Cumulus Media Inc. Wednesday announced that it has entered into an agreement to sell six radio stations to Educational Media Foundation for $103.5 million in cash. Cumulus also announced that it has entered into a swap agreement with Entercom Communications Corp. under which Cumulus will obtain three stations in Indianapolis, lifting Cumulus into the leading ratings position in that market, in exchange for three Cumulus stations in two markets.
Mary G. Berner, President and Chief Executive Officer of Cumulus Media, said, “These transactions are consistent with our portfolio optimization strategy and both deals are accretive. The Entercom swap significantly bolsters our competitive position in Indianapolis and the EMF transaction generates substantial cash for debt repayment and investment in other business opportunities.”
Each party will commence a local marketing agreement to program the other party's stations beginning March 1 and pending FCC approval the transactions are expected to close this spring.
In New York City: Entercom Communications will acquire Country WNSH NASH 94.7 FM 94.7.
Entercom’s portfolio currently includes All-News 1010 WINS and Sports WFAN 660 AM / 101.9 FM, as well as Classic Hits WCBS 101.1 FM, News WCBS 880 AM, Alternative WNYL 92.3 FM and Hot AC WNEW 102.7 FM.
Entercom will also add two stations in Springfield, Mass. from Cumulus Media Inc. in exchange for its three-station cluster in Indianapolis. Entercom stations in Indianapolis are AC WNTR 107.9 FM, CHR WZPL 99.5 FM and Sports WXNT 1430 AM.
“We are excited to add NASH FM 94.7 to our outstanding lineup in New York City and to add WMAS and WHLL to our cluster in Springfield. These additions will enhance our ability to serve our listeners, partners and communities,” said David Field, Chairman, President and Chief Executive Officer of Entercom. “We are saddened to part ways with our colleagues in Indianapolis, but know that they will be in great hands.”
EMF's acquisition means format changes for all these stations. HotAC WPLJ 95.5 FM in New York, Talk WYAY 106.7FM, HotAC WRQX 107.3 FM in Washington, DC, Alternative KFFG 97.7 in San Jose (which simulcasts Cumulus' KFOG in San Francisco), Classic Rock WXTL 105.9 FM in Syracuse, NY and Hot AC WZAT 102.1 in Savannah, GA.
"We are thrilled to add these stations to the K-LOVE network and for the opportunity to continue to bring people closer to Jesus," said Alan Mason, EMF president and interim CEO, in a statement. "Our mission is to create compelling media that inspires and encourages listeners to have a meaningful relationship with Christ. These are legendary stations that will enable us to enter new markets in Washington, D.C., Atlanta, Savannah and Syracuse and expand our footprint in New York."
In Atlanta, EMF's K-Love will have a stronger signal that Salem Media's WFSH Fish 104.7.
With these new stations, the format juggernaut will soon be on a whopping 565 stations nationwide.
Under the terms of the agreement with EMF, the Christian Radio Broadcaster will acquire all transmission equipment and assume all tower leases associated with the stations which collectively contribute approximately $5 to $7 million of EBITDA to Cumulus annually.
Cumulus will retain the intellectual property of all six stations it is selling to EMF.
Berner used yesterday’s nine-minute appearance to address the rumors the twin transactions will likely spark. “I’ll cut to the chase and answer some questions,” Berner said before attempting to “put to rest the inevitable speculation.”
- Rumor No.1: Cumulus is selling because the company isn’t doing well. “Not at all,” Berner said, gesturing emphatically, noting that Cumulus is meeting or surpassing all of its financial goals and expects to hit all of its financial targets in 2018 once the books are closed. Digital revenues are up 45%.
- Rumor No. 2: Cumulus plans to exit all of it big markets. “Absolutely not,” she insisted. The stations involved in yesterday’s portfolio moves “were specific to this particular opportunity.” Besides, Cumulus shelled out $18 million while in bankruptcy to buy WKQX Chicago, Berner reminded employees, to strengthen its position in radio’s third largest market.
- Rumor No. 3: Cumulus is getting out of the “Nash” country format business. “No!” Berner asserted. While two of the stations being divested are Nash outlets, both “were driven by the particular opportunity with Entercom. It had nothing to do with the fact that those stations had Nash brands.”