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What's Up With Clear Channel? (Jan 14, 2002)Let's label this as a rumor. I've been to the Coast to Coast Messageboard right here...http://radio-info.com/boards/ctc/index.cgi Here's what a few posters are saying about this surprising rumor... Name: The Outsider E-Mail: iowamedia@yahoo.com Date: 1/14/02 5:40 p.m. Originally posted on the Iowa Board: (Los Angeles) RUMORS, RUMORS, RUMORS! There are rumblings out of Austin, Texas, that Mega-Owner Clear Channel may seek to file Chapter 11. In a story first hinted at by Rumormeister Matt Drudge, the deed holder to over 1,170 radio stations nationwide may be going bankrupt. With all of CC's very valuable properties, it seems an unlikely rumor, but some company employees were told to "expect an importaint announcement January 15th". Clear Channel has continued to downsize in Draconian fashion throughout December, even axing major market air talent and middle management. Cleveland, Little Rock, San Diego, and Los Angeles being the most recent markets feeling the pinch. It seems more likely that if any of this rumor is true, that a Chapter 7 restructuring would be more plausible; allowing CC to keep it's profitable stations, and sell off capital generating ones. We are unable to corroborate further details at this time. Stay tuned. Name: David Eduardo Date: 1/14/02 6:51 p.m. In Reply To: Rumors, Rumors, Rumors: What's Up At Clear Channel? (The Outsider) This has to be the most far-fetched idea so far this year. CCU has assets of $48 billion and long term debt of only $10 billion; EBITDA (Earnings before Taxes, depreciation and amortization) are positive and the company has had an increase of over 25% in stock value since October. Chapter 7 is dissolution or liquidation of all operations, not restructuring. A station doess not "generate capital" if it is losing money; capital is a synonym for money. You would not sell off stations that are cash flowing any more than a company that is healthy would go Chapter 7. Generally, Chapter 7's are caused when creditors force liquidation. Nearly every company in the US has cut back or tightened hiring, general expenses and dividends since the economy started sagging early last year; that a radio company is trying to streamline operations is not a desparate move... just a prudent one. Name: Investor E-Mail: sf_investment_banker@yahoo.com Date: 1/14/02 10:20 p.m. In Reply To: Re: Rumors, Rumors, Rumors: What's Up At Clear Channel? (David Eduardo)Yes, you can use the Long-term debt to assets ratio as a way of guaging the financial stability of a company. However, most financial crises that are happing right now happen because of liquidity crunches. A company's cash flo statement will give some clear hints as to what to expect. Here are some interesting metrics from the company's latest Q - nine months ended 9/30.
A] Cash flow statement - Net cash generated for the nine months ended - $308 million Greatly reduce "E." We all know that the value of licenses has collapsed, or will collapse. The SEC hasn't made them write that down yet, but I am sure they will. Banks certainly will not provide much credit against "E," given the declining value of licenses. And banks certainly will not lend against goodwill. Odds are that with the huge cash losses they are taking in Q4, they have killed, or have virtually killed off all the cash on their balance sheet. My suspicion is that the aging on their accounts receivables is fairly long. Plus, with the recession, I am willing to bet that the cycle has extended itself in length rather substantially. I'd be surprised if they were able to collect on 1/4th of their outstanding receivables over the last quarter. I am also willing to bet that they have drawn sufficiently on most of their credit lines, which I assume are guaranteed by their tangible assets, and perhaps a little on the license side, but probably not much. Let's do some math... If... A] Net cash flows to cash and cash equivalents decreases by $100 million for Q4 (very possible) B] The company draws down its lines of credit (very possible), as banks become more loathe to provide liquidity at reasonable terms C] Accounts receivables cannot be quickly turned into cash and, therefore, increase D] Creditors call on their current liabilities ...Clear Channel will have a real mess on their hands. It's not that the company will be insolvent. It's a case where the company will have a liquidity crunch. Therefore, it's *VERY POSSIBLE TO SEE A BANKRUPTCY* -- in the way of a chapter 11. We'll see what happens. Name: David Eduardo Date: 1/15/02 12:23 a.m. In Reply To: Uh, uh, uh... not so fast -- big freight train coming (Investor)I have not seen any indication of a decline in the value of licenses. In fact, in the last year we have seen some deals that push the valuation way beyond conventional multiples. Examples are the SBS purchase of KFSG in Los Angeles, a stick, for $250 million. Or the recent Cumulus purchase or Aurora. No decline in values in either case. They will provide financing under conventional terms, given that there is no indication that license vvalues have declined. In fact, the value of assembled clusters is probably greater than that of the individual parts since other clusters can no longer be formed in most markets. But, and the big but, is CCU's ability to use equity financing to obtain capital. Also neglected is the possibility of bonds or convertable obligations, which should probably have a good market given the low yields on more traditional instruments. Even at the current $50 level, CCU is not that far off its all-time highs, and a large chunk o' change could be obtained without a substantial dilution of existing equity positions. Good will on a radio station balance sheet is there due to an APB ruling that divides the purchase price of a station into license value and goodwill. We all know that the goodwill is just a componant of the license value. Does not look that way to me. EBITDA is adequate to sustain operations, and is probably better than many other American corporations that are similarly or more leveraged. Looks pretty reasonable to me. A/R for radio consists of three componants, local sales, agency sales and rep sales. Each has a slightly longer payment cycle, and major market stations have a bit more on the street than small market ones due to the higher percentage of agency/rep sales. The number does not look alarming. I'd look at CCU to sell a non-core asset before any broadcast stations; they have a lot of different avenues to proceed down if they indeed have a crunch. Which I do not see conclusively that they do. Actually, radio is not seeing anything near that significance in A/R aging or a significant increase in bad debts. Enron did not use radio, and I have not heard of a major increase in bankruptcies at consumer goods or retail companies. I'm not going to continue, since so much of your argument is based on the mistaken impression that license values are in decline and the misconception that goodwill is really considered separately from license value in a lending committee decision. Plus, you ignore debt and equity offerings as solutions to any cash crunch. Just not realistic. Now, were the economy to go into a true deep recession, things would change... but not just for CCU. We would see heavily extended companies like Cisco or ones with market share issues like Gateway and Motorola crash first. IOW, don't hold your breath. Name: Coast2CoastFM Date: 1/14/02 8:48 p.m. In Reply To: Re: Rumors, Rumors, Rumors: What's Up At Clear Channel? (David Eduardo)Trouble is, david, as a former owner (I remember you from RRB) you look at things logically, not emotionally like laid-off CCU employees, who of course want CCu to go bankrupt and see a federally-mandated end to voicetracking and a return to live personalities 24/7 even at distant rimshots. If its a six station cluster, dammit, six people need to be sitting behind six consoles at all times! And being a public service, the stockholders should be willing to take extreme financial losses to keep jocks employed! Name: David Eduardo Date: 1/14/02 9:29 p.m. In Reply To: Re: Rumors, Rumors, Rumors: What's Up At Clear Channel? (Coast2CoastFM)You have a point. While I don't agree with the way much of radio is headed in the last few years, I think that the industry will self-correct before it self-destructs, just as it has in the past. And someone turned on the "deja vu" sign; when I came into radio, there were almost identical arguments about the elimination of board ops and transmitter engineers. "Radio is on the decline..." arguments abounded and, guess what? Technology used to simplify radio operation actually was a benefit. I guess lessons of history are lost on most... Name: Kent E-Mail: kentahrens@sprintmail.com Date: 1/14/02 6:01 p.m. In Reply To: Rumors, Rumors, Rumors: What's Up At Clear Channel? (The Outsider)Chapter 7 is the equivalent of saying, "I give up!" and folding everything. Chapter 11 is a reorganization. I think Chapter 11 would be more likely if Clear Channel were to file bankruptcy, which I doubt at this point, but we'll find out in the next few days if this rumor is true. Name: Billy G. E-Mail: bgspradlin@hotmail.com Date: 1/14/02 6:40 p.m. In Reply To: Re: Rumors, Rumors, Rumors: What's Up At Clear Channel? (Kent)As a former CC employee who got canned because of voice tracking, I would LOVE to see this happen, I would love to see CC go down in a Enron-style crash and burn! San Diego DJs You Admire
San Diego DJs you admire
Posted by The BIG ONE on 1/7/2002, 11:10 pm
Board Administrator
What DJs do you guys think are cool past or present?
I give props to
Dave Mason K-Joy/KOOL
Cha Cha Channel 933
Karen K formerly of Q106.
Jeff and Jerr Q106/B100/Star 100.7
Tony and Kris KSON
Brandi Z90
List yours(yes you can list the above in your personal list if you wish.)
Re: San Diego DJs you admire
Posted by dancelover on 1/8/2002, 7:34 pm , in reply to "San Diego DJs you admire"
Krazy Jay Nelson, formerly of Z90, was the best!!!
Re: San Diego DJs you admire
Posted by Brandon on 1/8/2002, 9:51 pm , in reply to "Re: San Diego DJs you admire"
Danny Romero - B100
Chuck "Boom Boom" Cannon - Q106
"Boy Toy" Jessey - 933
Gregg Simms - Star
Re: San Diego DJs you admire
Posted by Tom on 1/15/2002, 2:24 pm , in reply to "Re: San Diego DJs you admire"
Hands down the best now is Dave, Shelley, and Chainsaw....in the past Berger and Prescott in their KGB days.....
Messageboard Chatter: VariousAnd now kids, let's go visit the messageboards and read some of the stuff people are talking about.FORUM HOOOOOOOOOOOOOOOOOOOOO.............. Subject: Why did people complain about Mix 95.7 so much? B94.9 is much worse! Posted by 80s freak on 1/28/2002, 4:23 pm "I don't know what people on this board think, but I remember some people on other boards (SC groove, laradio.com) talking about how lousy Mix was. Even though it was owned by the "eeeeeeevil" CC, it at least had a decent playlist. Mix at least played semi-rare songs some of the time, while B almost never plays anything that is at all rare. Also, it seems like I could always hear a song on Mix that I hadn't heard on it before, but lately B's playlist has stayed fixed -- I haven't heard anything on B now that I hadn't heard several months ago, and most of the songs that made Mix a reasonably good 80s station are not played at all on B94.9. "It seems like B strictly follows a playlist of the songs that have been found to be the most popular with 80s listeners, and plays NOTHING else. To be sure, Mix focused on these types of songs, but at least played SOME other songs. People always complain about how Clear Channel does "cookie cutter" formats but B94.9 is one of the worst and few people other than Ben Shaton seem to say anything about it. Couldn't B at least OCCASIONALLY play a song outside of its extremely limited playlist? I'm sure B could play one or two semi-rare songs an hour without alienating any of its listeners." Subject: Z90 Selling Yet?? Posted by Luda on 1/29/2002, 12:50 am "Victor, would you please sell the station and get it over with? I'm tired of waiting to hear a better sounding CHR Rhythmic station. The music doesn't flow and the jocks are soooooo unfocused. I can understand trying to be creative, but damn, they are all over the road. We don't care to hear all that chatter. Shut up already and play da music!! "Help!!! Someone buy it or simply pull the power cord!!!" Subject: Did Clear Channel Punish Britney Spears? Posted by Glenn on 1/28/2002, 17:46:10 Somewhat a repeat of a previous post but the Britney Spears angle is cute. DID CLEAR CHANNEL PUNISH BRITNEY SPEARS? Congressman Alleges Radio Retaliation Against Music Stars January 25, 2002 By Ira Teinowitz WASHINGTON (AdAge.com) -- A congressman today asked the Justice Department to look into allegations that Clear Channel Communications refused to play music and "buried" concert ads of recording stars, Photo: APBritney Spears on stage. including Britney Spears, who didn't use its promotional services. U.S. Rep. Howard L. Berman, D-Calif., said he is concerned about growing "integration" in the radio, TV and concert promotion industry. Clear Channel is the largest radio and out-of-home media company in the country. It owns radio stations and outdoor boards in addition to its entertainment venue, Clear Channel Entertainment. In a letter to the Justice Department, Rep. Berman wrote, "It has been reported that Clear Channel has 'punished' recording artists including Britney Spears for their refusal to use its concert promotion service, Clear Channel Entertainment, by 'burying' radio ads for their concerts and by refusing to play their songs on its radio stations." In the letter, Rep. Berman warned that if the allegations are true, there would be "negative implications for consumers." "The consolidation of the radio industry also lends growing support to persistent allegations that record companies often must pay radio stations to play the music of their artists." Rep. Berman said he has also asked the Federal Communications Commission to look at whether Clear Channel illegally holds too many radio properties to comply with commission ownership limits. In a statement, Clear Channel said that it "competes aggressively, fairly and totally within the law. If there is an investigation, we are confident this will continue to be proven true." |