Key Points
- A federal judge approved Cumulus Media’s reorganization plan, allowing the broadcaster to exit Chapter 11 bankruptcy as early as May with a new private ownership structure.
- The restructuring will eliminate $592 million to $660 million in debt and reduce annual cash interest obligations by approximately $49 million through creditor control transfer.
- Cumulus CEO Mary Berner and CFO Frank López-Balboa will remain in their roles, with a new board selected by creditors upon the plan’s effective date pending FCC approval.
Cumulus Media is moving swiftly toward an exit from Chapter 11 bankruptcy after a federal judge approved the company’s reorganization plan, setting the stage for a debt overhaul, new ownership structure and continued leadership under its current executive team.
In a court order spanning more than 180 pages, the U.S. Bankruptcy Court for the Southern District of Texas outlined the final steps in the broadcaster’s restructuring, which will shift control of the company to its creditors and position it to emerge as a privately held entity. The decision follows a 48-minute hearing in Houston, where Bankruptcy Judge Alfredo R. Pérez overruled objections from the U.S. Trustee and signed off on the plan less than six weeks after the company filed for bankruptcy protection.
With court approval now secured, Cumulus said it is targeting an exit from bankruptcy as early as May, pending regulatory clearance.
The expedited timeline was made possible by a prepackaged restructuring agreement filed in March, which had already secured broad support from key creditor groups, including asset-backed lenders and holders of secured and unsecured debt. That early backing allowed Cumulus to move quickly through the bankruptcy process with minimal disruption to operations.
Under the approved plan, the company will eliminate roughly $592 million to $660 million in debt, depending on how claims are finalized, and reduce its annual cash interest obligations by approximately $49 million. Lenders have also committed up to $100 million in new capital to support the business following its exit from bankruptcy.
Ownership of Cumulus will transfer almost entirely to its creditors. Holders of secured 2029 claims, totaling about $168.6 million, will receive 95% of the reorganized company’s new common equity, along with $50 million in exit convertible notes. Other debtholders, including those holding 2026 notes, term loans and deficiency claims amounting to roughly $494.5 million, will receive the remaining 5 percent stake. Existing shareholders will be wiped out under the plan and receive no recovery.
The restructuring also calls for the formation of a new board of directors, selected by key creditor groups, which will assume control upon the plan’s effective date. That transition cannot be completed until the Federal Communications Commission approves the transfer of control of Cumulus’ broadcast licenses, a required step for radio station ownership changes.
Cumulus operates a nationwide portfolio of radio stations, including major outlets like KNBR in San Francisco and WSSX in Charleston, South Carolina, along with its national syndication arm, Westwood One. The company confirmed that its existing audio rights agreement with the National Football League will remain in place without modification under the restructuring.
Leadership continuity appears likely, at least in the near term. Cumulus CEO Mary Berner and Chief Financial Officer Frank López-Balboa are expected to remain in their roles, having signed new employment agreements that extend through at least the end of 2026, though the newly constituted board will ultimately have oversight authority.
“When we initiated this prepackaged restructuring in March, we did so with a clear objective: to right-size our balance sheet to support long-term success,” Berner said in a statement emailed to The Desk on Wednesday. “The court’s prompt approval of our plan keeps us firmly on track to eliminate approximately $600 million in debt and positions us to emerge with a significantly stronger financial foundation. We look forward to completing the restructuring and emerging as a well-capitalized company, better equipped to compete in the evolving audio landscape.”
Some legal and regulatory matters were addressed as part of the proceedings. SoundExchange secured carve-outs preserving its statutory royalty audit rights for the 2017 through 2022 calendar years, with applicable time limits paused during the bankruptcy. Meanwhile, the court rejected concerns from the U.S. Trustee regarding provisions that could have shielded certain stakeholders from future litigation.
Additional information about the Cumulus restructuring is available on a web portal established by Verita Global.
