In an announcement released just after Wednesday’s Closing Bell on Wall Street, United States Traffic Network (USTN) revealed that it has entered into a wind-down agreement with Entercom Communications, “its largest and only secured, creditor.”
The terms of the agreement are confidential.
However, USTN says it has commenced an orderly wind-down of its radio business under the supervision of independent liquidating agent Gavin/Solmonese LLC.
In addition, USTN says it has agreed to cause the dismissal, with prejudice, of its litigation against Entercom.
With that, all USTN radio employees have been released from all non-compete and non-solicitation agreements, and every station and client will be given service for a limited wind-down period.
USTN, with the assistance of Gavin/Solmonese, is actively engaged in exploring all option regarding its Intellectual Property and other assets. There is speculation that iHeartMedia is an interest party and is seeking bankruptcy court approval to obtain some or all of these assets.
As previously reported by RBR+TVBR, the final day USTN will be providing data, talent, maps, or any other services to radio stations will be Friday (9/7).
FROM THE RBR+TVBR ARCHIVES:
Forget Cumulus Media’s slightly-higher net income and the efforts of CEO Mary Berner that are largely repairing “a broken company.” The company that appears to be shattered is the one responsible for a $4.8 million write-down during Cumulus’ Q2 — US Traffic Network (USTN).
A three-page internal memo distributed across Entercom’s radio stations on Monday sheds new light on the radio company’s testy relationship with United States Traffic Network (USTN), which has taken a financial hit of approximately $30 million thanks to internal issues that have plagued the third-party provider of traffic reports to AM and FM stations across the U.S.
Entercom President/CEO David Field scrapped his midday appointment schedule and issued a statement Monday explaining how his radio broadcasting company’s contract with USTN has ended — and how “relieved” Entercom is to be out of contract it inherited from its merger with CBS Radio. He also had some sharp words regarding USTN’s lawsuit.
Fraudulent Inducement. Breach of Fiduciary Responsibility. Misappropriation of Trade Secrets. Those are the charges brought against one of the nation’s biggest radio broadcasting companies by a provider of traffic and weather information to local and syndicated radio stations across the country that’s had its fair share of bumps and bruises in the last six months.
USTN continues to distance itself from its recent financial troubles under its previous Australian owner by selecting a COO. It’s an individual who has had previous leadership roles at Westwood One and at Shadow Broadcast Services/Metro Networks.
Entercom has attracted renewed attention to the radio industry thanks to its merger with CBS Radio, which closed nearly six months ago. But, there’s a long road ahead to fully realize the benefits of this deal — and that was made clear in a Q1 highlighted by weak ad conditions and a $12 million sting tied to a broadcast traffic services company.
Just two months ago, Entercom’s head revealed that US Traffic Network was in severe financial difficulty and directly responsible for the radio company’s dip in Q4 2017 pro forma revenue. David Field called it a short-term issue. He was right: USTN and Entercom have renewed their vows — and struck an equity partnership.
After being called out by Entercom in the company’s Q4 and full-year 2017 earnings call for nonpayment of services, leading to a $4 million write-down of revenues, United States Traffic Network (USTN) has completed a management-led buyout of the company. The buyout was spearheaded by its President.
A Malvern, Pa.-based company that connects businesses with on-air, online and on-the-go traffic technology and provides local content, traffic information, advertising, and interactive marketplace solutions to media partners and businesses nationwide played a key role in Entercom’s dip. This revelation came in a detailed account of what happened to the company in Q4 2017. “Lackluster” leadership at the former CBS Radio was also a factor, Entercom head David Field said.
The U.S. Bankruptcy Court judge overseeing iHeartMedia’s Chapter 11 restructuring plan has before it a request from the nation’s top owner of radio stations to approve a purchase agreement. What does iHeart want to buy? We don’t know.