From the inestimable Jerry Del Colliano: a former employee of Cumulus Media is pursuing a class-action lawsuit against the company (common share stock price as of today: $2.55) alleging several violations of employment law. The suit is in the very preliminary stages now, but if any of Jerry’s other informants inside Cumulus (and other large radio conglomerates) can back up their “believe it or not” horror-stories, the company – and perhaps the entire industry – is in for some serious trouble.
A quick history recap: after the passage of the Telecommunications Act of 1996, the radio industry went on a station-buying binge. This led to massively inflated prices for stations across the nation. Flush with cash from investment banks, radio companies bought other radio companies, leading to a situation where less ten major broadcast conglomerates controlled some two-thirds of the industry’s total revenue.