David Field: Radio ‘Healthy’ Despite Top Two Woes


An internal memo penned by Entercom President/CEO David Field, first shared today by Streamline Publishing’s co-owned Radio INK, has quickly emerged as another canon in the collection of liturgical love of Field for the radio industry — and another reason why the industry deserves more attention from ad buyers and marketers.

With a midday post on Twitter by Field, what was meant for internal consumption is now another rallying cry for radio.

And, perhaps most importantly, it is clearly visible to a Wall Street investment community that’s perhaps wary of any investment in a radio company.

The public dissemination of Field’s piece — by Field himself — offers his personal take on last week’s voluntary Chapter 11 reorganization filing by iHeartMedia. 

Fact: iHeartMedia bankruptcy due to prior management team over leveraging company. Period. 

The Twitter-shortened statement about one of Entercom’s biggest competitor is perhaps the biggest takeaway from Field’s “Thoughts on the iHeart Bankruptcy Filing,” now available in full on Entercom’s website.

It also comes as Entercom’s stock has been bouncing between $9.85 and $11 since May 2017 — well before the company closed on its tax-free acquisition of CBS Radio.

In fact, Entercom’s stock was valued at $12.16 on Dec. 1, 2014.

Thus, Field’s thoughts could also be seen as a necessary accelerant for a stock that’s been less than fiery.

In opening his memo-turned-blog post, Field noted how iHeartMedia’s bankruptcy received prominent news coverage across the country, and how it came on the heels of a similar announcement from Cumulus Media, the nation’s No. 2 radio broadcasting company by number of stations.

Field said, “the iHeart news has spawned discussion on the implications for the Radio industry and its future.  Since there seems to be a considerable amount of misinformation and inaccurate speculation floating around, I thought it would be constructive to share some facts and thoughts to help clarify the situation.”

Without hesitation, Field summed up exactly how he views the financial woes of the two biggest players in the radio industry.

“First, iHeart and Cumulus went bankrupt because years ago prior management teams made ill-advised decisions to place too much debt on their companies,” he wrote. “Period, full stop. The bankruptcies have nothing to do with Radio. In fact, any company in any industry that takes on too much debt will suffer a similar fate.”

Field then took aim at “some reporters and observers” who he claims “have created an erroneous and misleading narrative that the bankruptcies are a result of challenges within the radio industry.”

He said, “They could not be more wrong.  The fact is that Radio is a healthy business that generates large amounts of earnings and operating cash flow.”

From here, the industry’s biggest cheerleader repeated statements on Radio’s reach (it’s the No. 1 reach medium in the U.S., touching more than 270 million Americans each week) and its ability to generate “superior ROI for customers.”

He added, “While other media have been highly disrupted by changing consumer habits and suffered severe audience erosion, Radio has more listeners than ever before.”

If Radio has an issue, Field noted, “it isn’t the size of our audiences or the value of our product or the health of our business model.”

What is the issue, then? “Our issue is that we are highly undervalued and receive far less than our fair share of total ad spending.”

This is where Entercom’s marketing and promotion comes into play, as Field boasted, “With Entercom’s newly enhanced scale, advocacy efforts, marketing, capabilities and customer outreach, we intend to change that. And with iHeart and Cumulus emerging from bankruptcy, the industry will be even healthier going forward and that’s good news for all of us.”

On a final note, Field turned inward — again, in what could be designed as a jolt to investors to get Entercom shares above $12.

Referring to the Cumulus and iHeart Chapter 11 filings, Field concluded, “In the wake of these announcements, it is a good time to reflect on how well positioned Entercom is to compete effectively, grow and thrive in the years ahead.  We did not make the mistake of overleveraging ourselves and yet we still emerged as one of Radio’s two largest companies with the scale, brands and capabilities to compete to win. We are a leading media and entertainment company, reaching over 100 million people each week through our robust collection of highly rated radio stations, digital platforms and live events.  We are also the No. 1 creator of live, original, local audio content and the nation’s unrivaled leader in news and sports radio. And, even after our competitors come out of bankruptcy, we will still have the industry’s strongest balance sheet, providing us with the financial strength to build and grow and invest and play offense for the years ahead.”

As of 2:52pm Eastern, Entercom shares were down 2 cents to $9.98.