Company history

The Early Years

The company was started in August 1998 by radio consultant Lewis Dickey Jr. and media and technology entrepreneur Richard Weening. The Telecommunications Act of 1996, among other things removed restrictions on the number of radio stations a single owner could control in a market and overall. Dickey, then a nationally known radio programming consultant, was acting as a consultant to a small radio group in which Weening had a personal investment. Dickey and Weening joined forces around Dickey's idea to acquire and operate radio stations in mid-size markets where giant Clear Channel was not focusing. Dickey was the radio expert and Weening was the corporate finance and start-up CEO. Dickey was President of Stratford Research his radio consulting firm ^[7] and also president of his family company, Midwestern Broadcasting with two stations in Toledo, Ohio which would later be acquired by Cumulus. Weening had successful experience as a start-up CEO in book and magazine publishing, online services and enterprise software systems. He was then CEO of QUAESTUS & Co., Inc., a private equity firm specializing in media and technology start-ups. A student of classics, Weening came up with the name Cumulus ^[8] which means "accumulation" in Latin and best described Dickey and Weening's plan to acquire stations in 50 or more markets. QUAESTUS provided the seed capital to make the first station acquisitions as a model for the Cumulus strategy.^[9]
The next significant milestone was a $50 million investment from closely watched and highly respected State of Wisconsin Investment Board (SWIB) [[^[10]]] previously an investor in Weening's magazine publishing company. Full scale operations started on May 22, 1997. Weening assumed the role of Executive Chairman focusing on acquisitions deal structuring, corporate finance and internet from headquarters in Milwaukee, Wisconsin. Dickey selected stations to buy and oversaw radio programming, operations and strategy as Executive Vice Chairman. Dickey brought in highly regarded radio operator William Bungeroth to serve as President of Cumulus broadcasting from new offices in Chicago's Hancock Center. Bungeroth had a reputation as an advertising sales leader. He would oversee market level tactical execution including the integration of newly acquired stations into market operating units. John Dickey, Lew's brother and himself an experienced programming consultant would oversee station content.^[11][12]
SWIB's investment was soon followed by another $50 million from Wisconsin-based Northwestern Mutual Life Insurance Company and $25 million from NationsBank Capital Corporation. Financial backing secured, Dickey and Weening set out to acquire radio stations working hard to stay as much "under the radar" as possible not wishing to attract notice or competition. In the first 12 months Cumulus acquired over 100 stations in 31 markets.^[9] Almost as soon as the acquisition spree started it was clear the Company would require more than a billion dollars for acquisitions in its sights and plans were laid for a public offering.
The Cumulus strategy as articulated in public filings was to acquire multiple stations in a city or market, consolidate them physically to share a common infrastructure to reduce operating expenses but enrich programming giving each stations a unique music format, live programming, brand and target audience. The central idea was to create a cluster of radio stations that could compete with newspapers by offering advertisers a range of target demographic choices comparable to the range of content sections in print. At the time, newspaper display and classified advertising claimed the largest share of local advertising dollars. By offering a range of audiences like newspapers. Cumulus could gain more share of the local advertising dollar than the individual stations could garner on their own. In addition, acquiring the top performer stations in the market as part of the operating cluster would get more national advertising. The market focus would be those deemed to offer substantial growth opportunities and the station focus was leader station in the market and stations well position for significant growth ^[13]