Readers: Expect a long slog for Cumulus
Many buyers think CEO Mary Berner will rebuild the troubled radio giant
April 13, 2016
By the editors of Media Life
This is one in a number of stories on radio in Media Life’s ongoing series “The new face of radio in America,” examining all the changes taking place in the medium. Click here for earlier stories.
New Cumulus CEO Mary Berner has a huge challenge in front of her: Rebuilding the nation’s No. 2 radio company.
A respected magazine executive, Berner took over Cumulus last fall at a critical time. The stock had tumbled among rising doubts as to whether the debt-ridden company could hold itself together.
The question then was not whether Berner could turn Cumulus around but whether she had the time.
All these months later, more media buyers than not believe Berner can indeed rebuild Cumulus. But many think it will take a lot of time and will probably include taking the company through bankruptcy, as she did with Reader’s Digest when she led the long-troubled publishing giant.
That’s according to a recent Media Life survey on the state of big radio.
Asked what the future held for Cumulus, the largest share of readers by far, 48 percent, agreed with this statement: “Berner will prove a capable leader but will be forced to take the company through bankruptcy. It will be a lengthy turnaround.”
As one reader put it, “The fate of the company as a whole will continue to see slow sales erosion while still trying to reduce overall debt. Most likely Mary Berner will seek Chapter 11 as she did with Reader’s Digest.”
Writes another: “The Dickies destroyed so many heritage stations, the amount of work to bring it back is daunting,” the Dickies referring to former CEO Lew Dickey and brother John, who oversaw programming and operations. The Dickeys were ousted last September.
Just 12 percent thought Berner would manage a turnaround without bankruptcy, agreeing with this statement: “New CEO Mary Berner will guide the company through these rough waters and turn it into a hugely successful radio company.”
The second largest share, 39 percent, don’t think Berner can turn Cumulus around, with 14 percent believing that creditors will force a change in management and 25 percent believing Cumulus will be broken up and sold off.
Overall, readers hold out more hope for Cumulus than they do for iHeartMedia, the No.1 radio company, which carries a debt load of $21 billion and continues to lose money following a disastrous leveraged buyout a few years back.
Asked which big radio company faced the grimmest future, 51 percent of readers chose iHeartMedia, versus 29 percent for Cumulus and 11 percent for CBS Radio, which is now on the block.
The sense of readers overall is that the era of big radio, brought about by deregulation in the 1990s, is coming to an end and that radio’s future will be led by smaller, better-managed companies with a focus on serving local markets.
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