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overview
This profile looks at the US Cumulus radio chain and associate
Cumulus Media Partners.
It covers -
introduction
The US Cumulus Media group is an
AM/FM radio station chain in competition with Clear,
Viacom's Infinity subsidiary
and Entercom among other bodies
profiled on this site.
Its corporate site is here.
the group
By number of stations Cumulus is the second largest US
radio chain in the US (behind Clear Channel) with some
310 stations serving about 61 midsize and small markets.
(As a frame of reference there are around 8,285 FM and
4,727 AM stations in the US). It is believed to rank around
eighth by revenue.
It is controlled by the family of co-founder Lewis Dickey
(with a small stake in overall equity but dominance in
voting shares). He had earlier established Stratford Research,
a broadcast sector market research and consulting firm.
Since establishment in 1997 - with the loosening of ownership
restrictions under federal communications legislation
- it has has been expanding aggressively. It has also
moved into the Caribbean. It went public in 1998 and appears
to have concentrated on growth rather than profitability,
losing money since its establishment (eg losses of US$92
million on revenue of US$252 million in 2002) before making
a small first profit in 2003.
In 2001 it settled a class-action lawsuit by stockholders
who had claimed Cumulus misreported advertising sales
in 1999.The lawsuit had seen the resignation of co-founder
Richard Weening. (In 2003 the SEC assessed
no fines or penalties against Cumulus regarding the claims
and it was not required to admit to any violations of
the US securities regime.)
In 2005 Cumulus announced formation of Cumulus Media Partners,
LLC (a private partnership with Bain
Capital, The Blackstone Group and Thomas H Lee
Partners) to acquire the radio broadcasting business of
Susquehanna Pfaltzgraff Co for US$1.2 billion.
The Cumulus model is built around shared services (content,
administration, sales) for a cluster of stations in each
location. Each station concentrates on a different market
sector, such as jazz, rock or talk. Regional and local
advertising accounts for around 90% of the group's revenue.
Susquehanna
Susquehanna Pfaltzgraff traced its origins to a pottery
established by Johann George Pfaltzgraff in Pennsylvania
during the early 1800s. The Pfaltzgraff Co (sold to Lifetime
Brands Inc in 2005) claims to be the oldest continuously
operating pottery manufacturer in the US.
Johann's great-granddaughter Helen Pfaltzgraff married
Louis Appell Sr in 1922. Appell acquired control of the
company in 1935 and established WSBA-AM in York, Pennsylvania
in 1942. His father, Nathan Appell (1869-1928), had been
active in property development and theatre management
in Pennsylvania. The family's Nathan Appell Enterprises
was sold to Warner Brothers.
At the time of the sale Susquehanna Radio was the US's
largest privately owned radio broadcaster (75% held by
the extended family, 25% by employees through an employee
stock ownership plan), owning and/or operating 33 AM and
FM radio stations nationwide.
The group's cable television and broadband arm, Susquehanna
Communications (SusCom), was formed in 1993, absorbing
a cable tv arm established in 1966. It was sold to Comcast
in 2005 for US$540 million. At that time it ranked among
the top 20 cable and broadband operators in the US, with
230,000 cable subscribers in six states. Comcast had previously
held a 30% stake.
studies
There are no major studies of Cumulus or its founders.
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