In 1997, Lewis W. Dickey Jr. co-founded Cumulus Media, the No. 2 owner of radio stations in the U.S.
In June 2000, the man who goes by “Lew” took the reins as CEO, leading the company to rapid growth. In an April 2014 RBR + TVBR report, it was noted that Cumulus created $1.2 billion of shareholder value. A major refinancing had just been completed, two Chicago FMs were brought in to the family from Merlin Media, and NASH country music lifestyle brand had just been launched to great fanfare.
Three years later, the company has a new CEO, Mary Berner, who says Cumulus entered 2016 with a singular objective: “to fix the core business problems – poor culture, poor ratings and poor operational execution – which was essential to establishing a foundation on which to build improved financial results.”
Just 55 minutes after Thursday’s Opening Bell on Wall Street, Cumulus shares tumbled another 10%, to 37 cents a share.
With Cumulus’ high leverage still a tremendous burden, a debt for equity deal that would have sliced $305 million off of its borrowings no longer happening, and “debt bomb” discussions still rampant among media brokers, Dickey still had a presence with Cumulus, as Vice Chairman of the Board of Directors.
On Monday, that role was relinquished, as Dickey made a quiet and official departure from a company he helped build through the completion of nearly 150 individual station transactions.
In a form 8-K filing with the U.S. Securities and Exchange Commission filed late Wednesday, Dickey notified Cumulus that he was resigning from the board. Why? The reason stated is simply “to pursue other professional interests.”
While Lew Dickey’s exit marks the end of his involvement with the company, the Dickey family retains a strong relationship with Cumulus. A Sept. 2011 stockholders agreement codified by Cumulus, the Dickeys and Crestview Radio Investors — made in connection with the completion of Cumulus’ acquisition of Citadel Broadcasting — allows one member of the Dickey family to hold a seat on the board of directors. Thus, with Lew Dickey’s departure, the family has the ultimate decision on who would replace him.
Lew’s successor on the board is his brother, John Dickey.
John Dickey served as Cumulus’ EVP/Content & Programming until late September 2015, when Lew Dickey was replaced by Berner.
Radio industry leaders were gathered for the first day of the 2015 Radio Show in Atlanta when word emerged that the Dickey brothers had been “forced out” and “fired.” Veteran Chicago columnist Robert Feder, among other radio industry journalists, was particularly vicious in his coverage. “Not one of the many radio executives I spoke to here lamented the demise of the Dickeys,” Feder wrote. “Most said their overthrow was long overdue. Based on the misguided management, programming and personnel moves they made in practically every major market they ran, it’s easy to understand the air of schadenfreude. In short, these guys weren’t just bad for their company. They were bad for radio.”
The departure of Lew Dickey may not have a material impact on the voting power that the Dickey family will continue to have with respect to Cumulus’ ongoing business activities as approved by the board of directors.
Lew Dickey held 13.5% of the company’s voting control as Cumulus’ vice chairman. While the 8-K filing did not state that John Dickey would hold this title or assume this percentage of voting control, it is expected to be a turnkey transition.
Crestview holds 29.4% of the voting power, and one of Crestview’s designees to the board under the Sept. 2011 stockholder’s agreement also resigned on Monday.
Brian Cassidy, a partner at Crestview, stepped down “due to his other professional commitments.”
Succeeding Cassidy on the Cumulus board is Ross Oliver, who was also appointed as a member of the board’s Audit Committee. Oliver serves as Crestview’s general counsel and is responsible for the firm’s legal and compliance functions.
