I recently wrote here about Cumulus Media going on a radio station purchasing spree that could total up to $1 billion. In the week and a half since I posted that article, RTTNews and RadioInk managed to get Lew Dickey, CEO of Cumulus, to do an interview on the subject:
“We believe that the time was right,” Dickey stated, noting that assets are far cheaper than they were even three years ago. “The industry is in essence, peak to trough, taken about a 30 percent reset, and so consequently we believe that now is a good time to be in the market looking for good, quality properties.”
It’s great to see positive activity in this sector. I think we are all sick of the endless stream of woes generated by our national economic ills. It signifies something positive both within the radio industry and for the economy as a whole, at least in my opinion. After all, this is being made possible by a partnership with Crestview Partners, a private equity fund that specializes in media investments. I doubt they would become involved to the extent that they have committed themselves if it did not seem a worthwhile investment.
Asked about his outlook for the economy and how he was able to convince Crestview to make such a sizable investment, despite the overall caution of many lenders, Dickey said that over the next five years, the economy will see growth, with retail sales and local advertising following suit. Meanwhile, he sees radio as having a good chance to increase its share of local advertising, due, in part, to the dwindling readership in other mediums.
Obviously Crestview finds this a good bet, roughly $500 million worth of one. RTTNews reports in that same article that most of the proposed acquisitions will be in the Top 50 and Top 100 markets, areas in which Cumulus is currently weakly represented.
So what do you think about this upcoming wave of acquisitions?