Cumulus Rounds Out Radio’s Q2 Earnings Season
Yesterday during their Q2 Earnings call Cumulus announced its emergence from nine months of Chapter 11 bankruptcy protection. Over that period Cumulus sold stations and refinanced its loans as part of a total debt reduction of $1B. They’re still carrying another billion in debt on their books, but are forecasting to free cash flow about $100M per year going forward. Given how bad things were 18 months ago, even I’ll give them credit for a significant transformation.
The other part of the Earnings call was devoted to Cumulus’s actual financials, which weren’t as good. Total revenue was down 2% vs Q2’17, with their traffic revenue being down 5% YoY. Cumulus had been subletting their traffic inventory to United States Traffic Network and was caught flat footed, just like Entercom, when USTN folded its operations.
With Cumulus’s -2% added to the other broadcasters’ decreases, the radio industry is probably looking at a 3-4% revenue decline for the quarter. You won’t see mention of this in the trades, but major alarm bells should be going off for broadcasters and their investors right now. Radio’s decline can’t be blamed on the economy, or bad weather, or concert ticket sales, or whatever. Since there’s no macro industry trend contributing to the decrease it must be a Radio problem, right? Only thing is nobody’s talking about it yet. I guess it’s more peaceful to just keep your head in the sand.