Ten Tactics for Cumulus Survival

Lew is out.  John is out.  McVay has been moved.  All the bogie men at Cumulus have been moved off the table.  Now what?  MaryCumulusPower Berner, the new CEO is challenged.  And it raises the question…What would YOU do to fix a billion dollar a year radio company?

  • Restructure –  Cumulus needs to be in control of their cash and restructuring is the only way for that to happen.  It doesn’t have to be banko…but Cumulus has no chance unless the pressure to service their debt is reduced.  Speculation is a 70% haircut with the junior debt would put the valuation in line with what the group is really worth.  So get it over with.
  • Patience – make sure the remaining stake holders are patent. This is a business with inertia in BOTH ways.  When I took over KJR in the 80s the previous year the station had done almost $3M and the year I arrived billing topped out at $750,000.  The reputation and legacy of a station only lasts so long…and the rebuilding ramp is slower than it once was because buyers have so many other media options.

This is a 3 to 5 year rebuild process.  Look at Marissa Meyers at Yahoo…she’s almost 4 years into her turnaround and          she’s in the sexy hot digital media space. It will take time.

  • Leadership – Mary Berner has to remember that leaders only have one asset.  FOLLOWERS.   To rebuild faith she needs followers from a staff that has been terrified, beat up, intimidated and run out of the building.  She needs to develop a passionate articulated vision. Emerson said,  “ I need someone to make me do what I am capable of…”   Berner needs to be that person…
  • Clean House – Let’s face it…no one has really voluntarily chosen to work for Cumulus in a long time. The current staff is 80% people who needed a job no matter what, 10% are hanging on and staying under the radar and 10% are really good and passionate and optimistic about the future. With thousands of employees cleaning house is tough.  But here’s what’s going to happen…when Mary creates a vision of passion and focus, good radio people will come out of the woodwork and be ready to replace the dead wood.  Be ready to take advantage of that emerging resource.
  • Last year I was talking to one of Cumulus’ major program directors and asking about commercial loads in the industry. He suddenly turned to me and said, “Our core Cumulus station inventory is just the start!  Then corporate adds on barter, network, and JV spots!  We have no control over inventory at all!”  Listening to any Cumulus station will verify that…

So as hard as it is – clean up the spot load on all the stations and stop thinking of your news/talk stations as dumping          grounds for spots.

  • Core Value – understand that Cumulus’ core value is their local relationships with local retailers and ad agencies in each market. Turning those relationships into money with radio, digital and other NTR is the core job of the company…not just being a radio company.
  • Forget the AM’s. Sad as it is for those of us who love the great stations – WLS, WABC, KABC and KGO these stations have been destroyed and have NO chance of coming back.  To paraphrase a local client “(Insert call letters here)  – everyone knows you; but no one listens anymore…”

Name one AM station that has been turnaround in the past decade.  Just one.  I can’t.  The audience levels,             perception and capital requirements are so poor that maintenance is all you can do right now even with those legendary calls.

  • Don’t ignore digital – focus on how your digital assets can complement broadcast stations – something I’m sure Cumulus is already doing. And I’m totally confused on what they did to Rdio.  The past couple of years they generated millions in revenue (though it’s unclear how profitable that was) but Cumulus has abandon their deal with them though their 10K said they continue to have a ‘relationship’.  Is that like your ex-wife…?
  • Rebrand – Cumulus carries too much baggage.  There isn’t enough lipstick in the world to make Cumulus attractive to anyone who knows the history.  Return to Citadel or rebrand as Westwood One. If Gannet can do it…oh, wait.  Tegna Company was NOT an improvement…but you get the idea…
  • Apologize – apologize for being a company that was based on the wrong metrics. A company that valued data over people…stock price over good local radio…and thin staffing with no passion.  Apologize with NO caveats…don’t throw the Dickey’s under the bus.  They got there themselves.  Just say you are so sorry to the stakeholders…to the employees…to the industry and to the ad community.  But only do it if you are sincere.

The radio business is troubled…and the two largest operators are against the wall.  iHeart has been much better run…and agree or not with their strategy, they have been innovative…and good for radio.  Cumulus has been an unmitigated disaster…and everyone has seen this train wreck coming for several years.

And finally – what are you doing at your station that is identical to Cumulus’ errors?  What hubris…what arrogance…what assumptions are you operating under that will lead to disaster in your business…?  I’m checking under my bed…

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