Cumulus

Sarah Rebetje, Kate Weyant, Eddie
Cumulus Logo

Cumulus Logo – [1]

History

Cumulus Media is a radio broadcasting company with an audience reach of 245 million. Cumulus distributes its sports, news, talk, and entertainment content through its 447 stations that are owned-and-operated by the company. The company’s reach expands across 90 markets in the United States, including eight of the top ten markets in the country [1]. In a $260 million deal in December of 2013, Cumulus acquired Dial Global, Inc., and renamed it Westwood One. Westwood One now serves as a programming service, allowing Cumulus to deliver its content across multiple platforms [4].

Key Executives 

Mary G. Berner, President and Chief Executive Officer [2]

Mary G. Berner, President and Chief Executive Officer [2]

john-abbot

John Abbot – Executive VP, Treasurer, and Chief Financial Officer [3]

 

 

 

 

 

 

richard-s-denning

Richard Denning – Senior VP, Secretary and General Council [5]

Westwood One

Westwood One

Westwood One is a national syndication company that was acquired by Cumulus Media in 2013. Originally known as Dial Global, the company functioned under CBS for over three decades and specialized in syndicated sports broadcasting. Currently, they cover sports such as football in the NFL, golf during The Masters, and broadcast Olympic coverage every two years for both the Winter and Summer games [4]. Westwood One is producing four Christmas from Nov 26th to December 1st 2016. Some of the featured acts will include Train, Neil Diamond and Rascal Flatts. Westwood One looks to create relevant content that pertains to the upcoming Holiday of Christmas [15].

NASH FM

NASH FM is a Cumulus-owned media brand and group of radio station broadcasting across the country. Named after the cultural center of country music, Nashville Tennessee, the NASH FM brand includes 36 different local radio stations that all broadcast on an FM frequency. This brand’s content is broadcasted through the the nation and covers genres from country to rock to hip-hop. It has over 300K followers on their official Twitter account, and often host shows with famous country singers as guests.

Pictured above is the winner of the NASH Next 2016 Contest, Todd O'Niell. Hosted by NASH FM, this contest seeks to find the best talent that might be the next big thing in country music [].

Pictured above is the winner of the NASH Next 2016 Contest, Todd O’Niell. Hosted by NASH FM, this contest seeks to find the best talent that might be the next big thing in country music [13].

As well as being a local station in Iowa, NASH FM also syndicates its shows on a national level under the guidance of Cumulus [7].

The Downfall

For Cumulus, 2015 was a year of tragedy. The company accumulated $2.5 billion in debt. The share price of Cumulus was worth spare change, dropping from its original price by almost 90 percent [8]. One reason this striking increase in debt occurred was because of the hit that the overall radio industry has taken from a significant decrease in listeners these past few years as online streaming content has become more popular. Just in 2016, the revenue of the industry has fallen flat [10]. Cumulus’ top competitor, iHeartmedia, even suffered from this online conversion with its share price dropping by 95 percent [8]. Cumulus has also still been struggling with paying off the debt it accumulated when it bought Citadel, taking on a debt count of $2.8 billion [9]. Cumulus also made the mistake of neglecting tp focus on local markets and caring only about its acquisition of Westwood One and Citadel. Cumulus’ risky business decisions have led the company to drown rather than thrive [8]. However, the new CEO of the Cumulus, Mary Berner, seems to have turned the company in a more positive direction [12].

Financials

In the past three years, Cumulus has seen a decline in sales revenue, a rise in sale expenses, and thus a decline in its net income.

Net income comparison between 3Q2015 and 3Q2016 [6]

Net income comparison between 3Q2015 and 3Q2016 [6]

In 2014, Cumulus’ net revenue was $1.26 billion, with a net income of $11.4 million. The following year, in 2015, their net revenue was $289.44 million with a net income loss of $542.18 million. This is in part due to the massive amount of debt that it has accumulated ($2.5 billion). In 2016, Cumulus announced at the end of the Third Quarter that its net revenue so far for the year is $286.14 million, which is 1.1% down from 2015. The company also reported that 2016’s net income is $32.96 million, which is up from a net income loss of $541 million. 895 million in the first three-quarters of 2015, $14.4 million of its expenses were spent on a legal dispute with CBS over syndicated content.

President Mary Berner expressed the failures of previous years and the somewhat hopeful future of the company by stating that Cumulus, “gained share for the first time in at least four years (in 2016)” [6].

Future

As the newest CEO, Mary Berner is leading a key initiative to turn around the company. Berner has an extensive resume, including her position as CEO at Reader’s Digest Association, Fairchild Publications, and Association of Magazine Media [12]. Berner has experience with companies in trouble, helping Reader’s Digest at a time when it was undergoing reorganization due to bankruptcy [8]. With her expert background in managing large companies, Berner has immediately taken on the challenge of addressing key issues of decreased focus on national syndication, and increased focus on employee satisfaction and local affiliates [12].

In order to combat a large amount of debt that has been accumulated by the company, Cumulus plans to create a more open dialogue with its stakeholders. This way, Cumulus can come up with strategies aimed at reducing the debt, because attempts in previous years have not worked. Cumulus also stated that it will review all possible options in order to its maximize its efficiency on both a corporate, national and local level.

Cumulus has announced that the company will undergo a restructuring of its organization. It will shift the control of the company into the hands of its localized affiliates and work from a “bottoms-up” approach by strengthening its foundation. Cumulus believes that this approach will increase ratings as well as improve the operation of the company.

Employee Turnover over the course of 2015 and 2016 [14].

Employee Turnover over the course of 2015 and 2016 [14].

With prior negative feedback from employees about the culture of Cumulus, the company looks to initiate a better work environment [12]. Communications will be enhanced through a “top-down” process, where Berner stated that she will answer any employee’s email within 48 hours. Policies about vacation and leave will be reevaluated so that employees will receive improved benefits. Though the merit system has not been manipulated for the past ten years, Cumulus declared that the system will be increased to promote motivation and work efficiency. This initiative has reflected positively among employees. As shown in the above graph, turnover significantly decreased between 2015 and 2016, where voluntary sales turnover experience the most impact, where turnover was reduced from 42% to 27% from April of 2015 to April of 2016 [14].

Cumulus has also started to improve its sales execution in hopes of decreasing its debt. The company aims to incorporate new sales strategies both on a national and a local level. Cumulus also stated that it will extend measurements of sales productivity in order to gather more research about what works and what does not work. That way it can tackle issues and create more productivity in the future. Cumulus is also trying to improve both its marketing tactics, and improve the training given to new employees.

As Cumulus strives to create a more optimal working environment with increased employee satisfaction, the future looks brighter than it did before Mary Berner stepped up as CEO. With the restructuring of management, as well as the focus on local markets over national syndication, Cumulus has taken the necessary steps in order to stay afloat. Although the company still needs to address the debt situation, Cumulus continues to make strides towards increasing revenue and slowly paying the debt off [11].

 

Sources

[1] Cumulus. Retrieved: 22 November 2016. http://www.cumulus.com/

[2] Mary G. Geber. Cumulus Media. Retrieved: 22 November 2016. http://www.cumulus.com/leadership/mary-g-berner.html

[3] John Abbot. Cumulus Media. Retrieved: 22 November 2016. http://www.cumulus.com/leadership/john-abbot.html

[4] Cumulus Completes Previously Announced Acquisition of Westwood One. Global News Wire. Retrieved: 22 November 2016. https://globenewswire.com/news-release/2013/12/12/596613/10061374/en/Cumulus-Completes-Previously-Announced-Acquisition-of-WestwoodOne-f-k-a-Dial-Global-Inc.html

[5] Richard Denning. Cumulus Media. Retrieved: 22 November 2016. http://www.cumulus.com/leadership/richard-s-denning.html

[6] Cumulus Reports Operating Results for Third Quarter 2016. Cumulus Media. Retrieved: 27 November 2016. http://www.cumulus.com/PR/CMLS_09_30_2016_Earnings_Release.pdf

[7] NASH FM 94.7. Cumulus Media. Retrieved: November 28 2016. http://www.nashfm947.com

[8] Radio giant Cumulus tumbles after flying high. Grantham, Russell. The Atlanta Journal-Constitution. Retrieved: 24 November 2016. http://www.myajc.com/news/business/radio-giant-cumulus-tumbles-after-flying-high/npx9H/

[9] Cumulus Media drowning in debt, stock slides. Ho, Rodney. The Atlanta Journal-Constitution. Retrieved: 25 November 2016. http://radiotvtalk.blog.ajc.com/2016/01/10/cumulus-media-drowning-in-debt-stock-slides/

[10] Will 2017 Be Better For Radio? Radio Ink. Retrieved: November 27 2016. http://radioink.com/2016/11/18/will-2017-better-radio/

[11] 2016 First Quarter Earnings Call Presentation. Cumulus Media. Retrieved: November 25 2016. https://www.cumulus.com/PR/CMLS_1Q_2016_Earnings_Release_Presentation-050616.pdf

[12] (9-19-2016) The Cumulus Turnaround. Radio Ink. Retrieved: November 27 2016. http://radioink.com/2016/10/21/the-cumulus-turnaround/

[13] And the Winner is: Country Singer Todd O’Neill Wins NASH Next 2016 Challenge including Cumulus Radio Airplay Across the U.S. and Big Machine Label Group Recording Contract. Cumulus Media. Retrieved: 28 November 2016. http://www.prnewswire.com/news-releases/and-the-winner-is-country-singer-todd-oneill-wins-nash-next-2016-challenge-including-cumulus-radio-airplay-across-the-us-and-big-machine-label-group-recording-contract-300351675.html

[14] 2016 First Quarter Earnings Call Presentation. Cumulus Media. Retrieved: November 25 2016. https://www.cumulus.com/PR/CMLS_1Q_2016_Earnings_Release_Presentation-050616.pdf

[15] Westwood One Making Christmas Special. Radio Ink. Retrieved: November 28 2016. http://radioink.com/2016/11/18/westwood-one-making-christmas-special/

 

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