To say the last 15 months have been “transformational” for Townsquare Media is likely an understatement. The media company saw its CEO shift to a largely ceremonial role while co-CEOs were named. Now, one of those co-CEOs is set to exit.
Why now? Is one Lew Dickey Jr. perhaps in the mix? A source close to the matter is talking.
Across 2018, one of the biggest — and largely unfounded stories — to emerge involved the plans of Mr. Dickey, the co-founder of Cumulus Media.
In 1997, Lewis W. Dickey Jr.co-founded what is today the No. 2 commercially licensed owner of radio stations in the U.S. by asset count. In June 2000, the man who goes by “Lew” took the reins as CEO, leading the company to rapid growth. In an April 2014 RBR + TVBR report, it was noted that Cumulus created $1.2 billion of shareholder value. A major refinancing had just been completed, two Chicago FMs were brought in to the family from Merlin Media, and NASH country music lifestyle brand had just been launched to great fanfare.
Three years later, the company had a new CEO, Mary Berner. But, Dickey remained on the Cumulus board until March 2017, when he resigned “to pursue other professional interests.”
Those other professional interests fully emerged in May 2017, when a return to AM and FM station ownership for Dickey became a top story that’s still the subject of much speculation.
Dickey’s newly formed entity, Modern Media Acquisition Corp., was designed expressly for a methodical merger. That has yet to happen 1 1/2 years later.
With Prasad’s exit, the rumormongers went into overdrive with talk that Dickey could be eyeing Townsquare.
When launched, Modern Media described itself as “a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization, recapitalization or other similar business combination with a target company.” Furthermore, Modern Media said it “intends to seek a target company with an enterprise value of approximately $500 million to $1.5 billion.”
With a market cap of $91.3 million, Townsquare could fit the bill — only if the speculation was true.
“I can assure you that Lew Dickey has nothing to do with Dhruv Prasad’s departure,” a source close to Townsquare Media tells RBR+TVBR.
PRASAD’S PASSAGE TO NEW PASTURES
The source notes that, since October 2017, Prasad and co-CEO Bill Wilson were focused primarily on two things — reorienting the company to a “local first” strategy, and driving the growth in Townsquare’s local broadcast and local digital businesses.
This was spearheaded by Wilson, who will become Townsquare’s sole CEO at the end of January. Wilson has led Townsquare’s digital initiatives since Day 1
Erik Hellum, appointed COO of Local Media with the October 2017 shift of Steven Price to Executive Chairman from the CEO slot, pitched in with Wilson on leading all of the local market operations.
Meanwhile, it was up to Prasad to “rationalize” Townsquare’s non-local businesses, particularly the live events arm.
This was spearheaded with the May 2018 divestment of North American Midway Entertainment (NAME) — an investment that proved to bring more harm than good — to North American Fairs LLC, an entity owned by Danny Huston — the one known for his 25-year ownership of the Indiana State Fair Midway, not the actor who portrayed “General Erich Ludendorff” in the 2017 film Wonder Woman.
Townsquare sold NAME to NAF for $23.5 million. The deal does include a provision allowing Townsquare to collect 15% residual interest in any future proceeds of a sale of NAME in the next 10 years. The sale to NAF was struck at a price valued at $52 million less than what Townsquare paid for NAME in August 2015.
Prasad spearheaded the sale of NAME and the streamlining of other non-local live events.
With these goals accomplished, a decision was made by Prasad to seek another opportunity.
“The company has had a great 2018 and operations are running smoothly,” the source said, failing to note a severe decline in Townsquare’s stock price since the start of September 2018. “Dhruv felt it was time for him to move on to the next stage of his career.”
The source adds that business will continue as usual at Townsquare, with no change to its business strategy going forward.
This apparently includes no change in ownership, or investment in the company by Dickey and Modern Media — leaving those anticipating his return to radio to begin a guessing game involving a different radio broadcasting company. Time is quickly running out for Dickey to make a deal, and the rumors will only persist until firm news from Atlanta emerges.
Radio + Televison Business Report values editorial sources across the broadcast media industry. Anonymous sources are infrequently used in RBR+TVBR reporting and only done so when entrusted in conversations with key individuals highly active in the radio or television industries.