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Cumulus Media to buy out radio partners for $740M

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Atlanta-based Cumulus Media Inc. said Monday it has agreed to buy out its partners in a venture that owns 32 radio stations in nine cities, including three in Indianapolis.

Cumulus already owned 25 percent of Cumulus Media Partners LLC; it will acquire the remaining interests from three private equity firms—Bain Capital Partners LLC, The Blackstone Group L.P. and Thomas H. Lee Partners—in exchange for stock worth about $740 million.

In 2005, the partnership paid $1.2 billion for Pennsylvania-based Susquehanna Radio Corp., which owned stations in Indianapolis, San Francisco, Dallas, Houston, Atlanta, Cincinnati and Kansas City. Cumulus Media, the second-largest radio broadcaster in the country, has been operating the stations under a management agreement ever since.

Cumulus Media Partners “has long been one of the most coveted sets of assets in the radio industry and we expect it will immediately become an important driver of growth and profitability for the company," Cumulus Chairman and CEO Lew Dickey said in a prepared statement.

Among the potential benefits of consolidating the operations, he said: increased revenue and profit, a more diversified and strategic national media platform, and a stronger capital base to position the company for strategic acquisitions.

“It is not a major change for us,” said Chris Wheat, market manager for Cumulus Indianapolis, which includes country music powerhouse WFMS-FM 95.5, classic hits WJJK-FM 104.5 and Top 40 WRWM-FM 93.9. “It’s an opportunity to get total control and use the giant media company—eventually—as leverage for other purchases.”

The transaction, which is subject to standard shareholder and regulatory approval, is expected to close during the second quarter.

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  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

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