Group Files Letter With Justice Dept. In Opposition To Cumulus/Dial Global Deal
October 9, 2013 at 12:47 PM (PT)
A group called CONSUMER WATCHDOG has filed a letter with the Department of Justice opposing the deal by which CUMULUS would acquire DIAL GLOBAL/WESTWOODONE. The group objects to the deal because it would, in their view, create a "clear radio duopoly" alongside CLEAR CHANNEL/PREMIERE.
“This merger would be a tipping point for listeners who already face fewer choices and homogenized content in talk, music and even sports,” said CONSUMER WATCHDOG President JAMIE COURT. "A takeover of DIAL GLOBAL by CUMULUS will fully corporatize content in the top 100 markets and kill what remains of truly local radio."
The letter, signed by COURT and Emeritus Director of Research JUDY DUGAN, said, "This proposed merger is unlike the merger of other private corporations because Cumulus does not and cannot own its most valuable asset, space on the airwaves," the latter being a "public asset to be used for the 'public interest, convenience or necessity'... The public interest to be protected is not the price of listening but the public usefulness of radio.
"The chief beneficiaries of the proposed DIAL/CUMULUS merger would be the numerous hedge funds and investment banks that effectively control the companies. CUMULUS owes interest of $200 million a year, more than twice its annual earnings, to the owners of its $2.6 billon in debt. DIAL is controlled by OAKTREE CAPITAL and the GORE GROUP, its chief debt holders. These investors are eager for the merger: CUMULUS’ sale of stations will pay off the hedge funds. CUMULUS debt holders also await 'synergies' that will increase the funds flowing to sustain CUMULUS’ debt.… Hedge funds and the CEOs who abet them too often strip a private company of its human assets and walk away rich. Their role in radio has weakened the public benefit of local radio with homogenized national programming. A DIAL-CUMULUS merger will intensify this flattening of the radio landscape."