Big-Fish Radio Capital Shaky in 2017

The second fiscal quarter’s come and gone, so it’s worth reviewing how the first half of the year’s played out for radio’s big-fish investment-games:

Clear Channel iHeartMedia: The #1 radio conglomerate in the country just extended its long-term debt refinancing offer to reluctant bondholders for the twelfth time. While going through those motions a key coalition of creditors — who hold more than 10% of iHeart’s $20+ billion debt – have been mulling over the implications of tipping the company into Chapter 11 bankruptcy.

Apparently, they’ve devised a plan by which if they’re given 49% of the company’s equity and more favorable debt-repayment terms, they’ll keep the debt-refinance shuffle going. After missing a full payment in 2016 the company ponied up on schedule this summer toward debt due in 2021. More than $8 billion comes due in 2019. Read More

iHeartMedia At Debt Wall

Looks like the time is nigh for Clear Channel iHeartMedia to pay the piper.

Those who hold a significant portion of iHeart’s $20+ billion in debt are balking at the company’s attempt to kick the can down the road. This spring, iHeart floated proposals to creditors to extend the time the company gets to pay back on its debt while pegging a higher interest rate and some equity to the revised payback-plan. The offers were roundly rejected – fewer than 1% of existing note-holders accepted the terms, and now the company’s repeatedly extending the deadline to creditors hoping they will accept it. Read More

Radio Finance Capital: Dominos Aligning

It’s not a long line of dominos – just three in particular – but if they begin to fall you can bet there’ll be collateral damage throughout the radio industry.

The most wobbly of the three is Cumulus Media. The #2 radio station conglomerate in the country by stations owned, the company just can’t get a break with its turnaround endeavors. After an 8-to-1 reverse stock split last year which temporarily raised its share-price above the critical $1 floor for listing on NASDAQ, the company’s gone underwater again. Thursday’s trading-close saw CMLS shares at just under 27 cents, making for a total market capitalization just above $8 million. That’s about half of what it was just a month ago. Earlier this month, NASDAQ started the delisting-clock again, which means Cumulus has six months to implement a revival-plan and stick to it.

Of course, the aggregate value of Cumulus’ hundreds of radio station licenses is multiples higher than the market value of its stock, but most definitely not enough to cover the $2+ billion in debt it carries. A refinancing proposal using stock imploded last month, prompting Bill Cunningham in Media Life (just before it shut down) to observe that “Unless some white knight comes along, Cumulus has no choice but to file for bankruptcy protection. It could come in a matter of weeks.” Read More