Cumulus Media

History

Origins

Cumulus Media was established in August 1998 by radio consultant Lewis Dickey Jr. and media and technology entrepreneur Richard Weening. The Telecommunications Act of 1996, among other legislation, relaxed media ownership restrictions, allowing a single owner to possess or control an unprecedented number of radio stations per market and nationwide. Dickey, then a nationally known radio programming consultant, was acting as a consultant to a small radio group in which Weening had a personal investment. Weening signed onto Dickey's idea to acquire and operate radio stations in mid-size markets as opposed to the largest markets on which competing radio group Clear Channel Communications was focusing. Dickey was the radio expert and Weening was the corporate finance and start-up CEO. Dickey was president of both radio consulting firm Stratford Research and his family company, Midwestern Broadcasting, with two stations in Toledo, Ohio; these stations would later be acquired by Cumulus. Weening had successful experience as a start-up CEO in book and magazine publishing, online services and enterprise software systems. He was then CEO of Quaestus & Co., Inc., a private equity firm specializing in media and technology startups. For the new radio company, Weening chose the name Cumulus for the type of cloud formation for their ubiquity in the sky, which Weening and Dickey hoped would be the same for their stations across the country. Quaestus provided the seed capital to make the first station acquisitions as a model for the Cumulus business strategy.

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.

Initial public offering and accelerating acquisitions

Cumulus became a publicly traded company on June 26, 1998. The company raised $400 million selling 7.6 million common shares at $14.00 each, $125 million in preferred stock, and $160 million in Senior Subordinated Bonds. At that time Cumulus owned or was committed to buy 176 stations – 124 FM stations and 52 am stations in 34 U.S. markets. In its first 17 months, Cumulus acquired 207 stations, creating the first mid-size market radio conglomerate. Following the company's IPO, its stock fell from $14 to $8 per share on October 2, 1998, before beginning a climb to close 1999 at $50.75. Some radio executives familiar with small markets thought that Cumulus was overpaying to buy top stations in markets that did not have a great upside potential.

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.

Since November 1998, the company had been developing an internet platform for classified employment advertising. The new system would operate in tandem with the radio station cluster in each market and offer employers the chance to post available positions on the web and promote their company and the position on the radio stations. At the time of the dot-com bust, the system was in beta test in two markets. One of the short-lived but important impacts of the dot-com bubble burst was a loss of confidence that the promise of the internet would ever happen. Many professional radio people like Dickey were skeptical and believed the best course for Cumulus was to focus on the radio strategy and drop the internet projects. Weening who had started a Silicon Valley e-commerce software company in the early 1990s had conceived and was overseeing development of the employment platform. Weening advocated for continuance of the project as a key potential source of revenue with a service that would be unique among radio companies. Ultimately, the board backed Dickey not Weening and the Internet project was scrapped.

2010s

Starting in June 2010, Cumulus made multiple unsuccessful offers to buy out Citadel Broadcasting after its emergence from bankruptcy. In February 2011, Cumulus was again said to be in "exclusive negotiations" to acquire Citadel for $2.5 billion paid to Citadel shareholders; some shareholders were said to have been pushing the board to consider a sale. On March 10, 2011, Citadel announced that it had agreed to be sold to Cumulus for $2.4 billion, including 225 stations and the Citadel Media radio network

Broadcasting stations announced via email that Cumulus had purchased Citadel Broadcasting. Citadel was made up of 225 radio stations in over 50 markets, as well as Citadel Media, one of the largest radio networks in the United States; it included the stations that made up the former ABC Radio group (like flagship stations KABC-AM, WLS-AM and WABC-AM). The deal was finalized on September 16, 2011, after approval by the FCC and Citadel's shareholders. Cumulus Media placed 14 stations into a separate trust to comply with ownership limits. Following the acquisition, in an effort to focus on larger markets, Cumulus reached a deal with Townsquare Media to swap 65 radio stations in 13 markets, with the majority of the 65 stations being sold to Townsquare.

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. 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. Ahead of the completion of the sale, Dial Global adopted the heritage Westwood One branding.

On January 11, 2013, after acquiring the station from Family Radio, Cumulus re-launched WFME in New York City as a country music station under its new Nash FM brand. Nash was designed to serve as an umbrella brand for all country music-related content across the company's properties, including radio, digital, and live events such as the "Nash Bash". All country stations owned by Cumulus would either be branded as Nash FM, or be strongly cross-promoted as part of the Nash family of properties.

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 News beginning in 2015. The network would 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.

2020s

In August 2020, Cumulus disclosed that it had sold its tower sites to Vertical Bridge for $213 million in a sale and leaseback agreement. On January 6, 2021, in response to attempts to overturn the 2020 United States presidential election and the U.S. Capitol attack, Cumulus Media executives directed its on-air personalities to stop spreading misinformation about unsubstantiated claims of Biden stealing the election or face termination.

In August 2021, Cumulus adopted a COVID-19 vaccine mandate for all employees; this resulted in the dismissal or resignation of a number of employees in October 2021. That month, Dan Bongino (who launched an afternoon show with Westwood One to replace The Rush Limbaugh Show on Cumulus stations) threatened to leave the company over the mandate on behalf of the rank and file staff impacted, saying "you can have me or you can have the mandate. But you can't have both of us." Cumulus declined to comment. A spokesperson for Bongino stated that he had received a COVID-19 vaccine upon the advice of his doctors due to his Hodgkin lymphoma—which Bongino would also confirm in an interview with The New Yorker in December 2021. In December 2022, Bongino announced he would not renew his contract when it expires in 2024, but later reversed course and signed a multi-year renewal with Westwood One the following year. He would leave the company in February 2025 after accepting a nomination to become deputy director of the FBI.

On February 15, 2023, Cumulus Media paid "$1 million to settle a lawsuit filed by seven former employees who said the fee practices and investment selections of the company's 401(k) plan violated [the Employee Retirement Income Security Act]." In June 2023, Cumulus sold WDRQ in Detroit to Family Life Radio.

On May 9, 2023, former WKIM morning co-host Bob Boccia sued Cumulus over its COVID-19 vaccine mandate, accusing the company of violating the Americans with Disabilities Act and Title VII of the Civil Rights Act of 1964 by failing to accommodate his Crohn's disease and religious beliefs. On December 1, 2023, former WNKT host Tim Hill filed a similar lawsuit. Hill's case was settled in December 2024 without going to trial, while Boccia's case was tossed after he abruptly refused to communicate with his lawyers or the court.

In August 2023, Cumulus-owned Susquehanna Radio sued two former employees of KTCK, Dan McDowell and Jake Kemp, seeking to impose a temporary restraining order (TRO) on them after they refused to comply with a cease and desist order, in which the company claimed that production of The Dumb Zone podcast by the two former radio hosts violated the noncompete agreements in their contracts barring them from competing with their former employer. In September 2023, the case was resolved after US District Judge Karen Gren Scholer ruled that Susquehanna had failed to meet the "burden of persuasion" to have a TRO granted, and the podcast was allowed to resume production.

Leadership

Current

Board of directors

Executive leadership