As Saving Country Music first reported on Monday (9-28), Cumulus Media was sent into turmoil last Thursday (9-24) when the company’s stock was decimated to the tune of a -15.54% loss to settle at $0.76 per share after downgrades from Moody’s and Seeking Alpha among others. Rumors had Executive Vice President of Content and Programming John Dickey cleaning his desk out, and a personnel shakeup imminent. And now it has happened.
Lew Dickey, the embattled and polarizing CEO of Cumulus is out, and his replacement has been named as Mary G. Berner, a seasoned media business operator who joined the Cumulus board in May. Lew Dickey founded Cumulus Media in 1997, and has served as the company’s CEO for 16 years. Dickey will stay on at the company, but in a downgraded role as a Vice Chairman. Vice President John Dickey is out altogether.
“When I founded Cumulus in 1997, my goal was to create the nationwide platform we have today, with 460 stations in 90 cities, the industry’s most important network, and unique original content, such as NASH,” said Lew Dickey in a statement. “After serving the company day-to-day for almost 19 years, and the last 16 as CEO, now is right time for me to transition from CEO to Vice Chairman. I look forward to working with my fellow board members to support our new CEO.”
Of course all of the official news out of the company is positive, but the financial details of the company are virtually all negative. The stock price has slid from a high of $4.51 in the last year. At the last earnings report for Cumulus in May, the company reported revenue of $271.08 million for the first quarter, down 7.2% from the year-ago quarter. It also reported a loss of 5 cents a share. Advertising fell 7% from the year-ago, digital advertising revenue fell 16.4%, and political advertising fell 67.7% (source). Cumulus is also carrying over $2 billion in debt.
During Lew Dickey’s tenure, the executive was responsible for some public brushups. He blamed Rush Limbaugh for a company-wide ratings slide in 2013, and part of Lew’s plan to turn the company around has been to move away from conservative talk to a more country-centric format with his signature brand NASH. NASH has since partnered with Scott Borchetta’s Big Machine Records on the NASH Icon record label whose signees include Reba McEntire, Martina McBride, Hank Williams Jr., and Ronnie Dunn. NASH also just took over the naming right of Country Weekly magazine.
However country radio ratings have continued to slide in the aftermath of Bro-Country, and Cumulus Media’s big bet on country music has yet to pay off. Cumulus has become a big mover and shaker in the country music space, launching reality TV competitions, and pushing their NASH “lifestyle” brand that among other things has plans for NASH-branded clothing, food, furniture, and paint.
All of the Cumulus NASH plans may now be re-evaluated by the new management. The biggest question at the moment is what will happen in the absence of Content and Programming Vice President John Dickey. John was the company’s biggest champion, decision maker, and spokesperson for the NASH brand. He is being replaced by industry veteran Mike McVay.
Cumulus Media stock did not rebound after last Thursday’s losses, and upon the news of the CEO shakeup, was down another – 8.5% on Tuesday, setting in at $0.68 cents at post time.
Jeffrey Marcus, Chairman of the Board of Cumulus Media, Inc. and a Partner at Crestview Partners, which manages funds that own rougly 27% of Cumulus’ outstanding stock, said in a statement, “We are delighted that Mary has agreed to serve as our new CEO. Mary is a proven executive, with over 30 years of experience in media driving results in multi-platform advertising and content driven businesses. Not only has she successfully built and transformed some of the best-known consumer and b2b media brands and companies in the world, she has demonstrated an ability to turn around a company’s performance and build value for shareholders.”
But the big question remains, if Cumulus decides to pull back from or abandon the NASH brand, how will it affect the businesses and institutions in country music it is tied with? From scores of radio stations across the country, to Big Machine Records, to Country Weekly, and the American Countdown Music Awards on FOX, what Cumulus decides to do could have significant reverberations throughout the country music industry.