Entercom Walks From Traffic Deal

Entercom Communications Corp. announced Monday that its reseller agreement with United States Traffic Network has ended.

According to a press release, Entercom has successfully sold traffic and other short duration advertising on its own for many years. In April, Entercom took back a portion of its broadcast inventory from USTN and is achieving great success selling that inventory through its own sales channels. The Company expects to build on that success as it begins to monetize the remaining inventory taken back from USTN.

“We are relieved to no longer be mired by the difficult USTN situation that was inherited as part of the CBS Radio merger. We will move quickly to augment our strong internal sales organization to ensure that we realize the full value of this inventory,” stated David Field, President and CEO, Entercom. “With leading news brands like 1010 WINS in New York, KNX in Los Angeles, and WBBM in Chicago, Entercom has the industry’s most valuable traffic inventory and we are pleased to be in control of our own destiny as we pursue opportunities in this attractive market segment.”

The Company also noted that USTN filed a related lawsuit against Entercom on Friday. Entercom believes the lawsuit is entirely baseless, frivolous and frankly insulting. Entercom has worked tirelessly and constructively with USTN over the past six months to help USTN work through its significant financial issues. Entercom is owed substantial amounts of money by USTN (reportedly $4M), and the Company intends to defend itself vigorously and assert all of its rights.

USTN says its products are currently used by over 1100 radio and television outlets. The company's traffic solutions and in-house traffic gathering staff analyze real-time data from more than one hundred sources including road sensors, traffic cameras, and official accident and incident reports to help drivers save time and fuel.

During a conference call with employees Monday night USTN CEO Ivan Shulman said this was a classic case of David vs. Goliath and all about bad corporate behavior, RadioInk reports

Just a few months ago, it appeared as if Entercom had come along to save the day for United States Traffic Network when it took an equity position in USTN. In a May 3 USTN press release, Entercom CEO David Field stated: “We are pleased to announce our new partnership with USTN. Their new management team has moved quickly to fix their issues and establish a solid business model following the company’s separation from its former corporate parent. We look forward to participating in their future growth as they capitalize on the significant opportunities in this attractive market segment.”

In a lawsuit filed last week USTN says it entered into good faith negotiations with Entercom to facilitate a sale, and Entercom “fraudulently stole data to create a competitive company.”