Cumulus Meltdown Continues; is iHeartMedia Next?

Things continue to spiral downward over at Cumulus Media, whose stock closed at 29 cents at the end of trading last week. That put the company’s total market capitalization at just $67.8 million dollars, or just 39% of what the HD Radio system sold for two months ago. NASDAQ has threatened to delist CLMS stock next spring unless it can resume consistent trading above $1.

Perhaps a better comparison might be to a direct competitor: see Townsquare Media, one of the second generation of radio consolidators formed in the last half-decade and now the third-largest owner of radio stations in the country (right behind Cumulus). Townsquare owns about 100-150 fewer stations than Cumulus does, has no holdings in network syndication or distribution companies, but it is making acquisitory forays into online platforms/apps and just three months ago purchased a traveling carinval company. Sound familiar? Only on the surface, because Wall Street valued Townsquare at 106 million dollars last Friday ($10.70/share on 9.94 million shares). Read More

Cumulus Meltdown: Consolidation Karma

The thud heard ’round the industry: Cumulus Media, the second-largest radio station conglomerate in the country, ousted its founders in late September. CEO Lew Dickey has been demoted to a vice chairman, while brother John (an executive vice president) has already cleared out his office.

The move was orchestrated by private equity firms who hold a significant portion of Cumulus’ stock and have not been pleased by the company’s meltdown this year, which has seen its stock price tank by more than 80%, from north of $4 at the beginning of 2015 to 75 cents at the close of trading last week. As I write this, Cumulus’ market capitalization in total is $169.5 million. That’s a valuation more than $1 million less than what DTS bought the HD Radio system for. Think about that: hundreds of stations, a passel of networks, and online properties worth less than a mostly-ignored technology. Read More

Voltair Controversy: The Seduction of Denial

Next month is the National Association of Broadcasters’ annual radio convention, to be held in Atlanta. I wish I could be a fly on the wall in some select panels and the local off-hours watering-holes. Fireworks are expected over an issue that’s been feistily percolating for more than a year — the integrity of the U.S. radio ratings system.

First, a quick primer about radio ratings in the United States. Administered by Nielsen, the ratings are collected by two primary means: listener diaries and Portable People Meters (PPM). The PPM system is a small pager-like device that selected listeners carry around with them; when exposed to a station’s broadcast, the meter logs the station and time spent listening. How? Stations that subscribe to the Nielsen ratings in PPM-enabled markets broadcast a special audio watermark that is inaudible to listeners, but that PPM devices can hear. The watermark is a 1000-3000 Hz tone; as a proprietary technology, the only way to work out how it really operates is by observing it in the wild or by examining its patents.

When the PPM system was introduced in 2007, it was touted as a new era for measuring radio ratings because listeners aren’t all that great about accurately and meticulously recording all the stations they’re exposed to. For example, radio often functions as background noise in places like restaurants, stores, and offices; when you’re at the dentist are you really paying attention to the smooth/lite pabulum oozing from the waiting room ceiling? Today, four dozen markets are measured using PPM technology. Read More