Radio giant Cumulus Media files for bankruptcy protection again

For the second time in the past decade, Atlanta-based Cumulus Media has filed for bankruptcy protection to reduce debt.

Facing headwinds from a shrinking business, the nation’s second-largest radio company has made a “prepackaged” bankruptcy filing. A press release said this will allow the company “to eliminate approximately $600 million of debt, substantially deleveraging its balance sheet and enhancing its ability to execute on strategic priorities.”

Cumulus owns more than 400 radio stations across 86 markets. In metro Atlanta, it owns four radio stations: New Country 101.5, rock station 99X, pop station Q99.7 and classic hip-hop OG 97.9.

Credit: RODNEY HO/AJC

Credit: RODNEY HO/AJC

The company promises this move will have “no impact to employees, partners, or listeners.”

In recent years, podcasting and streaming services like Spotify have diverted audience and ad revenue from traditional radio.

Mary Berner, Cumulus president and chief executive officer, said that “broad macroeconomic and industrywide pressures we have faced have remained unrelenting. Against this backdrop, it became clear that Cumulus’s remaining debt burden limited our ability to fully realize the Company’s potential, and this agreement represents a major step forward.”

In October, Cumulus also sued Nielsen, which tracks radio ratings for advertisers, alleging the dominant media survey operation is using its leverage to stunt rivals and inflate prices. Nielsen began excluding Cumulus stations from its monthly ratings surveys in January after the contract between them expired Dec. 31.

Credit: RODNEY HO

Val Carolin, a recently retired Atlanta radio executive who has worked at Radio One, Cumulus and Salem, said many radio companies are still grappling with massive consolidation in the late 1990s and early 2000s that saddled them with massive debt.

“The debt service for many of these companies has become unsurmountable” without these bankruptcy filings, he said.

Ad revenue, which peaked in 2005 in Atlanta, has been declining more rapidly in recent years than the drop in listeners, Carolin noted.

“Advertisers are spending money across so many platforms now,” Carolin said. “They get drawn to the new shiny thing in the room, new media, which comes at the expense of existing media like broadcast, radio and print.”

Cumulus first filed for bankruptcy protection in 2017 to reduce $2 billion in debt, much of it accumulated from a 2011 merger with Citadel Broadcasting. That move cut its debt load in half.

The current bankruptcy filing will eliminate Cumulus’ entire debt load, the company said.

Lenders will receive 100% in new equity along with $50 million in new convertible notes.

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