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Cumulus Media, Inc. is a broadcasting company of the United States and is the second largest owner and operator of AM broadcasting and FM broadcasting radio stations in the United States ahead of Audacy and behind iHeartMedia. As of June 2019, Cumulus lists ownership of 428 stations in 87 . It also owns and operates Westwood One. Its headquarters are located in Atlanta, Georgia. Its subsidiaries include Cumulus Broadcasting LLC, Cumulus Licensing LLC and Broadcast Software International Inc.
The next significant milestone was obtaining a $50 million investment from the State of Wisconsin Investment Board (SWIB), which previously invested in Weening's magazine publishing company. With this capital in place, Cumulus began full-scale operations on May 22, 1997. Weening assumed the role of Executive chairman focusing on acquisitions deal structuring, corporate finance, and internet from the company's original headquarters in Milwaukee, Wisconsin. Dickey selected stations to buy and oversaw radio programming, operations and strategy as Executive vice-chairman. Dickey brought in highly regarded radio operator William Bungeroth to serve as President of Cumulus Broadcasting from new offices in Chicago's Hancock Center. Having a reputation as an advertising sales leader, Bungeroth oversaw market-level tactical execution, including the integration of newly acquired stations into market operating units. John Dickey, brother of Lewis and himself an experienced radio programming consultant. would oversee station content.
SWIB's investment was soon followed by another $50 million from Wisconsin-based Northwestern Mutual Life Insurance Company and $25 million from NationsBank Capital Corporation. With this financial backing secured, Dickey and Weening began acquiring radio stations yet managed to stay "under the radar", not attracting much notice or competition. In its first 12 months in operation, Cumulus acquired over 100 stations in 31 markets. Soon it was clear that the company would need over a billion dollars for its desired acquisitions, and an initial public offering of stock was soon made.
The Cumulus strategy, as articulated in public filings, was to acquire multiple stations in a city or market, consolidate them physically to share a common infrastructure to reduce operating expenses but enrich programming. Each station would be programmed with a unique music format, live programming, brand, and target audience. The central idea was to create a cluster of radio stations that could compete with newspapers by offering advertisers a range of target demographic choices comparable to the range of content sections in print. At the time of Cumulus' founding, newspaper display and classified advertising claimed the largest share of local advertising dollars. By offering a range of audiences like newspapers, Cumulus could gain a greater share of the local advertising dollar than the individual stations could garner separately. In addition, acquiring the top-performing stations in a given market as part of the operating cluster would yield more national advertising. The market focus would be on those deemed to offer substantial growth opportunities, while the station focus was the leading station in the market and other stations well-positioned for significant growth.
For 1998, Cumulus reported revenue of $98.8 million, with broadcast cash flow of $26.6 million. Its cash-flow margin reached 27 percent. For 1999, Cumulus reported $180 million in revenue and $46.7 million broadcast cash flow.
On November 19, 1999, Cumulus sold an additional 10 million shares at $24.93, raising $250 million. Acquisitions continued at an accelerating pace. At this point, the company owned or operated pending closing 246 stations in 45 markets. In a period of two years and six months, Cumulus became the second largest U.S. broadcasting group in terms of stations operated. It also raised a staggering $1.3 billion when considering sales of common and preferred stock shares, senior bank lines of credit, and senior subordinated debt or junk bonds which when issued were rated CCC+.
The stock market acknowledged the remarkable growth with a share price that rose to a high of $51.00 on December 31, 1999.
The first quarter of 2000 proved to be troubling at Cumulus. A perfect storm of events drove the company's share price from $50 to $13 between January 1 and March 17 when over 30 million shares traded hands. Driving the decline was persistent rumours of possible accounting irregularities in the rapidly assembled radio group. On January 14 respected Wall Street analyst Frank Bodenchak advised institutional clients that Cumulus may miss his estimates for Q4 1999 and the year. A combination of the possible earnings miss and the rumours of accounting problems created a significant loss of investor confidence.
On March 17, Cumulus reported a loss of $0.20 per share vs $0.15 per share expectation. Broadcast cash flow was $12.3 million vs estimates around $17 million. In addition the Company reported that company CFO Rick Bonick had left earlier in January. It was not officially announced a fact that CNN Money says "roiled the already active rumour mill about accounting irregularities. The company also reported it would restate quarterly revenues in 1999 as some markets did not comply with Cumulus' revenue recognition policies and booked some advertising contracts for their full value rather than recognizing revenue as the ads aired. As a result, class-action lawsuits were filed against Cumulus charging the company with artificially inflating revenue and profit in 1999. PricewaterhouseCoopers, the company's auditors resigned in April citing material weaknesses in the Cumulus' financial controls arising from the possible revenue restatements.
Meanwhile, Dickey had taken over day-to-day station operations from Bungeroth who resigned in mid January.
During this same period Weening got into a dispute with the SEC over his proposal to reverse some of his and Dickey's 1999 compensation to help offset the earnings miss. While the proposal was never implemented, the SEC maintained it would have amounted to earnings management and was therefore an infraction. Weening finally agreed to pay a fine of $75,000 without conceding wrongdoing to settle the matter in 2003.
As the dust began to settle in April 2000 the company issued revised annual 10K reports for 1998 and 1999 that showed minor variations in quarterly revenue and adjusted net loss for 1999 from $20.8 million to $13.6 million and net loss for 1998 was restated from $13.7 million to $8 million, after the company found a $4.9 million tax benefit that had been under-reported. The restatement as it turns out had no material impact on the financials but in the context of the dot-com bust hysteria rumours of accounting irregularities drove a significant decrease in share price which threatened the company's ability to finance pending acquisitions.
The new CEO of Cumulus Media, as of September 2015 is Mary G Berner.
In April 2016, Talk Radio Network filed a lawsuit against Cumulus Media and associated defendants, alleging "Competition law violations, unfair competition, breach of contract and breach of fiduciary duty, among other claims", similar to a lawsuit launched in 2012 and dropped in 2014 by the same plaintiff. In June 2016, Cumulus Media and Westwood One moved to have the new suit dismissed.
In June 2016, Cumulus Media announced the resignation of its executive vice president, treasurer and chief financial officer, Joseph P. Hannan, to "pursue other interests" after six years with the company, to be replaced by John F. Abbot. It had previously been reported in April 2016 that Cumulus was "going to great lengths to keep two of its executives on board" and that Hannan had been offered "a big bonus to stay" as incentive to remain with the company. In October 2016, it was announced Hannan had taken the role of chief financial officer at programmatic advertising company, Social Reality, Inc. NASDAQ:. Per SEC filings, Hannan would also "assist the company for several months to ensure a smooth transition". Noble Financial Analyst Michael Kupinski was reported to say that the resignation of CFO JP Hannan for John Abbot was "not a good sign" for the company and as a result of the change, a restructuring was likely.
In 2006, Cumulus acquired control of Susquehanna Radio, with the backing of 3 venture capital firms (Bain Capital, The Blackstone Group and Thomas H. Lee Partners, L.P.) for a price of $1.2 Billion. The 33 Susquehanna stations were privately held in a separate partnership called Cumulus Media Partners, LLC (commonly referred to as CMP on the company's quarterly earnings calls) that was the subject of an equity-for-debt swap in May 2009 in an attempt to avoid defaulting on the terms of the CMP lending agreement. While Cumulus operated the CMP stations, they initially held only a minor ownership interest in them. On January 31, 2011, Cumulus announced a deal to acquire the remaining ownership of CMP from its equity partners in a stock transaction valued at approximately $740 million that is closed in August 2011. As a result of the CMP acquisition, Cumulus now owns a limited-partnership interest in San Francisco Baseball Associates LP, the owner of the San Francisco Giants baseball club.Cumulus Media, Inc. (December 31, 2012). "Notes to consolidated financial statements". Annual report to the Securities and Exchange Commission on Form 10-K. p. F-14.
In July 2010, Cumulus publicly announced formation of a similar venture with Crestview Partners to acquire up to $1 billion of additional radio assets.
In July 2007, the company announced its intention to "go private", however on May 11, 2008, the company announced it was unable to come to terms with the parties involved and the merger/acquisition agreement was terminated.
Like most major American radio station owners, Cumulus has been forced to write down the value of its radio station licenses, resulting in large non-cash losses – $498.9 million in 2008, $230.6 million in 2007, and $63.4 million in 2006.
The company's stock, priced over $56 in 1999, then over $22 in 2004, was as low as $0.45 per share toward the end of 2008.
On August 29, 2013, it was reported by The Wall Street Journal that Cumulus would purchase the syndicator Dial Global for $260 million. To fund the sale, Cumulus, sold 53 more stations to Townsquare Media for $238 million, in markets such as Danbury, CT, Rockford, IL, Cedar Rapids, IA, Quad Cities, Waterloo, IA, Portland, ME, Battle Creek, MI, Kalamazoo, MI, Lansing, MI, Faribault, MN, Rochester, MN, and Portsmouth, NH. Additionally, Townsquare Media acquired Peak Broadcasting, and Cumulus swapped 15 more stations in Dubuque, IA and Poughkeepsie, NY in exchange for Peak Broadcasting's Fresno cluster. The sale to Cumulus was completed on November 14, 2013.
In July 2014, Cumulus announced that it would end its partnership with ABC News Radio, and enter into a new partnership with CNN to syndicate news content for its stations through Westwood One beginning in 2015. The network will provide its content on a white label basis, allowing individual stations to use their own brands for the content. In turn, ABC announced that it would take the syndication of its radio content in-house, with distribution handled by Skyview Networks.
On September 15, 2013, Cumulus announced that it had entered into a partnership with music streaming service Rdio; Cumulus took a stake in Rdio, and provided the company with access to its advertising sales team for a freemium tier, the ability to offer Cumulus radio stations on the Rdio service, and $75 million in marketing on Cumulus stations over five years. The stations launched on Rdio in August 2015; prior to the deal, Cumulus partnered with the competing iHeartRadio service. However, in November 2015, Rdio filed for bankruptcy and sold its assets to Pandora Radio.
On May 9, 2023, former News/Talk 98.9 WKIM Memphis morning show co-host Bob Boccia, who has Crohn's disease, sued Cumulus Media after failing to accommodate his medical condition and religious beliefs. His suit details violations of the Americans with Disabilities Act and Title VII of the Civil Rights Act of 1964, as well as breach of contract. He is the first former Cumulus employee to sue the company for its vaccine mandate. On December 1, 2023, former 107.5 The Game in South Carolina sports talk radio host Tim Hill filed a civil rights lawsuit against Cumulus for firing him back in 2021 over their vaccine mandate. Hill is claiming a violation of Title VII of the Civil Rights Act of 1964, making him the second former Cumulus host to sue the company over this vaccine mandate.
On April 3, 2024, it was reported by InsiderRadio.com that CEO Mary Berner would likely be on the witness list in a suit against Cumulus Media over their vaccine mandate. Chief Human Resources Officer Todd McCarty would have also been on the witness list because he is the one who denied Hill’s request for a religious accommodation. McCarty denied all exemptions. In June 2024, McCarty stepped down from his position.
In January 2016, the Federal Communications Commission's Enforcement Bureau reached a "record-setting" $540,000 settlement with Cumulus over sponsorship identification in radio ads promoting a proposed energy project, reported to be the largest payment in FCC history for a single-station violation of the Commission's sponsorship ID laws. In August 2019, the FCC proposed Cumulus Media pay another $233,000 fine for additional violations of its sponsorship identification rules and not reporting them to the FCC after agreeing to do so under its 2016 consent decree.
On November 8, 2005, the company decided to amend and restate its results for the second quarter of 2005.
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