By Bob Fernandez STAFF WRITER
Two Philadelphia-area radio companies have split with a lawsuit and a terse public statement.
Malvern’s United States Traffic Network sued Entercom Communications for fraud in state and federal courts in Texas this week, seeking punitive damages in excess of $5 million, while Entercom said good riddance to a former partner.
Entercom, the nation’s No. 2 radio company and controlled by the Field family, is based in Bala Cynwyd.
The breakup spells more trouble for Enter-com with its recently acquired CBS Radio empire that has been nothing but surprises since the deal closed in late 2017. Entercom stock is down more than 50 percent since it announced the CBS Radio merger in early 2017 as radio advertising has declined and Entercom’s debt has soared.
It also threatens the United States Traffic Network, which provides traffic updates — and on-air traffic personalities such as Bob Kelly at Fox29 — for 1,000 radio stations and 50 television stations, reaching 160 million Americans. The company employs 250 full- and part-timers, including 85 at the Malvern headquarters.
The United States Traffic Network faced liquidation
earlier this year before it was bought out by top executives led by CEO Ivan Shulman. The company had a big contract with CBS Radio. But now it has lost that contract.
Filed in Houston courts, United States Traffic Network’s suit claims that Entercom stole its customer data and lulled it into thinking that Entercom would buy the whole company. But Entercom — which acquired 27 percent of the United States Traffic Network earlier this year as part of a rescue package for USTN when the companies were getting along — backed out of the deal at the last minute in late June, leaving the Malvern company without the funds to make necessary payments to Entercom.
Entercom’s “scheme was so perverse and all-encompassing that even Vladimir Putin would be left blushing,” United States Traffic Network claimed.
Officials at the United States Traffic Network declined to comment beyond the suit.
Entercom shot back on Tuesday with a public statement, saying it had ended its “reseller agreement” with United States Traffic Network and was pleased to be done with the partnership.
“We are relieved to no longer be mired by the difficult USTN situation that was inherited as part of the CBS Radio merger. We will move quickly to augment our strong internal sales organization to ensure that we realize the full value of this inventory,” David Field, president and CEO at Entercom Communications, said in a statement. “With leading news brands like 1010 WINS in New York, KNX in Los Angeles, and WBBM in Chicago, Entercom has the industry’s most valuable traffic inventory, and we are pleased to be in control of our own destiny as we pursue opportunities in this attractive market segment.”
Entercom did not respond immediately to aquestion as to how it would provide traffic updates to stations.
In addition to the former CBS Radio stations in Philadelphia such as KYW, Entercom recently acquired 101.1 More FM.