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Cumulus Media Inc. (CMLS) Message Board

  • discotito discotito Apr 12, 2010 10:42 AM Flag

    So what makes radio so great???

    First off, for those of you who think I'm Jerry Del Colliano... I will once again repeat... I am not Jerry. I have never met him but think his daily report is spot on with what is happening with radio.

    So what makes radio so Great??? Tell me why you think radio is coming around??? And if it is coming around... shouldn't Cumulus hire back some of the 1,200 people they let go? Don't get me wrong, Clear Channel and Citadel are just almost as bad as Cumulus for running a radio cluster. What makes radio in your opinion so great??? Post your opinion without the name calling on what makes radio so great.

    If Clear Channel is having a hard time with it... Citadel is already in the tank... what makes you think Cumulus is above both of these???

    Story today in the NY Post. "Clear Channel creditors poised to pick up pieces". If radio giant Clear Channel Communications can't restructure its debt in the next few years, it will likely collapse, sources told the Post. And that is exactly what some of its large creditors want.

    Clear Channel, the nation's largest radio station owner has been unsuccessfully negotiating with some lenders to refinance its crippling debt, a source said. "There have been various initiatives over the last month," said a second source close to the situation.

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    • Radio is great because it fills that personal void most everyone has on their way to work each day. The thing that passes your time at work and calms your nerves before you reach home. People love their Dj's and talk show personalities. I'm not alone, much of America still feels this way. You can't replace that connection with Ipads Ipods or Iphones.

      • 2 Replies to crazytanguy
      • thats absolutely the most insane comment Ive read on this board in 3 years Ive been watching. Let me start by stating that
        1. telecommuting has grown 300% since 9/11 so alot more people dont have that "void" you refer to.
        2. Exactly who listens to radio at work? what you are calling radio is probably satellite and thats a paid service that CMLS has no part of.
        3. 90% of the DJ's are gone. What station can afford their own? Now you have 1 DJ over 20 markets and a personalized VO insert. WHats to love here?
        4. You are so alone that you dont even know your alone.
        5. The iphone IS the radio that you are referring to. Ever listened to a good podcast?
        Terrestial radio will be 99% talk radio in 2 years. At that point you will have segmented your audience down to the finest level and all thats left is the shouting. Advertisiers will flee as they have already done.
        You say radio advertising is cheap and I say their is a reason for that. Its worth what it delivers and you get what you pay for. good luck. Im short here.

      • crazytanguy... I agree with you 100%... but in this day and age of Cumulus/Clear Channel/Citadel going into stations and clearing out your favorite personalities... listeners are starting to leave as well. More & more Cumulus stations have been turned into a jukebox with 500 songs in rotation with no DJ's and more and more commercials on the cheap. Clear Channel is starting to use the same DJ to cover 10 different markets with the same show. Nothing local ever mentioned except the ads. Now when the local ad $$$ start to dwindle down because nothing is local... thus the 3 Companies above will have to do something different. Hopefully it will be to hire local DJ's again for the stations that we love to listen to in the car, at work, or just taking it easy at home.

        You said it best... "People love their Dj's and talk show personalities. I'm not alone, much of America still feels this way." Hopefully the Top Executives will remember this before all you have is Satellite Radio and then no one listening to their stations as there not live and local.

    • If you think CMLS and other radio stocks are a bad buy, sell and move on.

      What is your motive? What are you trying to accomplish?

      Just curious.

    • Radio isn't that great...but it is cheap. I'm defining cheap in terms of free cash flow yield. In other words, how much cash do the owners (me, longtime, tricky dicky, etc) get each year relative to the current market cap.

      '09 free cash flow totaled ~$32m, '08 free cash flow totaled ~$54m. I think it is resonable to assume 2010 free cash flow will be between $35m and $45m. The current market cap is $170m. Taking the middle of my estimate for 2010 fcf gives us a free cash flow yield of 23.5%, sort of like a P/E of 4.2.

      The debt is huge, but the payments are manageable. The credit markets are thawing and they should be able to refinance as it comes due since they've covered the interest easily in all but the worst of times in early '09.

      I agree with you, disco, radio is in secular decline. But I would add that it is in a cyclical unswing coming out of this recession.

      At a 23%+ free cash flow yield it doesn't have to be a great business to be an outstanding investment.

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