Citadel CEO Farid "Fagreed" Suleman deserves all the credit for presiding over a company that a year ago was worth $10 a share and even higher before that.
Some radio people were willing to cut Fagreed some slack because of the faltering advertising market and the recession, but at just a penny -- with a market cap of under $3 million -- even they are reluctantly pinning this one on Teddy Forstmann's golden bean counter.
Fagreed is the $11 million dollar (tax free) man.
You'd expect more of him. But the sin of it all is that Citadel's market cap has nothing to do with what it is worth. Even at multiples of six times cash flow, they have sizable value.
The company owns lots of great radio stations (including the former ABC group and network). It employs some of the finest people in the radio industry.
Fagreed and the handpicked board of directors have engineered the impossible -- tanking a substantial media company because of incompetence and greed. The big managers make huge salaries and their employees are either fired or asked to take pay cuts.
Everyone wants to know what this will mean.
Will Citadel still be able to pay their remaining employees?
Will they sell off some clusters to relieve their debt?
Citadel doesn't have any big debt payments due for a few more years. The loss of value in their equity is very unfortunate for shareholders -- many of whom, I presume, will now file lawsuits against Citadel, but they will still remain solvent.
As far as selling clusters, that's just wishful thinking. No one is buying anything right now especially radio stations. So, if you work for Citadel, you're stuck with Fagreed -- at least for the time being.
One reader asked why Teddy Forstmann keeps Fagreed.
Fagreed is his man. Perfect for the job. Citadel calls itself a pure play radio company and if that's what it is I want to be an impure radio company. No one over there knows what they are doing because their original game plan was to buy and sell -- not operate.
As amazing as today's news about the new Citadel penny stock, don't let this bit of breaking news slip by you.
The Cumulus board of directors-- stock price worth a whopping $1.18 per share -- decided to reward their ace management executives for the fine job they've done.
I'm not making this stuff up.
Dickey Do & The Don'ts are getting more benefits.
Dickey Do gets them.
His employees don't.
Cumulus Media has filed with the SEC notification of bonuses being paid to top executives for their performance in 2008. CEO Lew "Tricky" Dickey gets $500,000 in cash, plus 320,000 restricted shares of stock, half time-vested and half based on performance.
Whoa!
How in clear conscience can you give this man who also got an $8 million signing bonus last year to stay in his job more compensation?
Cumulus is firing people. Gutting their clusters. Operating like Brother Love's Traveling Salvation Show -- selling potions and notions to shareholders to make them think this company has traction.
It doesn't.
Exec. VP/Co-COO John Dickey -- note the similarity in family name to the CEO -- gets $165,000 cash, plus 70,000 time-vested shares.
Well, you can't have siblings jealous of each other, can you?
Exec. VP/Co-COO Jon Pinch gets $100,000 cash and 40,000 time-vested shares.
What the hell?
Exec. VP/CFO Marty Gausvik gets $50,000 cash and 15,000 time-vested shares.
And, they're rewarding all these folks who have screwed up the company while relieving the people from duty who actually know how to run radio stations.
Imagine what they'd make if they actually made a profit?
Dickey, Fagreed, the Mays boys and lesser pretenders have literally sucked the life out of the radio industry.
It is an abomination that Fagreed and Dickey get to loot their companies while radio employees get fired and company shareholders see their investments become worthless.
And radio listeners are getting the short end of the stick as well. Cheap radio isn't good radio. You've lost one generation (Gen Y). Don't temp the available listeners (Gen X, baby boomers) to spend more time in their digital world and less time with a radio.
There is no way to spin a penny radio stock when the company owns all the ABC properties.
And there is no way to justify more bonuses to underachieving radio CEOs who would have been fired a long time ago in any other industry.
It's not okay with me that good people are losing their jobs because of it and good radio is being lost in their man-made economic downfall.
They all deserve to be held up to ridicule because in the end -- even after they've looted their own companies -- the joke is still on them.
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