The company, which owns and operates several Tri-Cities radio stations, asked for the protections while it puts in place a financial restructuring plan hashed out with lenders to cut $1 billion from its $2.4 billion debt load.
The filing wasn’t a surprise after Cumulus defaulted on a $24 million debt payment earlier this month and was delisted at NASDAQ last week. As of Thursday, the company’s stock was trading at 9 cents on an over-the-counter market.
In a press release, CEO Mary Berner downplayed the significance of the bankruptcy protection filing and said business at the company’s 446 owned and operated stations would continue as usual.
“As we have demonstrated in many measurable ways — including increased ratings, revenue market share gains, improved employee satisfaction, reduced employee turnover and, over the last several quarters, our return to year-over-year EBITDA and revenue growth — that turnaround has not only been successful but is continuing,” Berner said. “However, as we have noted consistently, the debt overhang left by previous years of underperformance remains a significant financial challenge that we must overcome for our operational turnaround to proceed.”
In the Tri-Cities, Cumulus owns classic rock station WQUT on FM 101.5, country station WKOS on FM 104.9, sports talk station WXSM on AM 640, business station WGOC on AM 1320 and news and talk station WJCW on AM 910. It also owns Westwood One, a radio syndication company that distributes talk, music and sports programming, including Imus in the Morning with Don Imus, The Savage Nation with Michael Savage, The Mark Levin Show, The Bob & Tom Show and The John Tesh Radio Show.
Earlier this year, the company’s board of directors approved a “poison pill” to drastically dilute the value of its stock if another company were to purchase 4.9 percent of the company in public trading. The measure seemed to be an effort to stave off rivals looking to scoop up its more valuable assets and sell of the rest in pieces.
Despite still reaching large audiences, traditional radio has seen advertising revenue decline as studies seem to show less expensive internet ads have the same effectiveness and can be more narrowly targeted at consumers.
Cumulus competitor iHeartMedia seemed to be on the verge of bankruptcy in July, but worked out a debt restructuring deal by giving some of its lenders a significant share of the company.