Entercom has announced that it will walk away from its deal with United States Traffic Network.
Entercom announced in early May that it had signed a new agreement with USTR in which it would take an equity stake. However today they state that they took back a portion of their ad inventory from USTN in April and now will take back the rest.
USTN sued Entercom on Friday for breach of contract seeking $5 million in damages saying that Entercom agreed to purchase USTN and then ended the business relationship between the two companies and informed USTN that it was going to develop a direct competitive business based upon the information gleaned during the due diligence/discovery process. Entercom is calling the lawsuit baseless, frivolous, and insulting as it attempted to work with USTN through its financial issues.
Entercom Communications Corp. (NYSE: ETM) (“the Company”) announced today that its reseller agreement with United States Traffic Network (“USTN”) has ended.
Entercom has successfully sold traffic and other short duration advertising on its own for many years. In April, Entercom took back a portion of its broadcast inventory from USTN and is achieving great success selling that inventory through its own sales channels. The Company expects to build on that success as it begins to monetize the remaining inventory taken back from USTN.
“We are relieved to no longer be mired by the difficult USTN situation that was inherited as part of the CBS Radio merger. We will move quickly to augment our strong internal sales organization to ensure that we realize the full value of this inventory,” stated David Field, President and CEO, Entercom. “With leading news brands like 1010 WINS in New York, KNX in Los Angeles, and WBBM in Chicago, Entercom has the industry’s most valuable traffic inventory and we are pleased to be in control of our own destiny as we pursue opportunities in this attractive market segment.”
The Company also noted that USTN filed a related lawsuit against Entercom on Friday. Entercom believes the lawsuit is entirely baseless, frivolous and frankly insulting. Entercom has worked tirelessly and constructively with USTN over the past six months to help USTN work through its significant financial issues. Entercom is owed substantial amounts of money by USTN, and the Company intends to defend itself vigorously and assert all of its rights.