|Cumulus cancels 14 contracts
Debtor-in-possession Cumulus bails on its White Sox and Bulls contracts for Chicago’s WLS/890.
Those are just two of more than a dozen “executory contracts” that the bankruptcy court is allowing Cumulus to “reject,” while it’s in Chapter 11 bankruptcy protection. Based on this NOW Newsletter’s review of new court filings, the judge buys the argument that the contracts are “no longer necessary or economically viable” for Cumulus. Also on the “Annex 1” list of “contracts to be rejected” – Westwood One’s contract with CNBC. Westwood’s deal with Sports USA Media for the NFL Seattle Seahawks. A long-overhanging deal connected with the NFL Buffalo Bills, before the franchise went to Entercom in 2012. The separation agreement with onetime Westwood President/CFO Bill Battison, and a Wachovia Bank Trust connected with Battison. A trade agreement. And some real estate/tower leases and contracts, including one with Dickey Broadcasting Company in Toledo. (That no doubt dates to when Cumulus co-founder Lew Dickey was still CEO.) Federal bankruptcy judges like Judge Shelley C. Chapman have the power to wipe out certain executory contracts – and these unlucky 13 appear to be going-going-gone. As you’ve read here, there’s an important February 1 meeting in Judge Chapman’s court, and it should be crowded. Meanwhile – who picks up the rights to the MLB White Sox and NBA Bulls? That’s 13 contracts being “rejected” – and then a high-dollar fourteenth one, also in the Windy City -
Cumulus bails on its pact to buy Chicago’s WKQX/101.1 and WLUP/97.9 from Merlin Media.
The company says it’s lost “approximately $8.4 million” since it began the LMA-with purchase feature in 2014. Last year was the worst - $5.1 million in losses for 2017. Cumulus never exercised its “call” option to buy the stations, but last October on the first possible day, Merlin exercised its “put” – meaning Cumulus was supposed to buy the two FMs for $71 million, minus the LMA fees. That number’s currently around $50 million, and Cumulus says that’s more than the fair market value. So it wants to “reject” both the LMAs and the contract requiring it to buy WKQX and the Loop. The original 2014 deal with Merlin Media was signed by then-CEO Lew Dickey, who wanted more firepower in Chicago against bigger owners like iHeart and CBS. His successor Mary Berner says it didn’t work out – and says in a 24-page filing that the pact is “economically disadvantageous” for Cumulus. As with the Chicago White Sox and Bulls – where will WKQX and the Loop wind up?
The unsecured claims against Cumulus include $186,000 owed to iHeart.
This one’s from Radio World - iHeart has all kinds of business dealings with Cumulus, including ratings bonus money for the Premiere-distributed Steve Harvey morning show on Cumulus stations like urban AC WRBO Memphis ($25,000 is claimed there). Also ratings bonus money for the syndicated Brooke & Jubal morning show on iHeart’s KKMG Pueblo. iHeart’s also standing in line for money coming from spots placed by Westwood One on various iHeart stations. It all adds up to about $186,000 in claims that are unsecured – an important word here. Yesterday’s NOW lead about was about a third-party outfit named Drum Capital Management that’s offered at least one unsecured creditor 60 cents on the dollar – betting that it can eventually get more than that out of the Cumulus Chapter 11 re-structuring.
755 radio stations were sold last year, says BIA/Kelsey.
That’s up from 576 stations in 2016, and the total dollar value soared from $497 million to $3.321 billion. However – and this is a huge caveat – BIA/Kelsey also says “These increases can be credited to” the Entercom merger with CBS Radio in mid-November. So excluding Entercom/CBS, the radio station deal market in 2017 looked pretty much like 2016, which wasn’t a vintage year. Interestingly, radio’s roughly $3.3 billion in transaction volume compares pretty favorably with that of the much larger TV industry – about $4.7 billion. And that’s after the floodgates opened once the FCC spectrum auction was done. BIA/Kelsey spies a couple of positives for radio in 2018 –
The new tax bill should boost “the values of broadcast properties.”
More from the just-released BIA/Kelsey report on 2017 and “trending factors for 2018” – They reason that “by lowering the overall corporate tax rate and full expensing of new capital equipment for five years, the values of broadcast properties (much like most other businesses) will most likely increase.” There’s a countervailing trend, though, of “increased competition faced by local and radio television stations.” There’s also the “Dow” effect – it’s above 26,000 – with a prediction that “this stronger economy may lead to increased activity by some of the publicly-traded broadcast companies, as well as privately-held companies looking to expand.” Checking the rear-view mirror, BIA/Kelsey says “the fact that Entercom was able to finance [the CBS merger] and successfully integrate these stations into their operations” is “a very good sign for the local radio industry, when business success follows such a major acquisition.” Of course, it’s up to Entercom CEO David Field and his team to actually make that happen. There’s commentary about radio and TV plus charts for “Number of stations sold” and “Transactions value update” from BIA/Kelsey here.
Spotify expands the menu into news and talk – chasing terrestrial radio ad dollars.
“Eight companies, including BuzzFeed and Refinery 29, have agreed to produce programming for the new initiative called ‘Spotlight,’” says Bloomberg’s Lucas Shaw. Spotify began as an online music source, but hopes that new talk-based programming might help it grab some of the ad dollars going to terrestrial radio. The Spotlight content begins coming online in February, and in this political year, there will naturally be some political shows. Another angle – making Spotify more of a full-service audio streamer may help as the company starts trading its shares in public, following the expected “direct listing” on an American exchange.
Louisville Public Media President Michael Skoler leaves “to pursue other interests.”
That resignation comes as a surprise at the three not-for-profit radio stations under his guidance – news/talk WFPL/89.3, classical WUOL/90.5 and adult alternative WFPK/91.9. Louisville Public Media Board Chair Todd Lowe wouldn’t comment for the Louisville Courier-Journal beyond thanking Skoler for his work and wishing him well. He came to the River City in 2016 after working for Public Radio International. The Courier-Journal adds that “Louisville Public media found itself in the news last month, after the subject of a months-long Kentucky Center for Investigative Reporting investigation” – that’s part of Louisville Public Media – “died by suicide, days after the series began running.” State Rep. Dan Johnson, who’s also a pastor, faced claims of sexually abusing a teenage girl at his church. Interim president/GM at Louisville Public Media is executive editor Stephen George.
From the Rumor Mill – Is Scripps exploring a sale of its radio group?
Hang on – that doesn’t mean the stations will be sold, next week or any time at all. After all, this NOW Newsletter reported last Summer that there was a “book” out on Townsquare, and there’s been no visible action. As for Cincinnati-based Scripps, we know that last Fall, influential investor Mario Gabelli expressed his disapproval of its revenue strategy – and said he’d seek three board seats (November 7 NOW). Gabelli’s concern was that Scripps was re-shaping itself into a “national” company, at a time when more advertising’s flowing toward digital. The national strategy was initiated by previous CEO Rich Boehne. His successor Adam Symson might be less wedded to radio than Boehne was, when Boehne struck the deal with Journal that resulted in Scripps keeping the radio/TV assets of both companies, and spinning off the print properties into a new company. Gabelli knows that E.W. Scripps remains controlled by the Scripps family. But you can imagine the new management thinking about spinning off the radio group, to show Gabelli and others that it’s willing to take investor-friendly action. Question is – where are the potential buyers for the Scripps radio stations?
“Spanish Broadcasting System makes big cuts in New York,” says Radio Insight - more than a dozen folks at Spanish tropical “Mega 97.9” WSKQ and Spanish contemporary “Amor 93.1” WPAT-FM. The site names names such as Mega afternoon co-host Janeiro Matos and overnight personality “Jumpin’ Jay.” SBS did find the dough to re-new afternoon co-host Frederick “El Pacha” Martinez, who’d been away since his contract expected in mid-December. Diario Libre says he came back for less than the reported $5 million he’d been asking for. Question is – will SBS make similar cuts in other markets? It’s still grappling with a missed principal payment on some notes, though it’s been making interest payments.
“Santa 100” has left town on the radio format-change sleigh, replaced in Columbus, Georgia by an urban format named “Hot 100.” Radio Insight predicted a “Hot” station, either urban or CHR, and iHeart went with urban on WGSY Phenix City, Alabama/100.1. The station’s previous AC “Sunny 100” format has become “Sunny 94.7.” It migrated to iHeart’s WHAL at 1460, also Phenix City. And a translator leased from Jim Campbell-run Radio Training Network, W243BX at 94.7, licensed to Highland Pines, GA.
Lest we forget, it’s been four months since Hurricane Maria ravaged Puerto Rico, and the FCC’s been faithfully charting the number of still-silent radio stations – and it’s a big number. Only about 57% of the island’s licensed AM stations are “confirmed operational.” 21 are “confirmed out of service” by the Puerto Rican Broadcast Association. Another 8 are “suspected to be out of service,” and two AMs have been given Special Temporary Authority to be off. On the FM band, Just 50% are “confirmed operational,” with 28 at “unconfirmed status.” Maria walloped Puerto Rico on September 20. See the FCC’s latest daily outage report here.
Staff changes at the FCC, where Nirali Patel segues from Commissioner Brendan Carr’s office to Chairman Ajit Pai’s operation. She’d been a Legal Advisor to Carr since last Summer, and now is Special Counsel to the Chairman. She’s only been at the agency since January 2017, and before that practiced at Hogan Lovells, Willkie Farr & Gallagher, and Sidley Austin. She’s a graduate of UNC-Chapel Hill and American University Law School. Next door at Carr’s office, his new Legal Advisor for wireless is Will Adams, a former law clerk for Tenth Circuit Court of Appeals Judge Timothy Tymkovich, a political consultant (at Red Door Strategies) and president of the Federalist Society at Harvard Law School. Commissioner Carr’s also bringing on Andi Roane as Staff Assistant.
The latest Nielsen diary-market books for Fall 2017 –
Normal ground rules – these are age 12+ total-week AQH shares, from continuous measurement (four-book) markets. The three numbers you see are for Spring 2017, Summer and now Fall (covering September 14-December 6). Nielsen uses 7-day diaries, and we’re seeing only the shares of stations that subscribe.
Chattanooga just approved the 111th consecutive quarterly win for Entercom’s country “US 101” WUSY (11.5-12.7-11.9). That’s a nearly 28-year streak, back to (the Taylor Swift year of) 1989. As usual, Chris Huff is tracking the US101 streak and other marks of distinction here. Bahakel’s AC “Sunny” holds onto second place (6.9-9.5-8.9), with Cumulus classic rock WSKZ third (7.1-7.8-7.3). Local owner Brewer has fourth-ranked urban “Power 94” WJTT (5.2-6.2-5.8), while Bahakel’s got tied-for-fifth top 40 WDOD (6.8-5.7-5.0) and the classic country “Q97.3/Q99.3” FM/translator service based at WUUQ (6.8-5.7-5.0). The rest of the top ten is is top 40 WKXJ (Entercom, 3.8-2.9-4.3), “Talk Radio 102.3” WGOW-FM (Cumulus, 3.1-2.9-3.1), rock WRXR (Entercom, 3.1-2.66-3.0) and Brewer’s urban AC “Groove 93” WMPZ (1.9-2.6-2.3).
Huntsville hews to its pattern of just one station in double digits. That’s once again iHeart’s country WDRM, but the margin is thin (11.1-10.4-10.2). Even so, Chris Huff counts up the wins and says this is WDRM’s 73rd consecutive #1. The rest of the top five – Cumulus top 40 WZYP (6.7-5.7-7.1), Local NCA Inc.’s AC “Mix” WRSA (6.5-6.4-5.2), Southern Stone’s rock WRTT (5.3-4.7-5.2) and Cumulus talk WVNN-AM/FM (4.0-3.6-5.0). The second five is Southern Stone’s hot AC “Star 99.1” WAHR (4.2-3.8-3.9), iHeart’s classic hits “River” WQRV (3.8-2.7-3.7), sister classic rock WTAK (3.6-4.4-3.2), Cumulus’ urban AC WHRP (4.5-4.2-3.0) and Southern Stone’s rhythmic AC WLOR-AM plus its translator (3.8-3.4-2.6). Local Big River returns to the ratings after a Summer-book show with country “Kix 96” WXFL at a 1.3 share.
Boise eases us into the two-book markets, where the three numbers are Fall 2016, Spring 2017 and last Fall. Cumulus talker KBOI jumps from fifth to first (6.3-4.5-7.3), with its largest share since Fall 2014 (per Chris Huff). Dropping from its from first-ever #1 to second is Impact Radio Group’s country “Bull” KQBL (5.2-6.6-6.3). Third is another Impact property, rhythmic “Wild 101.1” KWYD (4.2-3.4-5.8). Townsquare is fourth with AC “Lite 107.9” KXLT (4.0-3.9-4.7) and fifth is Impact’s hot AC “My 102.7” KZMG (2.3-3.1-4.1) – quite a book for Impact, over all, with one more to come. Boise’s second five begins with top 40 “Kiss” KSAS (3.8-5.0-3.9). Right behind Kiss is a three-way traffic jam at the seventh spot - classic rock “Eagle” KKGL (Cumulus, 2.9-3.4-3.7), Scripps rocker KQXR (4.4-4.7-3.7) and Impact’s variety hits “Bob” KSRV (5.0-3.8-3.7). Tenth place is also a tie, involving Townsquare’s country “Wow 104.3” KAWO (3.6-4.7-3.4) and talk sister KIDO (2.5-3.2-3.4).
Ft. Walton Beach-Destin grants Community Broadcasters’ variety hits “play everything Wave” WWAV (7.5-7.5-9.7) “its largest share since all the way back in Spring 1990,” says Mr. Huff. Community’s also second with country “Highway 98.1” WHWY (7.1-8.0-7.5). Cumulus is the other subscriber, and it’s #3 and #4 with top 40 “Z96” WZNS (5.4-5.8-6.6) and “99 Rock” WKSM (5.4-5.8-6.2). Here’s the rest of the nine subscribing stations – Community’s top 40 WECQ (3.7-4.4-4.4), Cumulus AC “Coast” WNCV (4.6-3.5-3.5), Cumulus country WYZB (2.1-2.2-2.6), Community’s alternative WZLB (3.3-3.1-2.6) and Cumulus talker WFTW (4.6-3.1-1.8). Community (Jim Leven, Bruce Mittman) bought the former Apex cluster here.
Topeka drops both of last Spring’s tied-for-first stations into single digits. That does leave Cumulus AC “Magic” KMAJ-FM on top (9.5-10.2-9.1). Second now is Alpha’s classic country “Legends” KPTK (9.0-10.2-8.2), followed by country sister WIBW-FM (8.6-7.6-7.2). From there, the subscribing stations are rock “V100” KDVV (Cumulus, 6.7-5.3-6.3), classic hits KWIC (Cumulus, 8.1-8.9-6.3), country KTOP-FM (4.3-4.0-4.8), talk KMAJ (Cumulus, 2.9-4.0-2.9), news/talk WIBW (Alpha, 3.3-3.6-1.9), Sports KTOP (Cumulus, back in the book with a 1.0) and (from neighboring St. Joseph) hot AC “K-Jo 105.5” KKJO (0.5-0.4-0.5).
Connoisseur’s buyer for Waterbury’s WWCO/1240 and its new translator is Trignition’s David Webster. And he’ll take it Spanish tropical, simulcasting his Hartford-area Spanish tropical “LA Gigante” WRYM New Britain/840. (That begins under an LMA prior to closing.) WWCO was the mystery station from Tuesday’s NOW story about Connoisseur selling a bundle of central Connecticut signals to Red Wolf Broadcasting for $8 million. Missing from that package was the western-most signal in the four-station “Talk of Connecticut” simulcast based at Hartford’s WDRC/1360. Now here’s the answer – a $260,000 cash sale of 1,000-watt full-timer WWCO and the construction permit for translator W292FI Waterbury. Connoisseur obtained the translator from the FCC’s recent Auction 99, and it will run 99 watts at 106.3. Buyer David Webster of “Trignition Media” closed on “La Gigante” WRYM almost exactly a year ago (January 4, 2017 NOW), and he added a translator, W297BT at 107.3. In this latest purchase of the Waterbury licenses – Connoisseur’s broker was Dick Kozacko of Kozacko Media Services.
Bold Gold picks up another signal in Northeast Pennsylvania, paying $700,000 for “Classic Rock 103.5” WMMZ. It’s a Class A licensed to Berwick, and its studio’s in Bloomsburg, Joe Reilly’s base of operations. (Joe is former major-market programmer/DJ “Bobby Hatfield.” Last August his son David, director of new media, resigned after some posts and tweets about the August 11 demonstration in Charlottesville, which he attended as a private citizen.) Until June of last year, WMMZ was WHLM-FM, and Reilly continues to own news/talk WHLM Bloomsburg/930 and its simulcast partner in Berwick, WBWX/1280. (Also translators in Bloomsburg, Berwick and Danville, PA.) WMMZ buyer Bold Gold Media is led by Vince Benedetto, and its other NEPA stations include classic hits “105 the River” WWRR Scranton. Terms of the $700,000 purchase are $500,000 cash and the balance of $200,000 in a seller note.
The sale of Boston’s about-to-be-relocated 1510 doesn’t include the “WMEX” call letters. But the sale agreement does “recognize that a law suit is pending” involving some of the parties. That’s “regarding transmitter towers.” Ed Perry, the buyer of storied/troubled WMEX didn’t participate in last month’s auction, probably not liking some its terms, such as keeping WMEX at its current transmitter site in Waltham. The lease there reportedly costs $12,000 – a big nut. Ed Perry’s Marshfield Broadcasting is paying $125,000 for the WMEX license and its equipment, and will likely relocate it around his South Shore WATD-FM Marshfield/95.9. As currently licensed, WMEX runs 50,000 watts full-time, but with three different directional patterns. Those are for most of the daytime, the “critical hours” after sunrise and before sunset, and nights. Seller Daly XXL Communications has taken WMEX dark, pending its sale. Perry’s paying the $125,000 in cash.
Canada’s Rogers Radio buys a second FM in Medicine Hat, Alberta, and ironically it’s one that signed on the same year as Rogers’ existing station there – 2008. Clear Sky Radio is selling “Classic Hits 102.1” CJCY, a Class B, into a duopoly with Rogers’ own “105.3 Rock” CKMH. Seller Clear Sky still has “Classic Hits 94.1” CJOC in Lethbridge, Alberta plus a station in Cranbrook, British Columbia. Adding CJCY brings Rogers up to 14 stations in Alberta – and 55 country-wide. CJCY shares the news here. Publicly-traded Rogers Media, also a player in wireless, broadband, cable, television, publishing and more, lists its stock on the Toronto Exchange as “RCI.A” and RCI.B,” and on the New York Stock Exchange as “RCI.”
“Most Intriguing Stations of 2017” for Sean Ross includes those in the new wave of alternative stations (even on translators, he says). Also in “Classic Soul,” says as “Radio One’s launches in Cincinnati, Detroit and ‘Classix 102.9’ in Atlanta.” Ross is also thinking that “the ’90s might not be as weak as thought.” (Disclosure - Sean’s working with ’90s-based “The Beat” in Janesville, Wisconsin.) Ross also says healthy times for hip-hop, now expanding in medium markets where it hadn’t been available (Binghamton’s “Hot 102.9,” Reading’s “Loud 99.3” and Rochester’s “105.5 the Beat”). Get Sean’s perspective on “Most Intriguing Stations” from his Megatrax-hosted column here.
Working the night shift – Delta Radio principal Larry Fuss has his own “patched-in to the competition” memory, a la yesterday’s story about two Chicago jocks - “When I was a wee lad doing overnights at WNEX in Macon, Georgia, I too received one of those phone calls where somebody patched me and the overnight guy at WBML together. We had a pleasant chat, and then it happened again the next night. Only that night, whoever was setting up the call had added WMAZ to the mix. After several days, we found out it was the bored night manager at the Macon Hilton, who used the hotel switchboard to make the conference calls. After several more nights of such calls, he had added WDEN and WPGA to the call as well. With all five of us on the line, we decided it would be cool if we all played the same song at the same time. Because WDEN was country, we had to pick a song they could play too, so we settled on ‘Rhinestone Cowboy’ by Glen Campbell. So anybody punching around the radio dial at 5:45am in Macon, Georgia on that morning heard Glen Campbell playing on five different radio stations.” What’s your own favorite true radio story, whether it’s about cooperation or competition? Email “You Can’t Make This Up” – Tom@RTK-Media.com.
How high were the Holiday-book PPM shares of all-Christmas stations? We start finding out next Tuesday, with Nielsen’s release of the Holiday-book markets. You’ll be seeing the Futuri Media-sponsored “Same Day Ratings Email” at 5pm Eastern time next Tuesday through Friday, if you’re signed up. (Day 1 would usually arrive on a Monday, but Nielsen pushes the schedule back because of this week’s Martin Luther King Jr. Day.) If you’re not signed for these emails, fix that at the bottom of today’s NOW Newsletter, under “Email Options/Update Subscriptions.”
Want to reach the readers of this NOW Newsletter, with your company’s marketing message? Or need to reach potential job candidates, with a Classified ad? Talk to our Kristy Scott. Reach her at Kristy@RTK-media.com or phone 818-591-6815. See you back first thing Monday morning - Tom