This is part of talks on how Cumulus will reduce its debt as deals close though.
Cumulus Media officially handed WNSH New York over to Entercom yesterday as a broader exchange between the two companies reached the closing table. It’s just one in a spate of recent swaps and sales and Cumulus appears ready to cut more deals in the months ahead. “We would expect to execute more of these types of portfolio optimization transactions as time goes on, continuing to employ a disciplined and strategic approach to any opportunity that we develop or that comes our way,” CEO Mary Berner told investors last week.
Cumulus intends to offload stations it has deemed non-core, such as heritage rocker KLOS, its standalone FM in Los Angeles, which is going to Meruelo Media for $43 million. That sale, along with the $103.5 million divestiture of six stations – including New York’s WPLJ and Washington, DC’s WRQX – to Educational Media Foundation are part of a plan to cash out of markets where Cumulus has determined it can’t be the No. 1 or No. 2 ranked market cluster. The $120 million in net proceeds Cumulus expects to pocket in the next several months from these two deals will be used to pay down debt and invest in other parts of the company’s business.
Digging deeper into the financials, Collin Jones, senior VP of corporate development and strategy, said the sale of some of its largest market stations to EMF will deliver net proceeds of $80 million to $90 million. The stations involved in this sale – which also include news/talk “Talk 106.7” WYAY Atlanta, alternative KFFG (97.7) San Jose, hot AC “102.1 The Sound” WZAT Savannah, and classic rock “The Rebel 105.9” WXTL Syracuse, NY – contributed $25 million to $27 million in annual revenue, and $5 million to $7 million in cash flow. The KLOS sale, by Jones estimate, is expected to bring in net proceeds “in the mid to high $30 million” range. KLOS contributed $17 million to $19 million of annual revenue and had nearly $5 million of cash flow.