Cumulus Media Inc., the nation’s second largest radio company, filed for Chapter 11 bankruptcy protection on Wednesday.
The broadcaster, which owns top-rated Toledo station 99.9 FM WKKO-FM, lead by the Shores and Steele morning show, entered into a restructuring support agreement to reduce its debt by more than $1 billion.
Cumulus traces its roots to 1958, when Toledoan Lewis Dickey, Sr. started Midwestern Broadcasting with a pair of radio stations. In 1997, those stations were acquired by Cumulus Media Inc., operated by his sons. The company is based in Atlanta and had 5,500 employees at the end of last year.
Today Cumulus Media Inc., which operates 446 stations in 90 markets, also owns six other Toledo-area operations: 106.5 FM WTOD-FM, 93.5 FM WRQN-FM, 98.3 FM WMIM-FM, 105.5 FM WQQO-FM, 100.7 HD2 WQQO-H2, and 94.5 FM WXKR-FM.
A news release sent by Andrew Squire, director of the promotions firm Joele Frank, Wilkinson Brimmer Katcher, said Cumulus expects all operations, programming, and sales to continue as normal during the restructuring process. It expects to emerge from bankruptcy by next spring.
In the release, Mary Berner, president and chief executive officer of Cumulus Media, said the debt left by “previous years of underperformance remains a significant financial challenge we must overcome for our operational turnaround to proceed.
“The actions we are taking today to address our balance sheet are a critical step forward for Cumulus. We will use this restructuring process to relieve the financial constraints on our continued progress, allowing us to focus our resources on investing in our business and people to strengthen our competitiveness and ultimately drive growth.”
She added: “We have ample cash to support our operations and service our advertisers, vendors and affiliates during this period, and we look forward to becoming an even stronger partner to all of them when we complete this important phase of our turnaround strategy.”
When reached by phone, Mr. Squire and Andy Stuart, regional vice president and market manager for Cumulus Media Toledo, declined to elaborate beyond the information in the release.
Industry trade publication Variety reports Cumulus’ current debt at $2.4 billion, with the company having defaulted this month on a $24 million debt payment.
Cumulus had $2.3 billion in debt at the end of September, of which $1.7 billion was a term loan and the rest were 7.5 percent in senior bonds. Some of that stemmed from acquisitions. The Wall Street Journal reports that Cumulus Media spent about $5 billion in acquisitions between 1998 and 2013, the largest being a 2011 purchase of Citadel Broadcasting Corp.
The company’s biggest competitor, IHeartMedia Inc., is also struggling to find a solution to significantly slash its debt pile outside of bankruptcy court.
IHeartMedia owns seven operations in Toledo: 92.5 KISS FM, 101.5 The River, 104-7 WIOT, 1370 WSPD, 103.7 ‘CKY, Fox Sports 1230, and 94.9 The Beat.
IHeartMedia, the largest owner of U.S. radio stations with more than 250 million monthly listeners in the United States, said in May there was substantial doubt about its ability to continue as a going concern, according to Reuters.
Contact Geoff Burns at: email@example.com or at 419-724-6054.
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