Bloated with more than $2 billion dollars in debt racked up in the wake of the late 90s-early 00s radio station consolidation orgy, Cumulus Media has finally taken the plunge into Chapter 11 bankruptcy reorganization. The path from there to here began when Cumulus hired Mary Berner as the CEO in 2015 – primarily for her prowess in shepherding Reader’s Digest through the Chapter 11 process back in 2009, when that company carried a nearly identical amount of debt.
Things got real back in September, when the Wall Street Journal reported that the company had begun negotiations with creditors who hold “big chunks” of the company’s debt. This was prompted in part by the company’s pending delisting from the NASDAQ stock exchange after CMLS shares trended below $1 and stayed there; the company’s net equity had previously fallen below the NASDAQ minimum, which is also a delistable event.
Then Cumulus intentionally skipped a $23 million interest-payment on its debt that was due November 1. It told the Securities and Exchange Commission it did this “in support of the Company’s efforts to develop and implement a restructuring that will allow the Company to continue its operational and financial momentum,” and noted that the missed payment would trigger a default after 30 days.
In a memo to staff, CEO Berner was frank about the fact that “we can’t fully turn the company around until we reduce our excessive debt-load,” and that skipping the payment would incentivize creditors to compromise to avoid default. Continue reading “Cumulus Goes Chapter 11; How Long for iHeart?”
Month: December 2017
Historical Context for the Imminent Demise of Network Neutrality
On December 14, the Federal Communications Commission will vote 3-2 along party lines to obliterate the regulations that preserve the principle of network neutrality in the United States. Many have written more eloquently than I can on the policy implications; some excellent examples reside here, here, and here.
But the spectacularly misnamed “Restoring Internet Freedom” Order represents much more than a big wet kiss to internet service providers, giving them carte blanche to engage in data-discrimination dependent on content-creators’ – and your – ability to pay to send and receive. It functionally removes the FCC from having any role to play in making sure that ISPs don’t balkanize the online world to extract maximum revenue, pushing that responsibility into the lap of the Federal Trade Commission – though one Commissioner has already gone on record saying the FTC doesn’t have the legal authority or technical expertise to handle it.
As added bonuses, the Order also preempts any and all state laws that might seek to preserve the principle of network neutrality going forward, and allows ISPs to play fast and loose with the disclosures they must make regarding what you actually get when you pay for broadband service. Continue reading “Historical Context for the Imminent Demise of Network Neutrality”