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Cumulus Obtaining All Merlin Media Properties; Alternative Coming Back To 101.1

Effective today, Cumulus Media has taken over operations of all of the Chicago radio stations owned and/or operated by Merlin Media. This is being done by a four-year local marketing agreement (LMA), with an option to purchase after one year. The purchase price has not yet been disclosed since the purchase process has not yet been started.

Included in this agreement are the last two stations Merlin Media owns: WLUP-FM/97.9 The Loop and WIQI-FM/i101. Cumulus will also take over the LMA used by Merlin Media to operate WKQX-LP/Q87.7. That station, which is actually a low-powered television station with a FM simulcast at the end of some radio dials, is owned by Venture Technologies. Cumulus will only be assuming the LMA to operate the station and will not be purchasing it.

The plans are to keep WLUP-FM a classic rocker, but to expand and improve its current limited playlist. A move to a harder and deeper playlist will help separate the music from WLUP-FM from that of WLS-FM, which has also started deepening its playlist recently. Next week, the current confusing, and ever-changing, AC format on WIQI-FM will go away. At that point, the alternative format on WKQX-LP will be simulcast on WIQI-FM for approximately one month. After that, the alternative rock will stay on WIQI-FM, but something new will appear on WKQX-LP.

However, Cumulus cannot call the new alternative station on WIQI-FM "Q101" or even "Q101.1." If it attempts to move the call letters of WKQX back to the 101.1 frequency, it may face legal issues as well.

In July 2011, the Chicagoland-based Broadcast Barter Radio Networks (BBRM) purchased Q101, along with all related intellectual property and social media assets from Emmis Communications. BBRN owns the Q101 name, the Q101 logos and images, 19 years of recordings, 19 years of promotional materials, the online Q101 Club, the website Q101.com, and even Robert Murphy's straight jacket from the old Q101 commercials. BBRN has been keeping the Q101 name and legacy alive online. After Merlin Media started up Q87.7 and changed the call letters to WKQX, BBBN sued Merlin Media. After a long period of time, the case was quietly settled out of court.

Not yet known is the fate of the few remaining Merlin Media employees, but it is assumed that most will lose their jobs with the Cumulus takeover.

Also not yet known will be what will be broadcast on the 87.7/TV 6 frequencies starting in February. It will not be the Cumulus' Country format known as NASH, as Lew Dickey recently stated that Chicago is not yet in the plans for NASH -- although those plans could change if the alternative format on WIQI-FM does not prove to be advertiser friendly. One possibility will be the simulcasting of WLS-AM on the FM band. Another possibility will be finding another company to take over the LMA from Venture Technologies.

Although there is not yet a sale, which would still need to clear federal regulations, this effectively brings to an end the company called Merlin Media.

Started in the summer of 2011, Merlin Media was the latest venture by the disgraced ex-CEO of Tribune Company, Clear Channel, and Jacor: Randy Michaels. Using $3.25 billion of committed capital financed by the Chicago-based private equity firm GTCR, Michaels purchased two Chicago radio stations and one in New York from Emmis Communications. Part of that deal gave Emmis Communications an approximately 20% stake in the Merlin Media company. He later purchased one more station outside of Philadelphia and formed the LMA with Venture Technologies for the 87.7/TV 6 frequencies. While there were grand plans to expand the company much more, things did not go as planned for Michaels.

A female-targeted all-news station in Chicago and New York was a ratings, advertiser, and critical flop. After constantly playing with the format to improve it, which only worsened it, the news stations were abruptly ended one year later, flipped to music stations. In New York, the news station went to an automated alternative format, and was soon after sold to help keep the company afloat. Chicago's WIQI-FM went to an all-90s music format, which proved to be very popular, causing ratings to soar upward. Of course, Michaels messed with that format after just one month, adding newer music that could easily be found on numerous other radio stations, and the ratings went downward once again. Over the next few months, the music on that station has fluctuated between 80s, 90s, 00, and currents, from pop to rock to rhythmic, from slow songs to becoming a dance format on weekends. It went from having a semi-popular live morning show with Pete McMurray to only having occasional voice-trackers. The schizophrenic programming left listeners scratching their heads, and of course, tuning out. Once one of Chicago's most popular frequencies was getting beat in the ratings by college and suburban stations with weaker signals.

The on-air product on WLUP-FM, while it still maintained some decent ratings, was at its worst output in decades. Outside of a few hours in the mornings, the rest of the days were voice-tracked and automated. The limited playlist sought to simply copy the highest-testing songs from rival WDRV-FM/97.1 The Drive's playlist. Repetition was too common. The on-air and online imaging was aimed at the lowest common denominator.

Merlin Media also sold its Philadelphia station to help keep itself alive, all the while claiming the company was not for sale, would not be selling its Chicago stations, and was in fine shape. Despite the corporate denials, it was no secret that Merlin Media and GTCR were actively looking to sell their Chicago properties. It was always a question of "when," not "if."

When the sale for WLUP-FM and WIQI-FM finally closes (which may not occur until mid-2015), it will bring a close to a sad chapter in Chicago radio history.

Cumulus Media, the owner of WLS-AM and WLS-FM, has long sought to expand its footprint in Chicago. The company had also been seeking to purchase the two Merlin Stations for well over a year. According to insiders, a deal was nearly struck in December 2012, but quickly fell apart. When Cumulus CEO Lew Dickey came to Chicago at the end of last month to take care of some business deals, it was speculated that he was meeting with Merlin Media representatives to finalize the purchase of one or both of the Merlin-owned Chicago stations.

Donna Baker, Cumulus Chicago Vice President & Market Manager, will oversee operations at WLS-AM, WLS-FM, WLUP-FM, WIQI-FM, and for now, WKQX-LP.

The huge announcement of Cumulus' takeover of the remaining Merlin radio stations was first mentioned early Friday morning by the Radio Ink website.

UPDATED 1/4/13 with additional information.

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