After filing a $5 million lawsuit against Entercom with big fanfare back in July, United States Traffic Network issued a short statement Wednesday announcing it has “agreed to cause the dismissal, with prejudice, of its litigation against Entercom.”
When the lawsuit was filed, USTN repeatedly referred to Entercom as a corporate bully and said, “Entercom’s scheme was so perverse and all-encompassing that even Vladimir Putin would be left blushing.” It now looks like USTN has changed its tune regarding Entercom.
Before this latest turn USTN alleged in the lawsuit that Entercom stole data to create a competitive company. That move came after Entercom appeared to be trying to help the USTN by making a “significant investment” in the traffic firm. Entercom was already taking a revenue beating from USTN following the CBS Radio merger. Entercom announced, after the merger, that USTN was unable to pay millions of dollars for inventory it was banking on. Entercom says USTN’s financial woes cost the company $25 million in revenue and cash flow in 2018. Entercom CEO David Field was clearly unhappy with the USTN situation, using several earnings calls to call out the company for its poor financial situation.
It was May when Entercom appeared to throw USTN a lifeline by making an investment in the company. After learning USTN was not making any progress getting their financial house in order, Entercom terminated the agreement.
In July, the lawsuit was filed by USTN and Field announced the relationship between Entercom and USTN was over.
In a note to employees, Field set the record straight about what was happening: “What we found during our diligence review was unsatisfactory. We were disappointed to find that their financial condition and projected performance fell significantly short of what we had been led to believe. In addition, USTN management had fallen short on a number of other objectives in their turnaround plans and we first learned about a number of contingent liabilities.”
On August 20, Cumulus announced it was switching over to iHeart’s Traffic Network (which is under the Premiere umbrella) and leaving USTN. On the same day, USTN said it was winding down its operations.
Wednesday’s announcement repeated the fact that the company was winding down operations and included the statement that it was withdrawing the lawsuit against Entercom.
All USTN radio employees have been released from all non-compete and non-solicitation agreements and every station and client will be given service for a limited wind-down period.
The last day that the company will be providing data, talent, maps, or any other services to radio stations will be Friday September 7, 2018.
Entercom had no comment regarding this latest release from USTN.
