Citadel Broadcasting

Citadel Broadcasting logo prior to 2007 acquisition of ABC Radio.

On February 6, 2006, Forstmann Little and The Walt Disney Company agreed to merge Citadel with Disney's ABC Radio.[3] Shares representing 57% of Citadel were distributed to shareholders of The Walt Disney Company following the company's acquisition of 22 stations from ABC Radio.

After the merger, Citadel's ownership structure was:

• 57%: Shareholders in The Walt Disney Company
• 27%: Forstmann Little
• 16%: Former Citadel shareholders exclusive of Forstmann Little or shareholders in Disney

ABC owned and operated affiliates of Radio Disney and ESPN Radio were not included in the merger agreement.

In order to comply with FCC ownership limitations, Citadel has sold off 12 of its radio stations. Ten of the stations' licenses have been transferred to a newly formed trust company, The Last Bastion Station Trust, LLC. The two-station Cortland, New York, cluster was sold off prior to the merger in a separate transaction; WIII was sold to Saga Communications and WKRT (now WYBY) has been given to the Bible Broadcasting Network for free as a tax deductible donation.

On June 19, 2008; Arbitron expanded Oklahoma City's market definition allowing Citadel to own five FM stations in the said area, at which time Citadel Broadcasting applied to re-acquire KKWD from The Last Bastion Station Trust, LLC with the Federal Communications Commission (FCC). According to FCC documents, KKWD was re-absorbed into Citadel's station portfolio on July 9, 2009.

On April 2, 2009; the staff of Citadel Broadcasting changed the name of "ABC Radio" to Citadel Media to reflect on its ownership of the major network.[4]

In addition to Citadel Media, Citadel owned the Arkansas Radio, Tennessee Titans Radio, Buffalo Bills and the Michigan Talk radio networks.

On March 1, 2008, the former Disney/ABC Radio stations in Citadel's portfolio faced severe financial problems. That same period, hundreds of personalities were dismissed as some stations over time changed formats—most notably to ABC Radio's in-house satellite network The True Oldies Channel.

On September 12, 2008; Citadel Broadcasting has received a notice from the New York Stock Exchange (NYSE) warning them that they will be facing a delisting after the company shares fell below the continuing listing criteria in the past 30 days.[5] On February 27, 2009, the NYSE carried out that action. After an IPO of $20.67 in August 2003, and a high of $22.70 in December 2003, CDL closed at $0.01 on March 6, 2009.[6] Delisting happened on March 5, 2009.[7]

Since the delisting, the staff of Citadel Broadcasting ceased holding conference calls and would no longer issue quarterly guidance. But the 10-Q filed May 7, 2010 at the U.S. Securities and Exchange Commission (SEC) indicated that Citadel expected to remain in compliance with lender covenants through 2009. Given the conditions, it was unlikely that the company would meet the benchmarks it had to hit in 2010, starting January 15 of that year. Citadel was carrying $2 billion in debt following the June 12, 2007 deal with Disney for the ABC Radio properties.[8] Overall, Citadel's revenue fell almost 23%.[9]

In a quarterly SEC filing, the company disclosed the possibility of a Chapter 11 bankruptcy. The company, in the filing, says that it "does not expect to meet its covenant requirements under the Senior Credit and Term Facility as of January 15, 2010." The Wall Street Journal reported that Citadel worked on a "prearranged" bankruptcy package in which lenders would get ownership of Citadel in exchange for forgiving about $2 billion of the company's $2.76 billion-dollar debt.[10] The filing began on December 20, 2009.[11]

During that period, its senior lenders took 90% of the equity, and the re-structuring approved by a Manhattan federal bankruptcy judge is now complete. The company's debt was reduced from $2.14 billion to $762.5 million, and the broadcaster was poised to be an acquirer as well as an operator.[12]

On December 11, 2009, The Wall Street Journal reported that Citadel planned to file for bankruptcy by the end of the month,[10] and Citadel filed for bankruptcy nine days later.[13] It emerged from bankruptcy in June 2010, owned by its lenders, the Dallas hedge fund R2 Investments, JPMorgan Chase and the buyout firm TPG.

Months after Citadel Broadcasting emerged from bankruptcy, it was approached by Atlanta-based Cumulus Media with two unsolicited merger offers, both of which Citadel rejected.[14] Then in February 2011, CNBC reported Cumulus was in "exclusive negotiations" to acquire Citadel. This third offer would be worth $2.5 billion to Citadel shareholders, some of whom were said to have already been pushing the board to consider a sale.[15]

On March 10, 2011, Citadel Broadcasting announced via email that it had been purchased by Cumulus Media in a deal worth $2.4 billion.[16] Some of the Cumulus or Citadel radio stations would, however, have to be transferred into a trust to comply with the FCC's ownership limitations, especially in those markets where Citadel already had a "grandfathered" over-the-limit station group.[17] Ultimately these included WELJ in Montauk, New York and WCAT-FM in Carlisle, Pennsylvania, placed in a trust operated by Scott Knoblauch.

Cumulus Media's purchase of Citadel became final on September 16, 2011.[18]