CITADEL: Going Going Going...Gone

          Citadel was founded in Phoenix, Arizona in 1984 as Citadel Associates Limited Partnership, known as CALP with the purchase of two radio stations. Throughout the next few years, CALP merged with Montana Limited Partnership, CAMLP in order for Citadel to own and operate stations in Montana.  Following that merger, Citadel Broadcasting Company was incorporated in Nevada and Citadel bought all the radio stations run by CALP and CAMLP to keep growing their company. 

Citadel Communications under the name Citadel Broadcast Corporation was formed. 

Once the Telecommunications Act of 1996 was passed, enabling ownership limits to be raised in single markets, Citadel invested over $1 billion to acquire more than 170 radio station in the late 90’s. Citadel Communications (Citadel Broadcast Corporation) was the third largest all radio company in the United States that reached over 50 markets. Citadel had 66 AM stations and 177 FM stations in the nation’s leading markets as well as owning the Citadel Media Business.

            Expansion of Citadel continued in the Midwest and throughout the South costing millions of dollars per acquisition.

 The revenues were at the company’s record high, but the net loss was unrecoverable, likely due to the fast expansion of their business. Hoping to improve the large amount of debt they acquired, they continued to expand, and bought the radio division of Disney, ABC Radio in 2006. Disney’s ABC radio consisted of 22 large market radio stations and the ABC Radio Network. This particular purchase gave Citadel its first major market presence.  The hopes of larger market advertising deals meant higher revenues to be expected.  Due to the recession and a variety of factors, advertising was low and Citadel was too far in debt to recover. Despite their efforts to consolidate head count in many markets in order to increase revenue, the expenses aligned with all of these stations exceeded its operation income causing the inability for Citadel to be profitable.  They had taken on billions of dollars by acquiring ABC Radio causing them file for bankruptcy.

            Citadel continued to plug away at their efforts to turn the business around and ultimately Citadel Broadcasting Corporation was bought by Cumulus.  

This particular acquisition made Cumulus Media the largest all radio company in the United States owning 570 radio stations in 120 markets along with a radio network that serves over 4,000 stations. Cumulus is the top provider of local marketing solutions in the nation. Competing with other media giants such as CBS Radio, Bonneville and Clear Channel, Cumulus remains to be the only pure radio company in the industry.

            Regarding operations of such radio groups, there is a vast difference between the media giants and the independent “like” run radio stations.  The ABC Radio division of Disney for example was simply an item line on their annual report.  Since Disney is primarily an entertainment company, the radio division was more of a stepchild, which left room for ABC Radio executive management to run their stations without any corporate dictatorship, as if they were independently owned. The benefits mirrored those of Disney employees, generous, and the belief that the highest level of customer service led to winning was the norm.  I spoke with an ex-employee of ABC Radio and Citadel and another ex-employee of Cumulus, both from the sales departments of the stations. They shared that the transition to Citadel was like night and day. The family friendly environment of ABC Radio, and longevity of careers that were fostered in the healthy working atmosphere, were all comprised upon the acquisition of Citadel.  Roles and responsibilities changed, staff was reduced and expectations were closely managed and disciplined at the expense of experience and earned reputation. The person who worked for Cumulus expressed that their sales philosophy is micro-managed in a cookie cutter kind of manner in that all Cumulus stations sales departments are trained, and accountable in the same way throughout the country. There was not room for showcasing strengths or individuality, preventing employees from growing their careers through their own personal goals.  Mergers and acquisitions have changed the way media companies operate, but as the industry continues attempt to maintain market share in such a competitive media landscape, working environment in my opinion, is key to generate the most productivity and success.