Private Equity Fucks iHeartMedia (Clear Channel) too.

[Playball40]

https://www.cnbc.com/2018/03/15/iheartmedia-files-for-bankruptcy.html

Same thing - top heavy. Both CCO and the radio stations are black.

 

[braces_for_impact]

I'm interested to see what becomes of radio.

 

[Playball40]

I'm interested to see what becomes of radio.

the thing is, radio advertising STILL produces the greatest ROI for advertisers. What's changing is the method of delivery (ie: the technology). Radio will survive (just as television has) but it will be interesting to see how it changes.

 

[Playball40]

Interesting read https://qz.com/1094963/radio-surviv...he-age-of-spotify-its-more-popular-than-ever/

 

[Jimmy Higgins]

https://www.cnbc.com/2018/03/15/iheartmedia-files-for-bankruptcy.html

Same thing - top heavy. Both CCO and the radio stations are black.

A few things from the article.

IHeartMedia, which has struggled with $20 billion of debt and falling revenue at its 858 radio stations, said cash on hand and cash generated from ongoing operations will be sufficient to fund the business during the bankruptcy process.

As Playball40 indicates, the article says, and I paraphrase "Oh, our business is capable of making enough money for the company to run without additional financing, but..."

The private equity firms led a $17.9 billion leveraged buyout of what was then Clear Channel Communications Inc in 2008, just as the buyout boom was fading and as the signs of the financial crisis began to emerge.

Nice. We don't have the money to buy this company, but the economy is going gangbustas right now with no end in site.

Clear Channel's B2 Corporate Family Rating reflects the company's high debt-to-EBITDA leverage (8.2x pro forma for the trailing twelve months ended March 31, 2008 and incorporating Moody's standard adjustments) and the substantial interest burden resulting from the $24.5 billion leveraged buyout of the company by private equity sponsors.

So right after the purchase, ratings downgrade.

By March 2009, another downgrade.

Moody's Investors Service has downgraded Clear Channel Communications, Inc.'s ("Clear Channel" or the "Company") Corporate Family Rating and Probability-of-Default Rating to Caa3 from B2. Moody's also downgraded the Company's senior secured credit facilities to Caa2 from B1 and all senior unsecured notes to Ca from Caa1. In addition, Moody's downgraded Clear Channel's speculative grade liquidity rating to SGL-4 from SGL-2. The ratings downgrade reflects Moody's belief that there is a high probability that the company will violate its secured 9.5x leverage covenant this year, and that when this occurs, a debt restructuring will be likely. The outlook has been revised to negative. This rating action concludes the review initiated on February 6, 2009.

A little wobble, but then the interest is just suffocating the company as obligations become due.

Clear Channel's Caa2 (CFR) reflect the very high leverage levels of 11.4x on a consolidated basis (excluding Moody's standard lease adjustments) and its weak free cash flow. Interest coverage is expected to decline from 1.4x to approximately 1.1x (depending how much senior unsecured debt is extended at higher rates). The company still faces $3.2 billion in term loans due in 2016, although the substantial extension of debt achieved materially lessens this risk to the credit. However, future refinancing will lead to additional increases in interest expense.

Kick the can, kick the can, kick the can...

Please notice that increasing leverage level with each subsequent release.