Cumulus Declares Bankruptcy

Atlanta-based Cumulus Media, owner and operator of 446 U.S. broadcast radio stations including D.C.-area stations WMAL 630 AM and 105.9 FM, WRQX 107.3 FM, and the Westwood One radio network, has filed for Chapter 11 bankruptcy according to an article published in the Atlanta Business Chronicle. Cumulus President and CEO Mary Burner cited, "... the debt overhang left by previous years of underperformance remains a significant challenge that we must overcome for our operational turnaround to proceed."

Coming on the heels of Viacom's shedding of CBS Radio, Cumulus' decision symbolizes Big Radio's time of reckoning after overleveraging itself acquiring stations in the mid-to-late 90s.  The bills are long overdue -- Cumulus defaulted on $24 million debt payment earlier this month -- and radio stocks across the board are in the tank  It's safe to assume Cumulus will liquidate some of its portfolio, and that it will have to do so in a buyer's market.  We can also take for granted Cumulus will hold on to its properties in major markets, including their chronically underdeveloped and underperforming DC outlets.  The question is whether this reorganization will cause Cumulus executives to re-think the corporation's business model to improve its competitiveness 3-5 years into the future.