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Citadel. From Larry Wilson to Farid to Lew Dickey. With A Bankruptcy In Between

February 18, 2011

by Ed Ryan
The announcement is expected later this morning. Citadel goes to Cumulus. Lew Dickey to run the show. Farid, most likely, to exit at some point. It's been a long and winding road for this company founded by Larry Wilson over 25 years ago.

About 12 years ago I was sitting in a luxury suite of the Bellagio Hotel with my dinky tape recorder. My assignment was simple. Record one of radio's biggest big wigs. Larry Wilson, one of the nicest guys I ever interviewed, walked over and sat down on the couch.  I'm pretty sure he was wearing cowboy boots and a cowboy hat with his suit. The then Citadel CEO went on for about an hour about radio, his radio stations, his family, but mostly his employees. I remember him going on and on about having big country stars to his ranch where he invited nearly all of his employees for some crazy barbecue. It sounded like a real morale booster to me. A company everyone loved to work for.  Soon the company will be rolled up into Cumulus and combined, make up the 2nd largest radio company in the United States behind Clear Channel.

Citadel was founded in 1984 in Phoenix by Wilson as Citadel Associates Limited Partnership. In 1990, it was renamed Citadel Associates Montana Limited Partnership for the purpose of owning and operating stations in Montana that had formerly been owned by CALP. A year later, Citadel Broadcasting was officially incorporated and in 1992, it acquired all of the radio stations owned by its predecessors. Within a decade, Citadel expanded to 26 states. Within that time period, it absorbed all Bloomington Broadcasting radio holdings and 11 stations from Dick Broadcasting Company. It also acquired 3 radio stations from Slone Broadcasting and Slone Radio. In 2001, Larry Wilson sold Citadel to private equity firm Forstmann Little & Company for $2.1 billion. By that time, the company had grown to 205 stations in 42 markets.

Farid Suleman has been the Citadel boss since March 2002. Prior to joining Citadel, Mr. Suleman was President and Chief Executive Officer of Infinity Broadcasting Corp, and Mel Karmazin's right hand man. One radio insider told me yesterday "Farid is a legitimate “financial manipulation genius.”  He proved that when he was the back room secret weapon Mel Karmazin used to build Infinity Radio group from scratch. Unfortunately, Farid never went to the same Dale Carnegie School on how to be persuasive and play nice in the sand box". In December of 2009, Citadel filed for bankruptcy. In its bankruptcy petition, Citadel listed $1.4 billion in assets and $2.5 billion in debts.  The Citadel troubles were well documented. Citadel took on billions of dollars in debt in 2006 to finance its purchase of Disney’s ABC Radio stations. But in the years following the deal, revenues plummeted as advertising dried up.

When the smoke clears and the dust settles, you can bet Lew Dickey and Farid Suleman will not be Bud Abbot and Lou Costello. In all likelihood Lew will be the Lone Ranger and Farid will ride off into the sunset or drop from a private plane in a golden parachute. We spoke to quite a few radio insiders today about the future of Farid Suleman once this Cumulus/Citadel deal is on the books. The consensus is that Lew Dickey will chug on without Farid. One insider told us "Farid will be out. I see nothing he would bring to the Dickey team." Another said "Lew does not need him or a Miami office". That leaves only one question. How much walking around money does Farid get for orchestrating the marriage of the year?  One industry analyst told me , "Farid knows this and will bargain for as much as he can for himself on the way out.” “My bet,” another insider told us, "is that he's paid $10-25 million and retires.”

Farid will likely walk away, personally, with a lot of dough. And that angle will be beat to death. Meanwhile will Cumulus come in and cut deeper once they get all the Citadel syndication under their roof? Beating out Entercom's David Field, Lew pulled off a masterful deal if he gets this done – and he’s come a long way since the young guy who tried to sell research some 20 years ago. This story is now about  what the next chapter will be – for the industry, for competitors and most of all, for both Cumulus and Citadel employees who now face even more uncertainty in an already difficult environment that was just beginning to see some light and stability.


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