Cumulus Media Inc(NASDAQ:CMLS), as a reaction to its rapid southward stock price, announced its intentions of replacing the chief executive of the company. It is the second biggest US radio broadcaster. The company board published a statement that one of the founders of the company, Lewis W. Dickey, will resign from his chief executive and presidential post on October 13. Dickey is slated to be the company's next vice chairman. He is one of the biggest shareholders of the company.
New chief executive
Mary G. Berner is all set to replace the outgoing chief executive. Berner previously worked as MPA chief executive, and at one time headed Fairchild Publications and Readers Digest Association. She is already a Cumulus board member and was on it from May.
The news comes a blow to Dickey family, one of founders of the Atlanta headquartered company in 1997. This family was responsible for the rise of Cumulus to one of the biggest US radio broadcasters with 460 stations spread over 90 markets. The company is the owner of the syndication service, Westwood One and Radio service of streaming music. Its division of Nash country music includes television channels, record label and radio stations. The last few years saw the Cumulus company accumulating a $2.5 billion debt while the stock price fell by about 80 percent.
Cumulus, in 2014, has seen its revenues climb from 2011 with addition of many stations, numbering to the hundreds. Profitability, however, has stagnated. The company has $1.26 billion revenues- almost triple the 2011 era $466 million. The problem lies in the fact that it had a mere $11.8 million net income in 2014, a massive dip from about $176 million in 2013.
Jeffrey A. Marcus, the non-executive chairman of Cumulus, in his statement, praised Ms. Berner. He said that she has already demonstrated the ability to improve the performance of companies and create shareholder value. He perhaps hinted at cutting costs when he mentioned that to maximize the asset value will need to make them work in tandem efficiently and effectively.
It is rumored hat Dickey and Marcus harbor differing opinions about the expense related to content platforms. Crestview Partners, the firm owned by Marcus's firm, manages the funds which own approximately 27 percent of the outstanding stock of Cumulus.
The changes in management seemed to end a dynasty in broadcasting, with Lewis D. Dickey and John W. Dickey, his brother leaving their held positions. The latter Dickey held the executive vice president position.