I’ve reported on the bankruptcy status of the top corporate radio group, iHeartRadio, for some time now. It’s bad enough when the biggest station owner is in deep financial trouble, but did you know that the #2 station group now has a similar problem? Yep, Cumulus Media has filed for Chapter 11 and is around $2 billion in debt.
Cumulus was delisted from the NASDAQ stock exchange earlier this month and was about to default on a big interest payment when it filed to restructure its debt.
The company owns 446 stations in 90 markets, including the Westwood One syndication network, and famed stations KLOS in Los Angeles, KFOG in San Fransisco, and WABC in New York City.
Here’s another example of the a media company getting out over its skies trying to expand as much as possible, and using debt to do so. As you can see, this doesn’t necessarily work out too well, especially for a part of the entertainment business that’s in flux at the moment.
Yes, I know what the numbers continue to say, that radio’s just doing fine, but when you listen in prime time and hear 3 public service announcements in a 7 minute commercial pod, there’s definitely a problem.
And those 6 and 7 minute pods are one of the reasons that people jump from channel to channel, especially when listening in the car. Corporate radio needs lots of commercials to pay the bills, but the problem is that listeners hate it.
Let’s face it, advertising pays the bill for most media, and that’s probably never going away, but listeners or viewers are willing to put up with a reasonable number of commercials. When you devote more than 20 minutes of an hour to advertising, people just tune out.
All in all, what’s happening to iHeartRadio and Cumulus might end up actually doing some good. Corporate radio really needs a change, and one is being forced on it’s biggest players whether they like it or not.