Is Clear Channel on verge of collapse in coming years???????

The New York Post reports that if Clear Channel, the nation’s largest radio owner, is unable to restructure their debt in the next few years it will likely collapse.

A source tells the newspaper that CC, which also operates the highly-successful WLTW/Lite-FM and WKTU, has not done well in negotiating with lenders to refinance their exorbitant debt.

Private-equity owners Bain Capital and THL Partners bought CC in a $24 billion leveraged buyout in 2008. If the company can’t manage to change its capital structure, sources say, it will ultimately default on the $18.4 billion debt.

A lender says Clear Channel generates $1.4 billion in cash flow while paying $1 billion in interest and spending $200 million on capital expenditures. Therefore, the company has only $200 million in yearly cash flow available.

Clear Channel has a $700 million bill coming due in May 2011 and $4.5 billion due in July 2014. Sources tell the Post, that CC should have $2 billion in disposable cash that should help them make it through 2011, however getting to, and beyond, 2014 is a tougher issue.

http://www.examiner.com/x-5468-NY-Media-Examiner~y2010m4d14-Report-Clear-Channel-on-verge-of-collapse

Here's NY Post Story - Interesting reading even if it is the Post. http://www.nypost.com/p/news/business/unclear_future_TC9WaDTPsiXnMnvG3sonVO

Bain and THL bought Clear Channel in a $24 billion leveraged buyout in 2008. It may take about four years, but if the company can't manage to change its capital structure, it will ultimately default on its $18.4 billion debt, sources said.

The market for refinancing loans is hotter than at any time since the recession, but that's not helping Clear Channel, whose large creditors -- Centerbridge Partners and OakTree Capital Management -- are not passive LBO lenders.

Centerbridge co-founder Mark Gallogly is formerly a Blackstone Group managing director who cut his teeth buying media companies, and OakTree last week repossessed radio company Regent Communications. Both want to own Clear Channel and are prepared to wait, the first source said.

For months, there has been a war between Clear Channel and its creditors.

on all the powerful stations. It's time to break them down to size. They should never have been allowed to swallow up such a large monopoly of the air waves.

pretty much dead. The nationalized shows ruined that intimacy that radio depends upon.

Let them fail.

They gin up the hatred with all the RW crap while local politics and stories get ignored cause so many damn stations are broadcasting RW national crap for the most part.

because everything they did was so highly leveraged.

They're all drowning in debt, in other words, and revenues are finally down thanks to the current financial mess.

... caused by right wing policies. O the irony.

nuff said.

Cheap Channel must GO!

This RW mess is just rotten to the core.

I finally removed it from my car radio the other day I couldn't stand it.

Not sure what point you are making.

...if Clear Channel croaks, so does KTLK (too bad), along with KFI (good riddance). I thought that would be the obvious conclusion from my previous reply. Sorry for any unintended confusion.

If an investor or investor group buys KTLK in an auction or a sale before an auction there might not even be any disruption or programming. Depends on the buyers. If the format changes, another station might take that format on. Seems a little early to start spreading the "croak" warnings.

I expect CC to start divesting itself of assets soon. If the failure of CC represents an opportunity of less media concentration and a return to more local ownership of radio stations then I see this as a possibly beneficial change in the industry. Or Ceberus could just buy it all up.

...If an investor or investor group buys KTLK in an auction or a sale before an auction there might not even be any disruption or programming.

However, in my anecdotal experience, living in Los Angeles since 1976, and being a listener to all forms of broadcast radio in this market, whether it be the AM or FM bandwidth -- generally/generically speaking -- AM Talk, FM Music -- I have never seen nor heard of a particular station's format/programming surviving such a drastic change of ownership/management.

But format shuffling is more likely, where a format moves. I'm not worried about the future of progressive talk formats in LA. And since most of the talent on KTLK is syndicated by DialGlobal, and not the property of Clear Channel their work will go on. Only Randi is on a syndicator owned by CC and that org could be sold off and continue without disruption.

Anyways, there will be shakeups. As they say so often in radio "the wind blew, the shit flew and there weren't any bosses for a week or two".

instead of limpballs and beckerhead.

Clear Channel needs to die so that maybe we can have local programming on stations again. Can't stand any of their music formats either.

what a monster it is/was hopefully soon

And they wonder why they're going bankrupt.

Does Rushbo throw 40 yards downfield? No.
Does he throw a 100mph fastball? No.
Does he perform open heart surgery? No.
Does he design lesson plans for the nation's schools? No.

There is nothing Rusha the Hutt does that justifies such enormous salary.

Clear Channel has zero credibility .. and returns nothing to their local markets.

No local news, no local programming, no public service, no goodwill.. I hope they croak and die in their own Corporate-- Reich Wing Rush Limbaugh-wet dream.

Advertisers will not spend money on a station that siphons off local ad dollars to a corporate slave master somewhere a thousand miles away and gives nothing back to the community..

I hope they ending up begging on corners.

Cheap Channel has been dragging around a ton of debt for the past decade and has been on the verge of Chapter 11 for quite a while. Their revenues have plummeted as young listeners avoid radio and older ones, turned off by "cookie-cutter" formats and hate radio have turned of their radios. Add to that the overvalue (similar to the real estate bubble) of their "stick value" or licenses that have also plummeted in the past couple years and the company's financial situation is massive red ink.

They're not alone, other companies such as Citidel, Regency, NextMedia and Cumulus are either in Chapter 11 or headed there, but instead of these companies being re-organized, the debt is being shuffled around...the stockholders are given the rubber weinie, creditors are paid off or sold new "stock" in the restructured company that leaves the same asshats that ran the company into the ground at the helm, along with their fat paychecks. I suspect Cheap Channel will find a similar deal.

In recent weeks several "vulture" capital firms have begun to move in, buying up large blocks of broadcast company stocks for pennies...and may be the ultimate overlords here as they eat up these "too big to fails" that have destroyed the public airwaves and sell off the assets. Despite words that all is looking rosey in the radio world, it's nothing but whistling past the graveyard.

.. stations were sold for multiples of 20-30 times billing. (It's been a few years since I used to follow those deals in Broadcasting Magazine, so I'm not sure of what the multiples were.) Today.. you could probably value some of those stations at 30 times zero.. No advertising revenue coming in. lol

Reading the Bios on the managing directors of Centerbridge Capital, Bain Capital, THL, Oaktree, Blackstone Group, is like reading a who's-who of Alum,... with all the graduates coming from Goldman Sachs.

The stations will be sold off and assets stripped, but I wonder if there is any chance of ownership ever returning to localized or small group owners? Sadly.. I doubt it.

It sure would be nice to hear real 'news' and progressive programming on radio again. Heck.. I'd even settle for a 'Swap-And Shop' program on Saturday morning, as long as I don't have to listen to Sean Hannity, Laura Ingraham, Ann Coulture, Rush, Neil Bortz... etc, etc..

In full disclosure: I've been working with internet broadcasting since 1996 and have seen this medium grow from novelty to the threshold of what could be the future of broadcasting (including television). With Wi-Fi networks going up all around, IPods, IPads and other wireless devices starting to hit the market, the tether has been severed and listeners will have a choice of thousands of stations rather than the handful of corporate owned ones.

Multiples are back down to 3 to 5 but too little too late...most AM properties have little value and FMs that once were going for $10 million are now lucky to fetch 1 mil. And that's if one's crazy enough to want to buy in and do so with cash cause financing is all but impossible to come by.

Radio by its own arrogance, like the recording industry, ignored and underestimated the power of the internet. The day is coming soon where you'll be able to hear what you want to hear, not what the corporates do.

..now with apps for your cell phone to listen to your favorite streaming podcast and satellite radio.. the tether is almost severed, as you say. It can't be long until it becomes technically simple to listen to internet radio on your Ipod or MP3 player.

If we can keep Rupert Murdoch and his fat- greasy-fingers off the internet long enough for technology to mature, maybe we will have a chance.

Too bad the big regional AM's are gone away. I think they could still serve a purpose, especially for rural communities, with weather forecasts, agricultural news, farm reports, etc. Even if they connected small towns within a 200 miles radius with regional news... there are still enough am radios out there for an audience. One 50KW station can cover a big area for a cheap price . (I think of WSB Atlanta, WBT Charlotte, WSM Nashville, WLS Chicago) However the antenna maintenance and upkeep on an AM is prohibitive anymore.

I agree.. there was an arrogance out there that shut down the flow of new programming. Today, there are tons of new music acts out there waiting to be heard... if only they could find a forum. I hope the internet is the new place for radio.

A group of us are working with setting up local-oriented internet stations around the country...filling that void you speak of and integrating it with print, video and other interactive features. While the internet is a worldwide platform, it's those who specialize and create a niche that will suceede.

"Conventional" radio isn't going away for a while...ethnic radio is still very popular and profitable for many small AM stations. Sadly many of the rural and small town stations are gone...automated and hooked up to satellites. Some offer a morning show and token news coverage, but their value in an emergency has been a concern for quite a while. Old rules used to require stations to have a live body on duty at all hours...today, they lock the doors at 5pm and let microchips run things. The big "blowtorches" (I'm in Chicago and grew up with 4 of 'em) have lost their regional punch...a combination of the increase of local stations and the corporate downsizing to maximize falling revenues.

For all their wealth and power, the internet horse is way out of the barn. Should they try to dominate operators will go to offshore servers. The diversity and variety is what makes the internet so attractive...and it's size is so large now it's hard for anyone to monopolize or dominate it.

Cheers...

Just look up the stock price and market value of the big radio conglomerates. With debt loads, an FM station is fortunate to worth 2-3 million.
A handful of urban FM stations are still worth several million or so because they get a very large audience. They are the exception.
The Internet is here to stay. The record companies should have seen Napster's success circa 2000. They did not and they are paying for it.

Yes, AM stations could still serve rural communities, but as you stated, the costs are making operating them difficult.

grab CC's assets for dimes on the dollar. They clearly prefer foreclosure to working out loan terms. Limbaugh is their top earner, and he's not going away no matter who owns the place.

OTOH, this is more about the foolishness of $30 billion buyouts in a dying industry than it is about Clear Channel.

Sadly I know too many people who are in that biz who think the financial messes are just a symptom of the poor economy and that someday soon the sun will once again shine and radio will somehow transport back to 1995 or 1985 or 1975...not gonna happen. Dereg '96 opened the floodgates on both consolidation of the airwaves in few and powerful hands and turned the public airwaves into a gambling casino. In the end listeners and subsequently the entire industry are the losers.

Oak Tree is involved in several of the current Chapter 11s and you are correct, they've got their eyes on Clear Channel's assets. Reports say they want to keep the chain intact, but several trust "insiders" I know agree this company is only looking to keep profitable operations and try to sell off the majority that are doggies (including many of Rushbo's stations). Problem is the "stick prices" still remain inflated and there are few buyers out there who want to try to rebuild a dying industry...especially when banks are very tight on issuing any loans to prospective buyers. If you've got the cash to burn, you can play this losing game.

If Limbaugh is their top earner, that says how sad things have gotten. He's definitely one of the bigger expenses but from all the years of observing and investigating, Rushbo makes few stations money...he saves 'em cause the local stations don't have to pay a local talent, just hook up to rushbo's satellite. Ads are cheap and plentiful.

The vultures are circling...of course they're saying all is well...just before they start to dismantle. Stations that aren't profitable and can't be sold in a reasonable amount of time will be shut down (only low property values have stopped this from happening already). It's sad to see a once vibrant industry I loved so much get destroyed...but I'm grateful I saw what was coming over 10 years ago and found a more lucrative and stable alternative.

Cheers...

I was in radio for about 12 years and I ran up against these turds all the time. They want to own and run EVERYTHING that gets broadcast and are damn close to doing it. If they were to crumble and burn in a spectacular fire, it wouldn't be too soon.

Get rid of that megaton contract by firing Rushie. Over $150M can be saved!

And turn about half of the damn radio into a liberal one, paid for by Clear Channel. Restart Air America, and hire REAL talent, not some right-wing hack pretending to be a liberal.

Hawkeye-X

by sucking up all their revenue.

Go ahead, big boy. Get every single Benjamin that's coming to ya. ;-)

:hi:

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and deserves to die.

I've been listening to Pandora recently with my iPhone connected to my car stereo and it's incredible. I've found out so many independent bands I wouldn't have otherwise. And it's "music genome project" algorithm is very impressive finding music to my tastes.

I don't know why I haven't been doing this for a while now. With 3G established in all major markets and 4G around the corner, data plans with cell phones will allow people to be online all the time. Internet radio may eventually face similar problems (big players may gobble up other providers) but it's ultimately too vast to control.