Cumulus Media CEO Mary Berner called all of Randy Michaels’ bluffs and still came away with most of what they wanted.

Cumulus began operating 97.9 WLUP-FM and 101.1 WKQX via LMA in January 2014 that included a put and call agreement where either side had the right to trigger the deal to be converted into a purchase within ninety days of the fourth anniversary of the LMA. That came when Merlin exercised its end of the agreement for Cumulus to pay he greater of $70 million minus the aggregate amount of LMA fees or $50 million for the two stations last October. Had it not been for Cumulus’ bankruptcy filing in November that would have been the end of the story. Whether or not Cumulus liked the deal they would have been contractually obligated to close the deal.

Under the cover of the bankruptcy filing Cumulus was able reject the deal with Merlin which led to the sale of WLUP-FM to Educational Media Foundation for $21 million last month. In the court filing rejecting the sale contract Cumulus stated that it paid Merlin on average $600,000 per month to lease the two stations and claimed to have suffered losses of $1.5 million in 2014, $800K in 2015, $1.1 million in 2016, and $5.1 million in 2017.

By holding the line in the sand on the $50 million minimum purchase price they would have had to pay, Cumulus still gets the more higher billing station of the two*, the IP of the other, and all the goodwill and revenue that could potentially come from a relaunch of The Loop. *The last time Chicago station revenues were publicly released was for 2015 when WKQX was the highest biller in the Cumulus Chicago cluster with $11.5 million in revenue. WLUP-FM billed $5.5 million, while Talk 890 WLS was at $8.1 million and Classic Hits 94.7 WLS-FM at $6.9 million.

By holding out for a better deal, Mary Berner did lose out on the 97.9 frequency but considering the low revenue, high costs associated with the Mancow morning show, and the losses incurred that may not be a bad thing. Even if Cumulus does resurrect WLUP beyond its current HD2/online incarnation, the publicity the station got on its way out the door and would get for being resurrected along with the streamlined staff would make it a much more profitable operation. Berner held her ground and came out with a deal that looks great for Cumulus’ balance sheet moving forward.

That said there is no obvious place for Cumulus to place WLUP on the Chicago FM dial. WKQX is its strongest performer and Entercom’s flip of “K-Hits 104.3” WJMK to Classic Hip-Hop in November leaves WLS-FM in a much stronger position as the only Classic Hits station in the market. Even if there is a potential translator play there it wouldn’t be a major player as much of the Loop audience would be in the suburbs.

But don’t feel bad for Randy Michaels and Merlin Media in all of this. While Merlin was to receive a maximum of $70 million in the original LMA to buy deal with Cumulus, by our math they will still come out with $61.8 million between Cumulus and Educational Media Foundation. EMF paid $21 million for WLUP, while Cumulus paid $22.8 million in LMA fees between January 2014 and February 2018 and another $18 million to purchase WKQX. The total Merlin Media era may go down as a great failure but considering the station valuation drops since the company was launched in 2011 with the purchase of the two Chicago stations and 101.9 WRXP New York the losses could have been much worse.