8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): October 1, 2020 (September 30, 2020)

____________________________

CUMULUS MEDIA INC.

(Exact name of registrant as specified in its charter)

____________________________

Delaware		001-38108			82-5134717
(State or other jurisdiction <br>of incorporation)		(Commission File Number)			(IRS employer <br>Identification No.)
3280 Peachtree Road, N.W., Suite 2200	Atlanta	GA		30305
(Address of principal executive offices)					(Zip Code)
Registrant’s telephone number, including area code			(404)	949-0700
n/a
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock<br><br>$0.0000001 per share	CMLS	Nasdaq Global Market
Class A common stock purchase rights	N/A	Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01. Entry into a Material Definitive Agreement.

The information under Item 2.01 below with respect to the Master Lease Agreement is incorporated by reference into this Item 1.01.

Item 2.01. Completion of Acquisition or Disposition of Assets.

On October 1, 2020, Cumulus Media Inc. (the “Company”) announced the initial closing under the Company’s previously announced agreement, dated August 7, 2020, by and among Cumulus Media New Holdings Inc. (“Holdings”), an indirect wholly-owned subsidiary of the Company, and Vertical Bridge REIT, LLC (“Buyer”) and VB Nimbus, LLC, each an affiliate of Vertical Bridge Holdings, LLC, for the sale of substantially all of the Company’s broadcast communications tower sites and certain other related assets for approximately $213 million. In the initial closing, the Company sold approximately 96% of the tower sites and related assets subject to the sale, in exchange for approximately $208 million in gross proceeds.

Simultaneously with the initial closing, the Company entered into an agreement (the “Master Lease Agreement”), dated September 30, 2020, by and among Holdings and Buyer, for the Company’s continued use of substantially all of the towers that were sold, pursuant to which the Company has agreed to make annual lease payments of $13.2 million, subject to customary escalators, and which will be accounted for as (i) a reduction of the financial liability and interest expense, (ii) a loss of annual tenant revenues of $2.2 million and (iii) a $2.3 million annual reduction of operating expenses of which $1.5 million is non-cash intangible amortization. The Company will also record non-cash imputed rental income for certain tower sites where the Company will continue to use a portion of the tower along with other existing and future tenants. The initial term of the Master Lease Agreement is ten (10) years, followed by five (5) option periods of five (5) years each.

The Company expects that one or more subsequent closings for the remaining tower sites will occur by the end of the second quarter of 2021.

After transaction fees and expenses and related costs, the Company received approximately $202 million in net proceeds at the initial closing. The Company utilized a portion of the net proceeds to pay down approximately $49 million of its Term Loan Credit Facility due 2026 (the “Term Loan”) at par, and intends to undertake an asset sale tender offer (the “Tender Offer”) to purchase up to $47 million of 6.75% Senior Secured First Lien Notes (the “6.75% Notes”) at par with the remaining net proceeds, as required by the terms of the Term Loan and the indenture governing the 6.75% Notes. The Company expects that any amount of the proceeds offered but not accepted under the Tender Offer will instead be used to pay down additional amounts outstanding under the Term Loan. Net proceeds of the sale related to assets that are not being leased are subject to a 12-month reinvestment right.

This Current Report on Form 8-K does not constitute a notice of redemption under the optional redemption provisions of the indenture governing the 6.75% Notes, nor does it constitute an offer to sell, or a solicitation of an offer to buy, any security. No offer, solicitation, or sale will be made in any jurisdiction in which such an offer,

solicitation, or sale would be unlawful.

Item 7.01 Regulation FD Disclosure.

On October 1, 2020, the Company issued a press release announcing the completion of the initial closing. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated into this Item 7.01 by reference.

The information set forth under this Item 7.01 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 - Financial Statements and Exhibits.

Exhibits.

Number	Exhibit
99.1	Press release, dated October 1, 2020
104	Cover Page Interactive Data File

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		CUMULUS MEDIA INC.
		By:	/s/ Francisco J. Lopez-Balboa
			Name: Francisco J. Lopez-Balboa
			Title: Executive Vice President, Chief Financial Officer
Date:	October 1, 2020

Document

CUMULUS MEDIA Completes Initial Closing of Tower Portfolio Monetization Transaction for $208 Million

ATLANTA, GA — October 1, 2020: Cumulus Media Inc. (NASDAQ: CMLS) (the “Company,” "CUMULUS MEDIA," “we,” “us,” or “our”) today announced that the Company completed the initial closing of its tower portfolio monetization transaction for $208 million in gross proceeds on September 30, 2020.

Mary G. Berner, President and Chief Executive Officer of CUMULUS MEDIA, said, "We are thrilled to have expeditiously completed the first closing of this significant transaction. Pro forma for its completion and based on our Q2 ending cash balance, we will have reduced net debt by nearly $325 million during 2020 and by nearly $580 million since emerging from bankruptcy in 2018. Our further improved liquidity position and covenant-lite, long-dated debt will continue to support our growth initiatives and allow us to take advantage of accretive opportunities as we navigate through near-term uncertainties to drive long-term shareholder value."

Balance Sheet Highlights of the Transaction

After transaction fees and expenses and related costs, the Company received approximately $202 million in net proceeds at the initial closing. The use of net proceeds from the transaction are governed by the Company’s Term Loan Credit Facility due 2026 (the “Term Loan”) and its 6.75% Senior Secured First Lien Notes due 2026 (the “6.75% Notes” and, together with the Term Loan, the “Debt Agreements”):

•As defined in the Debt Agreements, net proceeds of approximately $64 million from assets being sold and not being leased back (the “Sale Proceeds”) and net proceeds of approximately $96 million from assets being sold and leased back (the “Sale-Leaseback Proceeds”) are required to pay down the Term Loan and be applied to a tender offer with respect to the 6.75% Notes on a pro rata basis.

•The paydown from the Sale-Leaseback Proceeds is required to be made at closing for the Term Loan portion and within thirty (30) days of closing for the 6.75% Notes. As such, at closing, the Company paid down approximately $49 million of its Term Loan at par, and it intends in the near future to launch a tender offer for up to approximately $47 million of the 6.75% Notes at par. Any amounts offered but not accepted under the tender offer will be used for an additional par paydown of the Term Loan.

•The mandatory prepayment/tender offer required in connection with the Sale Proceeds is subject to a 12-month reinvestment right.

This press release does not constitute a notice of redemption under the optional redemption provisions of the indenture governing the 6.75% Notes, nor does it constitute an offer to sell, or a solicitation of an offer to buy, any security. No offer, solicitation, or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful.

Operating Highlights of the Transaction

At closing, the Company entered into a master lease agreement for the continued use of substantially all of the towers that were sold:

•The initial term of the lease is ten (10) years, followed by five (5) option periods of five (5) years each.

•The annual lease payment obligation for the assets leased back in the initial closing is approximately $13.2 million, subject to customary escalators, and will be accounted for as a reduction of the financial liability and interest expense.

•Annual tenant revenues of approximately $2.2 million and operating expenses of approximately $2.3 million (of which approximately $1.5 million is non-cash intangible amortization) will no longer be reflected in the Company’s financial statements. The Company will report non-cash imputed rental income for tower sites where it continues to use a portion of the tower along with other existing and future tenants.

•The transaction will not have any effect on the Company’s current broadcast operations.

The Company anticipates that one or more subsequent closings will be held for the assets comprising the remainder of the previously announced $213 million purchase price, subject to adjustment based upon due diligence and the curing of outstanding site defects. The Company anticipates that substantially all, if not all, of the subsequent closings will occur by the end of the second quarter of 2021.

About CUMULUS MEDIA

CUMULUS MEDIA (NASDAQ: CMLS) is a leading audio-first media and entertainment company delivering premium content to over a quarter billion people every month - wherever and whenever they want it. CUMULUS MEDIA engages listeners with high-quality local programming through 424 owned-and-operated stations across 87 markets; delivers nationally-syndicated sports, news, talk, and entertainment programming from iconic brands including the NFL, the NCAA, the Masters, the Olympics, the Academy of Country Music Awards, and many other world-class partners across nearly 8,000 affiliated stations through Westwood One, the largest audio network in America; and inspires listeners through its rapidly growing network of original podcasts that are smart, entertaining and thought-provoking. CUMULUS MEDIA provides advertisers with personal connections, local impact and national reach through on-air and on-demand digital, mobile, social, and voice-activated platforms, as well as integrated digital marketing services, powerful influencers, full-service audio solutions, industry-leading research and insights, and live event experiences. CUMULUS MEDIA is the only audio media company to provide marketers with local and national advertising performance guarantees. For more information visit www.cumulusmedia.com.

Disclosure Regarding Forward-Looking Statements

Certain statements in this release may constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Such statements are statements other than historical fact and relate to our intent, belief or current expectations primarily with respect to our future operating, financial, and strategic performance. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ from those contained in or implied by the forward-looking statements as a result of various factors including, but not limited to, risks and uncertainties related to the implementation of our strategic operating plans, the evolving and uncertain nature of the COVID-19 pandemic and its impact on the Company, the media industry, and the economy in general and other risk factors described from time to time in our filings with the Securities and Exchange Commission. Many of these risks and uncertainties are

beyond our control, and the unexpected occurrence or failure to occur of any such events or matters could significantly alter our actual results of operations or financial condition. CUMULUS MEDIA assumes no responsibility to update any forward-looking statements, which are based upon expectations as of the date hereof, as a result of new information, future events or otherwise.

For further information, please contact:

Investor Relations Department

IR@cumulus.com

404-260-6600

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