Midwest swap-fest for Cumulus and Clear Channel


Clear Channel has found a new home for the two stations it has to divest in Cincinnati under its settlement with the DOJ. WNNF-FM & WOFX-FM are going to Cumulus Media. In return, Clear Channel will enter the Green Bay, WI market with five stations from Cumulus. No cash is changing hands. Also, it doesn’t look like Clear Channel plans to be a long-term player in Green Bay.

The swap sends WDUZ-AM & FM, WPCK-FM, WQLH-FM and WOGB-FM to Clear Channel. But Cumulus remains in Green Bay with WZNN-FM. It also has a five-station cluster in the adjacent Appleton-Oshkosh market. Many signals from the two markets overlap quite a lot.

Come July 1, 2013 Clear Channel has a two month window where it can exercise an option to force Cumulus to buy back the five Green Bay stations for $17,636,643. If FCC rules don’t allow Cumulus to acquire the stations then, it has to find a substitute buyer to take them off Clear Channel’s hands.

In fact, listeners, employees and advertisers in Green Bay will hardly notice that the stations have moved from Cumulus to Clear Channel ownership since Cumulus will continue to program the stations for Clear Channel under an LMA.

Meanwhile, once the US Department of Justice gives its approval for Cumulus to acquire the two Cincinnati stations, it will also begin programming them under an LMA prior to having the licenses transferred after the FCC also gives its OK.

Now, since the whole reason that Clear Channel has to divest the Cincinnati stations is that its new principal owners, Thomas H. Lee Partners and Bain Capital, are also investors in Cumulus Media Partners, which owns three Cincinnati stations, why is it that Cumulus can now acquire the two stations? They are not being acquired by Cumulus Media Partners, the private company made up mostly of the former Susquehanna Radio group, but rather by Cumulus Media, the publicly traded company. Cumulus Media manages the Cumulus Media Partners stations and is a part owner, but TH Lee and Bain do not have any ownership interest in Cumulus Media. Don’t you love how government works?

RBR/TVBR observation: Clear Channel has been working to exit markets ranked 100+ rather than expand in those smaller markets, but it had to find some way to divest the Cincinnati stations to satisfy the DOJ. With the financing market so tight for outright sales, a swap certainly made sense. This deal helps Cumulus expand in Cincinnati and Clear Channel isn’t taking up residency in Title Town forever – in fact, not for very long.