 
  53. ^ FCC Issues EEO Notices Archived 2008-12-31 at the Wayback Machine. - Radio Ink (released December 30, 2008)
  54. ^ "Milwaukee-Based Radio-Station Owner Restates Revenue, Cash Flow". Archived from the original on 2016-02-15. 
  55. ^ "Cumulus Reports Third Quarter 2005 Results". 

External links

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