New radio company sues Cumulus.

Byline: Joe Harwood The Register-Guard

Broadcast upstart Churchill Communications LLC is taking a swipe at radio giant Cumulus Media's domination of the Eugene-Springfield radio market.

Eugene-based Churchill, which has launched two radio stations over the past two weeks, has filed a lawsuit in Lane County Circuit Court against Cumulus, alleging that the broadcast giant uses noncompetition agreements with its employees to prevent industry newcomers from establishing competing radio stations.

The lawsuit claims that Cumulus is limiting competition in the local radio market by trying to enforce noncompete clauses that prevent former Cumulus employees from working for Churchill or other rivals.

Such covenants generally protect broadcast outlets from their on-air talent going to work for a competitor, and usually include a specific amount of time and geographic area for the ban.

Cumulus, based in Atlanta, is the second-largest owner of radio stations nationwide with 305 stations in 61 midsized markets. Cumulus entered the Eugene-Springfield market in 1999, and in 2001 reached the Federal Communications Commission ownership limit of six radio stations for a market this size.

Locally, Cumulus owns KUGN-AM, KZEL-FM, KEHK-FM, KNRQ-FM, KUJZ-FM AND KSCR-FM.

Churchill is owned by Suzanne Arlie, who with her husband, John Musumeci, operates Eugene-based real estate development firm Arlie & Co. Since the beginning of November, Churchill has gone live with the region's first full-time Hispanic radio format on KZTU-AM 660, and started broadcasting liberal-leaning Air America Radio on KOPT-AM 1450.

Churchill argues in the lawsuit that it needs the expertise of two former Cumulus employees - Phil Polter and Joe Harper - to successfully operate in Lane County.

Polter worked as a advertising salesman and sales manager for KZEL and KNRQ until quitting, according to the lawsuit. Polter is now the station manager for Churchill's KOPT.

Because Polter was not asked to sign a covenant not to compete when he was initially employed by Cumulus, and only signed one later, the clause is not enforceable, according to the lawsuit.

Harper, an on-air talent and assistant program director for KEHK, owned by Cumulus, was terminated by Cumulus for budgetary reasons on Sept. 30, according to the lawsuit. Churchill alleges that the noncompete clause Harper signed with Cumulus is void because Harper was let go for budgetary reasons.

Harper has been providing consulting services to Churchill, but has not been offered a permanent position, according to the lawsuit.

Steve Ries, market manager for Cumulus in Eugene, declined to comment on specific personnel issues. However, Ries said such noncompete clauses are widespread in radio for on-air talent and sales people.

"We invest in our people and we give them training," Ries said. "We ask that they protect us by not taking our secrets to our competitors."

Cumulus has demanded that Churchill end its relationship with Polter and Harper, according to the lawsuit.

Also taking a jab at media consolidation, Churchill alleges that "Cumulus has replaced local programming with syndicated programming at its Eugene stations, and that in violation of FCC policies it has failed to provide local broadcasting that is responsive to the unique interests and needs of the local community."

The lawsuit contends that "it is in the public interest for locally owned and operated competitors, such as Churchill, to enter the market and serve the local needs Cumulus is ignoring."

Cumulus and Clear Channel Communications, the nation's largest owner of radio stations, have been dogged by charges that they scrap local programs and replace them with syndicated programming, which reduces operating expenses.

Enforcement of the noncompete clauses between Harper, Polter and Cumulus, will interfere with Churchill's entry into the market, the lawsuit alleges.

Ries said the lawsuit contains "totally unfounded comments and false statements.

"Cumulus Eugene has added local programming since I've walked in the door," Ries said. He joined the station earlier this year.

He pointed to a 90-minute increase for the "The Jerry Allen Show," which runs on KUGN-AM from 5:30 a.m. to 10 a.m.; a new sports show from 3 p.m. to 6 p.m. on KSCR-AM; a new one-hour news show on KUGN from 5 p.m. to 6 p.m. and continuous live local music programming on KNRQ from 6 a.m. to 10 p.m.

"It's a totally false statement we've taken away local programming," Ries said. "We have plans to add more local programming."

Scott Diehl, chief operations officer for Arlie & Co., said the lawsuit by Churchill "will hopefully contribute to restoring local radio in our community."

The lawsuit asks the court to void the noncompete covenants.