Cumulus seeks to end contracts with Merlin Media, Bulls, White Sox

Chapter 11 forces company to dump pricey agreements.

At last, I can sum up the sorry state of Chicago sports AND Chicago radio all in one post.

In news breaking Friday and first reported by Robert Feder, Cumulus announced it was seeking to get out of money-losing contracts of the Chicago Bulls and Chicago White Sox in a filing with the bankruptcy court as the Atlanta-based company is in Chapter 11. This is part of a larger restructuring plan by Cumulus who also wants to nullify a deal to buy classic rock WLUP-FM (The Loop) and alternative rock WKQX-FM from Merlin Media, which it has been operating under a local marketing agreement since 2014.

Cumulus owns WLS-AM and FM, both formerly owned by ABC Radio until its sale in 2007.

This means…yes, Randy Michaels – who teamed up with financial investor GTCR (once run by now-Illinois governor Bruce Rauner) to form Merlin Media – could retake control of both stations. As those of you know, Michaels bought WLUP and WKQX in 2011 and flipped the latter station to an all-news format, with unsuccessful results.

Merlin also bought stations in New York and Philadelphia, only to sell them shortly thereafter.

It was revealed in a filing Cumulus was seeking to terminate several contracts. In addition to Chicago’s two sports teams, Cumulus is looking to withdraw agreements with the NFL’s Buffalo Bills and Seattle Seahawks, and a Westwood One/CNBC deal. Cumulus has claimed since the start of the LMA with Merlin, they lost more than $8 million – with the greater losses coming in 2017. Cumulus exercised an option to buy the stations last year, giving them four in the Chicago market, in addition to WLS-AM/FM. The FCC has yet to approve the deal.

In an interview with the Chicago Tribune, Michaels said he is ready to step in and re-take operations of the stations. It would be business as usual and the stations would continue to be based at the NBC Tower, where they relocated last year with Cumulus’ other two stations. A bankruptcy judge will decide on Cumulus’ petition on February 1.

Cumulus filed for Chapter 11 bankruptcy on November 29; Merlin Media opted to sell the stations last October. It is not known if Merlin plans to keep the stations or sell them to someone else if the Cumulus deal falls through.

As for the Bulls and White Sox, WLS’ decision to drop the two struggling teams are a huge blow. Both are owned by Jerry Reinsdorf, and are usually packaged together in any media deal. If the bankruptcy judge agrees to Cumulus’ requests, both teams could lose their radio homes on February 1, forcing the Bulls and the White Sox to find new outlets quickly.

Many have criticized WLS-AM’s coverage of Reinsdorf’s teams, a deal struck in 2015 with a six-year deal. The teams were never a good fit for the station, which shifted back to a conservative talk direction earlier in the year. The teams received little promotion or fanfare on the station.

Merlin Media could operates WLUP and WKQX again if a deal with Cumulus isn’t reached.

The impact could be more pressing for the Bulls, who could be off WLS on the 1st – right in the middle of the season. It’s a situation that would be unthinkable two decades ago as the Bulls were a dominant team in the NBA under Michael Jordan. Since he left, the team has been one of the least successful franchises in the league, with only a handful of playoff appearances. Despite a better-than-expected season, the Bulls have been criticized for their management decisions under John Paxson and Gar Forman.

Television ratings for the Bulls on NBC Sports Chicago have been flat from last year (2.0), but still trail the Chicago Blackhawks, who have their own ratings woes due to a lackluster season.

Cumulus’ decision-making process is just as bad as the Bulls. The company staged a phony morning show-host contest a few years ago only meant to install Mancow Muller. And recently, they re-hired Marv Nyren as vice president and market manager, split up their popular morning show at WKQX and reassigned someone to run the station’s social media accounts as their “digital content captain”.

And you wonder why Cumulus is in Chapter 11.

So in all, Chicago sports (Cubs excluded) and radio is general, are pretty much one in the same. You’d think they deserve one another but this failed marriage, even pairing up the worst-run companies in America didn’t yield any successful results. Given it was Cumulus and Reinsdorf’s teams, no one should be surprised. With people like Paxson, Forman, and Nyren around, you can’t go broke.

But Cumulus somehow did.

Unusual radio homes

While the Cubs and Bears have always enjoyed coverage on 50,000-watt clear channel AM blowtorches, this wasn’t always the case for other Chicago sports teams. Case in point:

– After a 56-106 record in 1970 and very low attendance at Comiskey Park, WMAQ-AM dropped the Chicago White Sox and the team’s games shifted to WTAQ-AM (now WRDZ-FM), a 500-watt station in west suburban LaGrange during the 1971 and 1972 seasons. WTAQ carried Spanish-language White Sox games in the 1990s.

– Before Michael Jordan came to Chicago, the Bulls had trouble drawing fans to Chicago Stadium – and drawing radio listeners. During a time when the NBA was also struggling (playoff games were being shown on late-night tape delay during this era), WIND-AM dropped the team and Bulls games wound up on then-urban contemporary WVON-AM (1390) during the 1980-81 season – one where the Bulls actually made the playoffs. Now on 1690 AM, WVON once again could be a logical home, albeit temporary, if Reinsdorf decides to split the package up.

– Similar to the White Sox’s struggles in the late 1960s, the Blackhawks also had trouble attracting fans at one point. The team was so bad in the early 2000s, they were unable to strike a rights deal with a Chicago radio station and were forced to eschew one and bought time on WSCR-AM (The Score) to get their games on the air.

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