A prestigious radio industry analyst and author of Inside Music Media revealed on Thursday a stunning ratings nosedive across a broad array of formats for Cumulus Media’s Citadel acquisition.
In addition to its virtual implosion of its bedrock conservative AM talk stations, Cumulus’ dramatic decline in numbers is meaningful because the Citadel acquisition made the company highly leveraged with $2.23 billion of debt.
Since acquiring Citadel in September 2011, Cumulus’ ratings plunge has resulted in stunning losses of audience share for 39 of 42 major stations, including such flagships as:
- WABC/NY down 44%
- KABC/LA down 52%
- WLS/CHI down 57%
- KGO/SF down 58%
- KSFO/SF down 38%
- WBAP/DAL down 32%
- WLS-FM/CHI (Classic Hits) down 45.9%
- KLOS-FM/LA (Classic Rock) down 24.6%
- WGVX-FM/MN (Sports) down 80.8%
- WKDF-FM/Nashville (Country) down 45.2%
- WDVD-FM/Detroit (Hot Adult Contemporary) down 38.3%
- KBEE-FM/SLC (Hot Adult Contemporary) down 50%
As the data above reveals, the decline has been broad-based and steep in a host of genres that have previously been considered bulletproof, like Country and Sports. In addition, Cumulus’ ratings vortex has eviscerated its traditionally strong talk radio audience, which has been a stanchion of the grassroots conservative movement for over twenty years.
Jerry Del Colliano of Inside Music Media says Cumulus CEO Lew Dickey “has lost talent, fired what remained,” and “singlehandedly killed talk radio.”
Last year, conservative luminary Sean Hannity sent shockwaves through the radio world when he decided to dump the Dickeys and Cumulus for Clear Channel. The results for Cumulus have not been pretty. Hannity replacement Michael Savage has seen a 49% loss in the all-important 25 to 54 age demographic on WABC-NY and WBAP-AM Dallas.
Still, the Dickeys have made a small fortune. In 2011 and 2012, Lew Dickey reportedly bagged $22,080,673 in combined total compensation; Cumulus VP John Dickey scored $6,626,687. This comes at a time when the Dickeys’ business strategy has been to radically slash costs and staff.
“You try doing this damage on just one station and you’re fired,” said Jerry Del Colliano. “The Dickeys do it and they are compensated.”
Conservatives say the Dickeys exacerbated Cumulus’ woes when they decided to add Mike Huckabee to the Cumulus lineup in an effort to soften the conservative message by bringing, as Huckabee put it, “more conversation, less confrontation.” (Huckabee’s official online store now offers t-shirts bearing the phrase). Huckabee struggled to gain traction and was canceled in December 2013.
That same year, the Dickeys also launched a radio show hosted by Geraldo Rivera in an effort to “occupy the militant middle and be a referee between ideologies,” according to Rivera. Last year Geraldo’s show lost national syndication.
Cumulus also lost Rush Limbaugh in New York to WOR-AM after Lew Dickey blamed Limbaugh for the loss of “millions” of dollars in advertising following the Sandra Fluke controversy, a claim Rush refuted and that sources close to Limbaugh say were merely an attempt to blame him for the Dickeys’ revenue problems.
Prominent Wall Street analysts are starting to reconsider the Cumulus model. TheStreet.com rates Cumulus as a “hold” with a C- ratings score:
We do not recommend additional investment in this stock despite its gains in the past year… Compared to other companies in the Media industry and the overall market, CUMULUS MEDIA INC’s return on equity significantly trails that of both the industry average and the S&P 500. The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has significantly decreased by 87.4% when compared to the same quarter one year ago, falling from $56.05 million to $7.04 million.
Last December, Cumulus Media Holdings finalized a $2.23 billion loan to refinance its debt.
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