Cumulus Media says it has completed the previously announced acquisition of WestwoodOne, formerly known as Dial Global, for $260 million in cash, consisting of $45 million attributable to the equity of WWO and the retirement of $215 million of debt of WWO. Cumulus used cash on hand, including $238 million in cash proceeds from the company’s previously completed sale of 53 stations in 12 small and mid-sized markets in November to Townsquare Media.
Cumulus CEO Lew Dickey tells RBR-TVBR: “We’re excited to join forces with the talented people at Westwood One. We look forward to leveraging this new platform to bring more products and services than ever before to our 10,000 affiliates.”
The buy will add sports, news, talk, music and programming services content – enabling Cumulus to provide a wider variety of options to affiliates, other media platforms and international platforms. New content acquired includes NFL, NCAA, NASCAR, Olympics, AP Radio News, NBC News, the GRAMMY Awards and other popular programming.
Additionally, the combination of these content assets, along with the infrastructure to create new content vehicles and local activation opportunities, is expected to allow Cumulus to provide more extensive solutions for advertisers.
Current Westwood One CEO Paul Caine may or may not be be running the combined entity as a division of Cumulus. All Cumulus Media Networks assets will soon be called WestwoodOne assets. Mike Pallad, Former EVP/Sales at Cumulus Media, was to report to Caine but he just left for Apple’s iTunes Radio.
One of the compelling questions is which news entities will survive–NBC News Radio, AP Radio News, ABC News Radio or CBS Radio News? Most likely all will stay, from what we’ve heard, but we will likely see consolidation of duplicative functions across these networks.
What about Sports? DG brings the NFL, Final Four (both are long-term contracts), and Olympics. But will Cumulus keep both the NBC Sports Network and The CBS Sports Network? We’ll see soon, but we’ve heard the plan is to keep them both for now. Again, at the least, expect consolidation across these sports offerings.
The comp deal with CBS Radio stations with WestwoodOne is a great synergy. WWO needs the CBS deal and that comp deal for their RADAR networks, spots and dots business and transactional business.
Although the merger was not subject to the pre-closing notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act, Cumulus noted that the Antitrust Division of DOJ is conducting a review of the transaction: “While Cumulus believes the merger does not raise any anti-competitive issues, it continues to voluntarily assist the DOJ with its evaluation. However, it cannot predict if the DOJ will elect to seek, or obtain, any remedies, or the effect that any remedies may have on Cumulus’ business, financial condition or results of operations.”
RBR-TVBR observation: DOJ may still be looking through the suit brought on Dial Global by Talk Radio Network. CEO Mark Masters blamed TRN’s financial problems on its former ad sales rep, Dial Global, which TRN sued 8/12 for allegedly violating antitrust laws by “conspiring to monopolize talk radio syndication.” The last we know of that was a mid-November pre-trial conference discussing settlement options, exploring motions, arranging a plan for discovery and setting a trial date. Masters had said that info gathered from the discovery process in the suit will help him stop Cumulus’ buy of WestwoodOne/DG. As well, Guarang Shah, a Dial Global shareholder, hit the company’s board with a proposed class action in New York state court 9/18, alleging they breached their fiduciary duties by agreeing to sell the company to Cumulus. The fact that the buy still went through says a lot, though.