August 21, 2018
After losing its largest radio client on July 30, United States Traffic Network has begun to inform employees of plans to wind down its radio traffic services division. According to sources, the company expects to deliver its final radio traffic reports for advertisers this Friday (Aug. 24) and final traffic data to radio affiliates two weeks later on Sept. 7. Services to the company’s TV clients will continue uninterrupted.
The network’s radio sellers were informed of the latest chapter in the saga of the financially struggling company during a conference call on Monday. Radio sellers were told their last day would be Aug. 3.
In what’s being described as an orderly wind-down of the radio division, a total of about 130 employees will eventually be affected. USTN’s reporters and sellers are expected to be released from their non-compete agreements, making them free to seek employment elsewhere. For radio sales people, that date is Aug. 31 and Sept. 7 for radio anchors. Some radio employees will be shuttled over to USTN’s TV division.
The decision comes three weeks after USTN had a very public falling out with Entercom, which severed ties with the Malvern, PA-based company over millions of dollars in unpaid bills. Sources say the radio division was unable to recover from the loss of its largest radio client and couldn’t meet advertiser needs without Entercom’s business. After Entercom abruptly ended its relationship with USTN, the traffic reseller was forced to reschedule close to 10,000 spots in a matter of days.
The end of the partnership with Entercom came after USTN filed a suit in U.S. District Court in Texas, against the broadcaster, claiming that Entercom was in talks to buy USTN, bailed on the deal, severed its relationship with the company and used trade secrets it gained from USTN to develop a competing service to launch in fourth quarter.
The radio division shutdown will affect hundreds of radio stations owned by Cumulus Media, Emmis, Cox, Hubbard and numerous smaller players that relied on USTN in some of their markets. During its second quarter results call on Monday, Cumulus said it took a nearly $5 million revenue hit from USTN. Later in the day, Cumulus said it had signed a new multi-year partnership that will make Total Traffic & Weather Network (TTWN) its exclusive provider of traffic content.
During its second quarter results call on Aug. 8, Entercom said it took a $12 million revenue hit from financial problems at USTN. Entercom, which relied on USTN to resell their short-form traffic ad inventory, is bringing traffic in house.
Prior to losing Entercom, USTN counted 1,100 radio and TV station affiliates.