Cumulus Media Exits Bankruptcy, Handing a Stake to Alden Global Capital

Cumulus Media Inc., one of the largest owners of AM and FM radio stations in the United States, said Friday that it had completed its financial restructuring and formally exited Chapter 11 bankruptcy protection, eight months after filing a prepackaged reorganization case in Houston. The Atlanta-based broadcaster said in a statement posted to its newsroom that the process wiped out roughly $550 million of debt and that it had secured every approval required to close the case, including sign-off from the Federal Communications Commission, which had to clear the transfer of Cumulus's broadcast licenses to a new ownership group before the reorganization could take effect.

The same announcement, filed with regulators as an exhibit to a current report on Form 8-K, said Cumulus continued to operate normally throughout the bankruptcy, with "no disruption to operations, audiences, or advertisers." The company now operates as a privately held business under its existing management team, with a newly appointed board of directors replacing the one that governed it before the filing.

The numbers

Under the confirmed plan, Cumulus canceled 100 percent of its existing funded indebtedness — about $600 million — in exchange for all of the company's reorganized equity plus $50 million in new convertible notes issued to its former lenders, a swap the company says nets out to roughly $550 million of debt eliminated. It also amended its asset-based revolving credit line to preserve working capital going forward. The company's footprint is substantial: 377 owned-and-operated stations across 84 markets, a national audio network, Westwood One, that feeds programming including NFL, NCAA, Masters and AP News content to more than 7,800 affiliated stations, and a podcast operation that together Cumulus says reach a quarter of a billion people a month.

Chief executive Mary G. Berner, who has led Cumulus since 2015 and steered it through its first bankruptcy in 2017 and 2018, framed the outcome as a foundation for growth rather than retrenchment.

"Emerging with a significantly stronger balance sheet, we are more committed than ever to providing engaging content across our national footprint, serving as a lifeline and voice for the local communities we serve, driving meaningful growth for our advertising partners, and delivering value for our new shareholders," said Mary G. Berner, Cumulus Media's president and chief executive.

How Cumulus got here

Cumulus and a group of subsidiaries filed the prepackaged Chapter 11 case in the U.S. Bankruptcy Court for the Southern District of Texas in Houston on March 4, pursuant to a restructuring support agreement negotiated in advance with a group of its lenders — the now-standard path radio and local-media companies have used to move through bankruptcy quickly rather than fight creditors in open court. Judge Alfredo R. Pérez confirmed the plan on April 15, but the case could not close until the FCC approved transferring control of Cumulus's station licenses from the company's pre-bankruptcy shareholders to the reorganized shareholder group, since broadcast licenses cannot change hands without the agency's consent. That approval came through in late August and was formally recorded in the Wireless Telecommunications Bureau's routine log of license actions in early September, which lists dozens of Cumulus subsidiary licenses moving from the company's "current shareholders" to its "post-reorganization shareholders."

It is Cumulus's second trip through bankruptcy in under a decade. The company previously emerged from Chapter 11 in June 2018, when it shed more than $1 billion in debt after a radio-industry slump driven by falling advertising revenue and competition from digital audio. This time around, the amount of debt at stake was smaller, but the underlying pressures — ad dollars migrating to streaming and social platforms, interest costs rising on legacy loans — were largely the same.

A new owner with a reputation that precedes it

Control of the reorganized company passes mostly to the lender group that held Cumulus's pre-bankruptcy debt, and FCC transfer filings reviewed by trade press show that one of the largest individual stakeholders will be Heath Freeman, president of the hedge fund Alden Global Capital, who stands to hold roughly 32 percent of the voting interest in Cumulus through a holding vehicle called Next Gen Radio Enterprises LLC. Alden is best known not for radio but for newspapers: the firm built a fortune buying distressed print titles, including the Chicago Tribune, the Denver Post, the Boston Herald, the New York Daily News and the Orange County Register, and it has drawn years of criticism from journalists, unions and members of Congress — including letters from Senators Chuck Schumer, Dick Durbin and Tammy Duckworth — over layoffs, shared-content arrangements and real-estate sales at its papers.

That history has made Alden's arrival in audio a point of scrutiny for the restructuring. As part of winning FCC approval, Berner sent a letter to agency chairman Brendan Carr in August committing Cumulus to hold its newsroom staffing levels steady for at least two years, a pledge the trade outlet Radio Ink noted applies specifically to news employees and leaves open what happens to sales, programming and other departments once that window closes.

What happens next

Cumulus will keep trading informally among its new institutional shareholders rather than on a public exchange; the company had been quoted over the counter during the case and is expected to deregister its shares with the SEC now that the plan has closed. Its day-to-day business — local news and talk programming, Westwood One's sports and syndication deals, and a growing podcast slate — continues under the same executive team that ran the company into bankruptcy and back out of it. The open question for employees, advertisers and the roughly 7,800 stations that carry Westwood One programming is whether a debt-light balance sheet buys Cumulus room to invest, or whether Alden's arrival eventually pushes the company toward the cost-cutting playbook it has applied elsewhere in the media business. Berner's two-year newsroom commitment gives an early, limited answer; what the new board decides once that clock runs out will say a great deal more.