3-19-2012
Cumulus CEO Lew Dickey told investors and analysts Monday morning that the company has had its hands full with integration, turnaround and developing new growth initiatives, all which should pay dividends in 2014. The integration had to do with Citadel and CMP which took Cumulus from 330 stations in 57 markets to 570 stations in 120 markets. The turnaround of Citadel included the hiring of 100 new salespeople, over 50 new managers and focusing on 10 stations that are being blamed for the revenue issues Cumulus is having. And the growth initiatives including making investments in new verticals such as Sports (with CBS radio), traffic, SweetJack and now NASH-FM in New York City.
Those 10 major market news/talk stations are still a revenue drag on the company that Dickey says should break even by the middle of 2013. "They were negative in Q4, they are negative in Q1 of this year. We expect them to break even in the second quarter and we'll make up the difference in the back end of the year. We're on target to achieve that objective." In August of 2012 Dickey said these ten stations, including WABC-AM in New York, KGO-AM in San Francisco and KABC-AM in Los Angeles, were "under-invested vehicles for syndication." These ten stations account for about 10 percent of Cumulus' total revenue.
On the Cumulus growth initiatives, Dickey said the company made investments in the CBS Sports Network, Right Now Traffic and Daily Deal play, SweetJack. His expectations are that those businesses will break even in 2013 with growth in 2014. Dickey says Sports and Traffic alone are both $150 Million revenue markets.
The industry is well aware of huge revenue potential in sports. In addition to the CBS/Cumulus launch, NBC and Dial Global are getting set to launch a network on April 1st. Dickey says CBS has launched a great lineup and 300 affiliates are on board adding, "The next big wave will come when contracts expire." For example, if a station is carrying ESPN or Fox Sports and decides to switch affiliations. Dickey said clearances and ad bookings are off to a very good start. "Ad Sales look strong. We expect to exceed our budgets in 2013.
At SweetJack, Dickey said that business took in $10 million in revenue in 2012 and is still in the investment stages. All of the new Cumulus initiatives are being invested in to help drive revenue in addition to regular spot sales. Dickey says scale has its advantages. "The legacy Cumulus stations never could have done this. Businesses have to evolve and innovate."
(3/19/2013 1:12:37 PM)
I've listened to KABC-Los Angeles for over 30 years. The syndicated garbage from New York is killing the station. Los Angeles is a left-of-center city on the West Coast; we don't want the ranting of right-wingers from the East Coast. When KABC addressed a variety of topics targeted to L.A. listeners, it was always among the five highest rated stations in the market. When it became all right-wing politics, with few locally-generated programs, the ratings tanked. Go back to Live and Local!
(3/19/2013 9:25:59 AM)
Any station that can draw and hold a massive audience as well as cut some decent, effective spots will have numbers and advertisers.
On surface, this doesn't seem like "god-particle physics".
(3/19/2013 9:04:20 AM)
One might consider the graying demographic of AM listeners are a reason why revenues are down...no station...not even WABC would be immune from that issue.
(3/19/2013 5:51:06 AM)
Why are the 10 major market sations a "revenue drag" on the company? Those legendary stations should be the golden goose.
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