We all knew it was bound to happen— On Cumulus CEO Lew Dickey’s 9/3/13 conference call regarding the Dial Global (now WestwoodOne) acquisition, he mentioned that they’re acquiring a “leading provider of premium and exclusive content and it creates an attractive platform for us now for both content creation, distribution and monetization of these various assets. It’s about $40M of estimated cost synergies and substantial incremental revenue growth opportunities.”
So consolidating WestwoodOne and Cumulus Media Networks was only a matter of time. Not long ago, we saw layoffs in Dallas and New York on the Cumulus Media Networks side. On 6/26/13, we reported VP/Research Martha Luszcz was let go in NYC, and in Dallas all of the marketing division was let go, including VP/Marketing Omar Thompson and his team including Will Montgomery, Alex Kalkwarf and a few others. They handled affiliate advertising, marketing, trade advertising and conferences.
So yesterday (1/30), workforce reduction started at both Cumulus and WestwoodOne. NYC and Dallas took the biggest hits, with some 10 folks being laid off (some are now telling us 30 was the total) with severance packages. Benefits cut off at the end of the month plus 4 weeks’ severance pay.
They include:
–Eileen Decker, Westwood One EVP/Eastern Director—NYC. She had been with Dial Global for years before the merger with Cumulus.
–Dave Boretti, WWO Senior Vice-President of Hispanic Initiatives. He was hired in April 2013.
–WestwoodOne Chief Marketing Officer Christina Albee, brought in by former WWO CEO Paul Caine.
— WestwoodOne SVP/Research Paul Bronstein. He spent years at the original WWO, then moved over to Dial Global after that merger.
“The rest mostly fall under the sales umbrella (on paper), though sales is not necessarily the specific job function,” we heard from one source. “They’re cutting from both Westwood and Cumulus.”
More intimately, we’ve heard the Cumulus/WWO team worked out the most efficient and effective staffing structure. They had a few dozen duplicative positions, so the guys collaborated on both sides to select the best team – very similar to what happens in an in-market station consolidation. On the benefits and severance, it was a formula based upon length of service.
RBR-TVBR observation: We’ve said it before—the Dickeys are very well liked on Wall Street. They are experts in acquiring properties, vertically integrating them and finding cost savings to maximize profitability. The cuts on 1/30 were expected and they dovetail with the cuts Cumulus had made last summer with its own staff. It’s sad that these loyal employees lost their jobs, but for radio to be back in good graces with Wall Street, it has to be made profitable and proven to be a good investment. At least in this case, the cuts weren’t made to meet debt covenants or as a Hail Mary move, but to simply remove duplicative functions and maximize the bottom line in a major consolidation.
