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Dickey Details The Game Plan
3-19-2012
Cumulus CEO Lew Dickey told investors and analysts Monday morning that the company has had its hands full with integration, turnaround and developing new growth initiatives, all which should pay dividends in 2014. The integration had to do with Citadel and CMP which took Cumulus from 330 stations in 57 markets to 570 stations in 120 markets. The turnaround of Citadel included the hiring of 100 new salespeople, over 50 new managers and focusing on 10 stations that are being blamed for the revenue issues Cumulus is having. And the growth initiatives including making investments in new verticals such as Sports (with CBS radio), traffic, SweetJack and now NASH-FM in New York City.
Those 10 major market news/talk stations are still a revenue drag on the company that Dickey says should break even by the middle of 2013. "They were negative in Q4, they are negative in Q1 of this year. We expect them to break even in the second quarter and we'll make up the difference in the back end of the year. We're on target to achieve that objective." In August of 2012 Dickey said these ten stations, including WABC-AM in New York, KGO-AM in San Francisco and KABC-AM in Los Angeles, were "under-invested vehicles for syndication." These ten stations account for about 10 percent of Cumulus' total revenue.
On the Cumulus growth initiatives, Dickey said the company made investments in the CBS Sports Network, Right Now Traffic and Daily Deal play, SweetJack. His expectations are that those businesses will break even in 2013 with growth in 2014. Dickey says Sports and Traffic alone are both $150 Million revenue markets.
The industry is well aware of huge revenue potential in sports. In addition to the CBS/Cumulus launch, NBC and Dial Global are getting set to launch a network on April 1st. Dickey says CBS has launched a great lineup and 300 affiliates are on board adding, "The next big wave will come when contracts expire." For example, if a station is carrying ESPN or Fox Sports and decides to switch affiliations. Dickey said clearances and ad bookings are off to a very good start. "Ad Sales look strong. We expect to exceed our budgets in 2013.
At SweetJack, Dickey said that business took in $10 million in revenue in 2012 and is still in the investment stages. All of the new Cumulus initiatives are being invested in to help drive revenue in addition to regular spot sales. Dickey says scale has its advantages. "The legacy Cumulus stations never could have done this. Businesses have to evolve and innovate."
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| - NY |
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(3/23/2013 12:29:51 PM) when the FCC allowed rich people to pool their money and buy up hundreds of radio stations in markets they know absolutely nothing about, it was the death knell for radio. If you worked or listened to radio before the 1990's you can truly appreciate the talent and freedom the greatest broadcasters had and demonstrated on a daily basis. It's sad because radio has become what ails much of America...a toy for the rich to make as much money as possible from and that's why it will never recover. |
| - Mike Danvers |
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(3/20/2013 11:38:18 PM) Blah, Blah, Blah, Blah, Blah! These are the most EVIL, Ruthless Corporate Vampires of ALL time! Lew, himself may even be The ANTI-CHRIST! He is certainly surrounded by a legion of Demons. That said the first comment sez it ALL! What goes around comes around! |
| - Master Blaster |
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(3/20/2013 12:28:07 PM) lets see, hasn't grown revenue organically in 7 years yet salary is up 4X; meanwhile stock has gone from mid 20's to low 3's. It must be great to be chairman, ceo and president. When will someone notice the emperor has no clothes. |
| - terry |
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(3/19/2013 9:33:15 PM) Why 50 new salespeople, because 100 quit, why all the syndication?, because HE won't pay local talent, Why join with CBS? because they can run a network operation and HE can't. He's running all the old ABC stations into the ground. He's good with a pen for writing out his bonus, but his operations don't pencil out. He's putting on a good face for the finance people, but radio people know the Cloud Co is dead. |
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