Cumulus making comeback in city

Cumulus making comeback in city

March 11th, 2011 by Ellis Smith in Business Around the Region

Cumulus Media, former owner of Chattanooga's largest radio station, will soon be back in town thanks to its $2.5 billion acquisition of rival 4,000-employee Citadel Broadcasting, which controls four local stations.

The merger should be completed by the end of 2011, Cumulus indicated.

Chuck Wilkins, market manager for Citadel's local WSKZ, WOGT and WGOW stations, said listeners wouldn't notice any changes in the near term.

The proposed merger first has to go through an FCC review and must be approved by shareholders, he said.

"There are no other Cumulus stations in this market, so we won't really have to worry about cases where there are too many stations and there has to be some sorting out," he said.

Cumulus announced in a press release that the acquisition would give the company 572 radio stations across roughly 120 U.S. markets, including eight of the top 10. The deal would also save the combined companies about $50 million through "combined synergies."

The Brewer Media Group, Bahakel Communications and Clear Channel Communications will compete in the Chattanooga market with the merged company, which will be the second-largest radio broadcaster in the country after Clear Channel.

Jim Brewer, president of Chattanooga-based Brewer Media, called the merger "a unique deal," but said listeners would eventually see more "consolidated programming servers" under the new company.

"As they take control and get a handle on each market, it's likely they will use shared services for commercial production, station programming and maybe promotional efforts," he said.

Louis Lee, news director for Brewer Media's WPLZ, agreed with Brewer that the effects of the multibillion dollar merger could take years to play out locally.

However, Cumulus could face backlash from listeners who increasingly are demanding local content, he said.

"A lot of people could see that corporate takeover as the delocalization of radio," he said.

The "Jack FM" format, where content is streamed to dozens of radio stations simultaneously from a corporate headquarters to save money, disconnects listeners from local events, he argued.

Lew Dickey, CEO of Cumulus, said the deal gives Cumulus "the national scope and financial strength necessary to make critical investments in content and technology necessary to compete in today's rapidly evolving media landscape."