Monday, June 27, 2011

I Have To Hand It To Lew

The mention of his name evokes strong emotions.  His company has become the poster child for everything wrong with corporate radio.  Lew Dickey and Cumulus Media are lightening rods in the presence of radio people.

Lew Dickey and Cumulus are known professionally for taking economizing to new lows; while taking voice tracking, sales commission cutting and vindictiveness to new highs.  They also have a reputation of questionable treatment of their staffs, though I know senior Cumulus employees in 2 markets and with Corporate who love working there.  Cumulus has been a blessing to one company, Clear Channel Radio, grabbing the spotlight from the broadcaster that used to be the most hated.

Lew Dickey is also legendary on a personal level.  As people drive by his huge house--make that compound--in Buckhead, they are reminded of the time he told his fiance, former news anchor Kimberly Kennedy, that he changed his mind about getting married, at the rehearsal dinner with both families present.  Lew is known for his finely-tailored suits and impeccably combed hair as well as his continuous array of girlfriends, all of SI Swimsuit caliber.

All of that notwithstanding, I have to hand it to Lew.  He has pulled off some business moves that I would never have thought possible.  In 2000, Cumulus, then a small and medium market broadcast company, was close to going belly up.  Lew Dickey became CEO and quickly made some shrewd deals that saved the company.

In 2005, the smart money was on an employee group headed by Susquehanna President/CEO David Kennedy to win the Susquehanna Radio auction.  The leading bid was just under $1 billion.  Then Cumulus, hand-in-hand with Bain Capital, Blackstone Group and Thomas H. Lee Partners, pushed the bidding to $1.4 billion.  Ego driven or not, that bid was the winning one, and Susquehanna was acquired by the new Cumulus Media Partners, to be run by Cumulus.

Many feel Cumulus has turned the former Susquehanna stations, thought to be radio's cream of the crop, from a Lexus into a Yugo.  Taking on such immense debt resulted in the initial bloodbath that accompanies most acquisitions, and forced Cumulus "not to breathe" in their operation of the properties.

Noted radio columnist Jerry Del Colliano foresaw doom and gloom at Cumulus Media.  The company, voted worst place in radio to work in his poll, would not be able to service its debt, he predicted.  When Cumulus announced equity funding from Crestview Partners to acquire stations last year, Del Colliano said it was smoke and mirrors driven by Lew Dickey's considerable ego.

I respect Jerry Del Colliano and know his opinions were based on solid fact.  Yet in March, 2011 came the surprise of surprises.  Cumulus agreed to acquire Citadel, the company that turned the former high-performing ABC-owned stations into its own little Yugo.  While the acquisition will substantially increase Cumulus' debt, that debt will be a smaller percentage of total assets than now.  Lew Dickey had pulled the proverbial rabbit out of a hat...again.

With Citadel under its wing, Cumulus will gain 2 more big FM signals in Atlanta, Kicks 101-5 (WKHX-FM) and Atlanta's Greatest Hits 106.7 (WYAY-FM).  As mentioned here recently, Atlanta FM licenses are to kill for.

Over the past 2 years, Cumulus Media has launched 3 additional FM signals in the Atlanta market.  These are not full-power FM's, mind you, but stations that fill the inside of the Perimeter with primary-grade signals.  Aside from Radio One, which obtained an FM translator by settling a lawsuit, Cumulus is the only radio company that had the wherewithal to increase its Atlanta FM signal stock in this imaginative way.  Once again, Lew Dickey's business acumen--and that of his staff--win the day.

One of the translators, 93.7, is now owned by Cumulus Media's alter ego, Dickey Broadcasting, and is used to simulcast 680 The Fan.

FM translators are a creative means of getting FM signals in market number 7.  But can translators really compete for ratings and revenue in Atlanta?  We'll discuss that in the next Atlanta Airwave Action, which will appear in 2 weeks.

Thanks for reading.  Have a safe and enjoyable July 4th holiday.  I would love to hear from you at roddyfreeman@bellsouth.net.  Follow us on Twitter at http://www.twitter.com/atlantaairwaves, and we'll follow you back.

Link to Rodney Ho's AJC Radio & TV Blog: http://blogs.ajc.com/radio-tv-talk/

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