Cumulus Media, the nation’s second largest radio company with 446 stations spread across 90 markets, announced Wednesday night that it has filed for Chapter 11 bankruptcy protection as part of a structured agreement with lenders.
The Atlanta-based firm said it hopes a Restructuring Support Agreement, or RSA, with lenders will reduce its debt by more than $1 billion. According to the Atlanta Journal-Constitution, the company has been weighed down by debts since its 2011 acquisition of Citadel Broadcasting.
In its announcement about turnaround efforts, Cumulus said it has “ample cash on hand” to carry on with normal programming during the restructuring process. Mary Berner, the company’s president and CEO, remarked that progress has been made over the last two years, including increased ratings, market share gains and a return to year-over-year revenue growth, but that “he debt overhang left by previous years of underperformance remains a significant financial challenge that we must overcome for our operational turnaround to proceed.”
Berner continued, “The actions we are taking today to address our balance sheet are a critical step forward for Cumulus. We will use this restructuring process to relieve the financial constraints on our continued progress, allowing us to focus our resources on investing in our business and people to strengthen our competitiveness and ultimately drive growth.”
Debt is also putting the squeeze on iHeartMedia, the only radio company bigger than Cumulus. The San Antonio-based giant, with its 850-plus stations, has debts exceeding $20 billion.