Cumulus Media is the latest radio group to consider selling its towers to reduce debt. Company CEO Mary Berner said last week the broadcaster is pondering “strategic alternatives” for its 250 tower sites across 32 states, reports Inside Radio.
Typically, radio companies lease back the site after a sale because they still need the tower to transmit their signal.
Cumulus considered selling its towers in 2017, before filing Chapter 11, but “stick” prices have since gone up.
During an earnings call, CFO John Abbot said, “We’re at a very early stage in our exploration, and we expect to be working through the possibilities over the next couple of quarters.” He didn’t offer a timeline for a potential deal.
The broadcaster has been selling assets since emerging from bankruptcy last June and has reduced its debt by $275 million, notes Inside Radio.
Michael Kupinski, Director of Research at Noble Capital Markets, pegged the Cumulus tower value in the $125 million to $150 million range in a report titled: “A Towering Opportunity.” A potential tower sale would produce more cash to help Cumulus pay down more debt. It wants to reduce that debt to about four-times debt to cash flow by year-end 2020, according to the account.