Cumulus Media, the second-largest operator of U.S. radio stations behind IHeartMedia, replaced company co-founder Lew Dickey as CEO after an 84% drop in the stock price this year, naming longtime magazine publishing executive Mary Berner to replace him.
Mr. Dickey will remain on the board as vice chairman, according to a statement on Tuesday. Ms. Berner had been CEO of the trade group MPA, The Association of Magazine Media. From 2007-2011, she was CEO of Reader's Digest Association. Earlier she was publisher of magazines such as TV Guide and Glamour, and president-CEO at Conde Nast's Fairchild Publications.
Under Mr. Dickey's leadership, Cumulus built a network of 460 stations in 90 cities, invested heavily in country music and acquired companies including the radio syndication network Westwood One. Revenue grew to $1.26 billion last year from $263 million in 2010, according to data compiled by Bloomberg.
But profit hasn't kept pace, long-term debt ballooned to almost $2.5 billion in June from less than $600 million in 2010, and the company has been plagued by operational issues. The integration of Westwood One, acquired in December 2013, has been particularly bumpy.
"Operations at Cumulus have clearly been hit hard over the past few quarters and were adversely impacted by a fall-off in demand for radio advertising, as well as the apparent chaotic operating environment at Westwood One," KDP Investment Advisors analyst Spencer Godfrey wrote in an Aug. 3 research note. He said then that management was trying to stabilize operations.
Ms. Berner's experience turning companies around companies and generating ad revenue across platforms show she can build value for shareholders, Cumulus Chairman Jeffrey Marcus said in the statement. Mr. Marcus is a partner at Crestview Partners, which holds about a 27% stake in Cumulus.
Ms. Berner left Reader's Digest Associaiton in 2011 after a four-year run that spanned the national recession. Her tenure saw the company file for Chapter 11 bankruptcy protection in 2009 and emerge in 2010, exit its iconic headquarters in Pleasantville, N.Y., win a 2009 National Magazine Award for General Excellence for its flagship title, and reorganize around affinities such as food, health and home in a bid to better appeal to advertisers. Upon her exit she told Ad Age her job at the company was done but that her vision and the ownership's was likely to diverge ahead. It filed for Chapter 11 again in 2013.
At the MPA, Ms. Berner increased the emphasis on magazines as brands rather than ink-on-paper products, whose ad page were often declining and newsstand sales were plunging. She did away with the group's traditional release of ad-page figures, in fact, arguing that their continued ebb did not represent the health of the industry among readers.
Hits Daily Double and the New York Post reported on Mr. Dickey's departure earlier Tuesday.
-- Bloomberg News with Ad Age staff