CMLS Update

TMT


Please note, this is an update to DM Client Interview: The Bull Case for Cumulus Media (CMLS), which was originally presented on 8/22/2013.

Highlights

On August 22, 2013, DeMatteo Monness (DM) interviewed one of its clients about his long thesis on Cumulus Media (CMLS). Steven Weber, DM’s Director of Research, conducted the interview. Topics discussed included: an overview of how the client assesses Cumulus’ business model, what growth drivers matter most, why trends in radio listenership are holding steady, what is a reasonable value for the company’s shares, and more.

Subsequently, on Friday, August 30th, Cumulus announced its $260 million acquisition of Dial Global, one of the nation’s largest syndicators of radio programming. Our client was kind enough to provide some high-level thoughts on the deal. The below summary note reflects the opinions and judgments of DM’s client, and not the opinions or judgments of DM. DM does not exercise any control over the information or point of view expressed and reflected below.

Dial Global (previously Westwood One) is a competing radio network roughly the same size as Cumulus Media (CMLS). In a separate transaction, CMLS will sell a group of very mature, high-margin smaller market stations to Townsquare Media for $238 million. These proceeds and some excess balance sheet cash will be used to fund the Dial Global deal. A few quick thoughts and takeaways:

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