Opposition, Potential Lawsuits In Wake Of Cumulus-Dial Global Deal
September 5, 2013
Following the announcement of the massive $260 million deal for Cumulus to acquire Dial Global (which officially became WestwoodOne again yesterday), opponents of the sale have begun to voice their concerns. First off, syndication competitor Talk Radio Network (TRN) released a statement, calling Dial Global a monopoly and accusing the company of illegal behavior.
In the statement, TRN said, "Over the past five years, Dial Global has become a monopoly. Dial engaged in a long list of illegal and unethical behavior, including failing to pay us our share of advertising revenues generated by our programming. We have detailed that conduct in two cases pending against Dial (and others) in federal court in Manhattan and Oregon. Dialís illegal conduct has continued recently, as it has refused even to pay to us our advertising revenues, which Dial collected as our ad rep. We believe that discovery in our actions will show that Dialís conduct was part of a deliberate strategy to acquire or destroy viable companies by interfering with revenue streams that Dial controls as a result of its monopoly power."
TRN added that it is concerned "that Dialís history of illegal and unethical conduct could infect Cumulus and affect the way the merged entity does business. The threat that this merger poses is not just to us. It is to every independent content provider, to many other members of the industry, and more generally to a vibrant marketplace of ideas on radio."
TRN says it will continue to pursue its legal claims against Dial Global, as well as "take all necessary actions to oppose Cumulusís proposed acquisition, including in our pending litigation with Dial, with appropriate governmental authorities, and in the media. We have heard from other members of the industry with similar concerns. Given the implications for others, we encourage all independent content providers and other affected members of the industry to rise up and express opposition in every proper forum."
Meanwhile, a handful of law firms have threatened potential lawsuits from Dial Global shareholders. The law firms say they are investigating, on behalf of the shareholders, if Dial Global did its best to shop for the best possible deal for the company.