| Industry | Radio Broadcasting |
|---|---|
| Fate | Acquired by Cumulus Media |
| Founded | 1984 |
| Defunct | September 16, 2011 |
| Headquarters | Las Vegas, Nevada, USA |
| Area served | United States |
| Revenue | US$719,760,000 (2007) |
Citadel Broadcasting Corporation was a Las Vegas, Nevada-based broadcast holding company. Citadel owned 243 radio stations across the United States and was the third-largest radio station owner in the country. Only Clear Channel Communications and Cumulus Media owned more stations prior to Citadel's merger with Cumulus.
On March 10th, 2011, Cumulus Media announced that it would purchase Citadel Broadcasting. After receiving conditional regulatory approval from the Department of Justice and the Federal Communications Commission, the deal was approved by Citadel shareholders on September 15, 2011. The merger of the two companies closed on September 16, 2011, and Citadel became an indirect wholly owned subsidiary of Cumulus Media.
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The company was founded in 1984 in Phoenix, Arizona by Larry Wilson as Citadel Associates Limited Partnership. In 1990 it was renamed Citadel Associates Montana Limited Partnership for the purpose of owning and operating stations in Montana that were formerly owned by CALP. A year later, Citadel Broadcasting was officially incorporated and in 1992 it acquired all of the radio stations owned by its predecessors. Within a decade, Citadel expanded to 26 states. Within that time period, it absorbed all Bloomington Broadcasting radio holdings and 11 stations from Dick Broadcasting Company and also acquired 3 radio stations from Slone Broadcasting, Inc. and Slone Radio, LLC. In 2001, Larry Wilson sold Citadel to private equity firm Forstmann Little & Company for $2.1 billion. By that time, the company had grown to 205 stations in 42 markets.[1]
Citadel Broadcasting launched an online service called Citadel Interactive in 2005, and a year later launched Right Now Radio. By July 2007, more than 180 of their stations were streaming online.
On February 6, 2006, Forstmann Little and The Walt Disney Company agreed to merge Citadel with Disney's ABC Radio.[2] 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:
ABC owned and operated affiliates of Radio Disney and ESPN Radio were not included in the merger agreement, nor were the actual networks.
In order to comply with FCC ownership limitations, Citadel has sold off twelve 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.
However as of June 19, 2008; Arbitron has expanded Oklahoma City's market definition allowing Citadel to own 5 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.[3]
In addition to Citadel Media, Citadel also owned the Arkansas Radio, Tennessee Titans Radio, Buffalo Bills and the Michigan Talk radio networks.
Since October 2007, Citadel has suspended nighttime HD Radio broadcasts on 10 AM stations due to interference complaints. Those AM stations switched their nighttime broadcasts to C-QUAM AM Stereo until Citadel and Ibiquity fix the problems.[4]
On March 1, 2008, the former Disney/ABC Radio stations in Citadel's portfolio faced severe financial problems. That same day, hundreds of personalities were dismissed.
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] its stock now trades on the OTC Bulletin Board.
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 current conditions, it would be unlikely for the company to meet the benchmarks it had to hit in 2010, starting January 15 of that year. Citadel is 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 sliced by two-thirds from $2.14 billion to $762.5 million, and was poised to be an acquirer as well as an operator.[12]
On Dec. 11, 2009, the Wall Street Journal reported that Citadel planned to file for bankruptcy by the end of the month,[13] and Citadel filed for bankruptcy 9 days later.[14] 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 different unsolicited merger offers. Both of which Citadel turned down.[15] In February 2011, Cumulus was said to be in "exclusive negotiations" to acquire Citadel, according to CNBC. The third offer would be worth $2.5 billion to Citadel shareholders, some of whom were said to have been pushing the board to consider a sale.[16] On March 10, 2011, Citadel Broadcasting stations announced via email that Citadel Broadcasting had been purchased by Cumulus. The deal is worth $1.7 billion dollars and is expected to be finalized by the end of 2011, pending Citadel Broadcasting's shareholders' approval.[17] It has been confirmed that some of the Cumulus or current Citadel radio stations will be transferred into a trust due to FCC ownership limitations, especially in those markets where Citadel has a grandfathered over-the-limit group now.[18] Two of its stations WELJ (Montauk, New York) and WCAT-FM (Carlisle, Pennsylvania) are confirmed to be placed in a trust operated by Scott Knoblauch. The deal closed on September 16, 2011. [19]
In early 2007, Citadel Broadcasting filed a lawsuit against Peak Broadcasting, claiming Peak raided its staff and secured company information. Peak operated in the Boise, Idaho market after purchasing six radio stations from Clear Channel Communications. Citadel also owns six stations in Boise. The suit claimed that one of the former Citadel employees stole a computer disk with critical information after asking the Citadel IT person to help him copy information, which Peak then used to compete against Citadel in Fresno, California, as well. Peak has denied the allegations, but the two parties reached a confidential settlement, which included an undisclosed payment to Citadel, according to the Idaho Statesman.[20]
On April 16, 2008, Citadel Broadcasting became the first organization-wide radio company to join the Environmental Protection Agency's "Green Power Partnership Program" and committed US$1 million in Educational Green public service announcements. In April 2008, ABC/Citadel's KGO-AM in San Francisco, California was installing equipment for broadcasing with solar power during the daytime hours.[21][22] The maximum rated output of the solar cells installed at the KGO transmitter site is a little over 7 kW, which under ideal conditions is about 15% of the 50 kW of electricity radiated by the transmitter during daytime hours.[1]