As my plane landed in Atlanta for the Radio Show, I checked my e-mail and saw the breaking news from our own Radio Ink that Lew and John Dickey had been ousted from their positions at Cumulus, though Lew remains Vice Chairman.
Upon arrival at the Radio Show, I encountered many who had an almost jubilant spirit about them, happy to see the changes at the troubled company. Though clearly there were others not celebrating the change, I was surprised and a little taken aback that there were so many people "dancing on the graves" of these two men's careers in radio.
Though I've reached out to Lew Dickey, we've not yet talked and there are lots of rumors floating around — "inside baseball" about the politics on the Cumulus board, which seems to have arranged this during a recent two-week vacation by the CEO.
I'm sad to see the dancing, frankly, but not for the reasons you might think. Clearly, there are people who have issues with the management style of Lew and John, or perhaps some of the decisions they've made — though it appeared to me, as an outsider, that something had changed recently and the company was making some great progress and some great hires. It was hard not to be in favor of their bringing in people like Pierre Bouvard and Dennis Green.
No one wants to see their own company pulled from their control. I've been through it myself: I was CEO of a venture-funded company, and I was fired and a new CEO put in my place. Little did I know that the CEO was a specialist in bankruptcies; I later learned the investors were doing me a favor and saving me from the headache of bankrupting a company I had put my heart and soul into building. Could this be the case with incoming CEO Mary Berner, who seems to have some bankruptcy experience as part of her very impressive resume?
It's easy for some to celebrate the demise of someone they have gotten into the habit of demonizing, and many have demonized executives at radio's biggest companies for cost cuts, personnel cuts, and the removal of live and local programming in favor of automation. And of course, many in our industry want things to return to "the way they used to be" and have never much liked the way things have become. I can't blame them. I'm not a big fan of what a lot of radio has become either. Yet I'm not sure what I would do in if I were in the shoes of a CEO who is running an overleveraged radio company – a company with just with too much debt.
I'm also sensitive to the fact that these guys, like them or not, built that company to what it is from scratch. They moved at lightning speed to accumulate stations and had to deal with the difficult issues of merging cultures, developing systems, and finding a way to manage everything they had. When you stop and think about what they accomplished in such a short time, it is pretty amazing, especially the way they managed to financially maneuver the company to its current size.
Still, many in the industry were bothered by how some of the biggest properties in the world saw meteoric drops in revenue because top-tier managers and sellers were either pushed out or resigned, or because programming changes meant ratings took a nosedive. It's easy to be critical when some legendary properties appear to be being mismanaged.
Frankly, if I were Cumulus Chairman Jeff Marcus or a board member, I'd be asking myself if I was willing to hang with the status quo, especially as I saw a dismal fourth quarter on the horizon across all of radio. But it's easy to be an armchair quarterback.
What concerns me most about this "dancing on the graves" is that this event is a giant signal about the state of a big portion of our industry. It's a signal that a prepackaged bankruptcy for radio's second-biggest company may be on the horizon and that the investors will be taking a haircut to save the company. Shareholders have been running like scared rats, driving Cumulus' value down even further. Sadly, this will be all over the press, and they will be telling the story of a radio industry that consolidated, is overleveraged, and is seeing revenues falling. Some will go so far as to declare that radio is dead.
Of course, this move also may embolden others who are likely to be forced into bankruptcy as revenues slide to go ahead and make the decision. Even without that, all of radio will be painted with the same brush by the media and possibly by advertisers, even though most companies don't have the same kind of financial woes as Cumulus. What will this do to other radio companies on Wall Street? Will this send shareholders scrambling to get out of radio entirely?
My fear is that the falling of this big domino will have an effect across the rest of the industry. That alone is a good reason not to be dancing on any graves. Whether or not you're a fan of the Dickey brothers, and whether or not this was the right decision from the board, this may impact us all.
Because of the depth of Cumulus' markets, this story will have the attention of advertisers everywhere. Some will make it a story about Cumulus, others will make it a story about the radio business, and still others will talk about how radio has not kept up. This is a time when every team needs to be ready with answers, and a time when radio needs to be rallying behind new technologies like programmatic and digital — first, to show you're not living in the 1990s, but also because we as an industry will benefit from embracing these things and the new revenues they can bring.
Having been a CEO who lost his company, I can say it's not a fun experience. I don't wish it on anyone. Whether or not you were a fan of Lew or John, dancing on their graves, particularly in public, isn't really in radio's best interest. They did the best they knew how to do, and, like most who end up in this position, they took the money offered and bought the properties with the blessing of investors who believed they would walk away ahead of the game. It's become clear that radio, now a major consolidated player, might be better off with enough stations one CEO can control and manage, and no more.