Friday, December 17, 2010

Lew Dickey removed from Farid's Christmas card list

The news today that Citadel has rejected two offers from Lew's Cumulus Media certainly breaths some new life into what has been a very slow station trading year. It also represents the opening act to what will be a fascinating show.

Lew Dickey has plenty of fans as well as detractors. And I’m squarely in the camp of the former. Yes, he’s been a great customer over the years (he bought over a hundred stations through Media Services Group), but there is more to it than that.

Lew is a broadcaster. He was literally raised in the business. He has seen it from all sides (and is probably one of the best researchers ever to serve the industry -- pre-Cumulus). He knows how to run a radio station and is as comfortable doing so in Atlanta sized markets as he is in Savannah sized markets.

And he’s smart. Not just well educated (B.A. from Stanford and MBA from Harvard), but radio street-smart. If he succeeds in his effort to acquire Citadel, he will know what to do with it and how best to integrate the two very different cultures.

I believe that Lew has had his eye on Citadel for a long time. And now that it has emerged from bankruptcy court with a squeaky clean balance sheet, and station prices are at a decade’s low level, what better time?

Plus, Lew never took my stock in his company to zero.

The drama will be fun to watch. If Lew is successful, look for some new station acquisition opportunities in the new year. For one thing, the deal will likely require some spin-offs (in markets where both companies compete). For another, transactions like this have a way of fostering new, unrelated deals. They establish a pricing comparable. Potential buyers and sellers will pay close attention to the multiple on the deal.

Last but not least, Merry Christmas and Happy Holidays to all! Let’s have a prosperous 2011.

Media Services Group

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