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. Continue reading “iHeartMedia At Debt Wall”
FCC and Pirates: A War of Words
The rhetoric’s heated up, for sure. Commissioner Mike O’Rielly, who’s made cracking down on unlicensed stations one of his signature issues, calls them infectious squatters, casting the phenomenon as a cancer preparing to metastisize. And he’s gotten much more critical about his own agency’s handling of the problem: when the FCC proposed to fine a Kentucky couple more than $144,000 last month for operating a low-power TV station for nearly twenty years after its original license had expired, he likened FCC enforcement to “a sometimes annoying, sometimes sleepy, but ultimately harmless Chihuahua when it came to protecting broadcast spectrum licenses.”
That makes “paper tiger” sound almost tame.
Industry trade-press has taken the cue and upped their coverage of the FCC’s anti-pirate broadcast enforcement. Radio World trumpets warning lettters, fines, and threats of fines issued by the Enforcement Bureau as if they’re landing knockout blows. It even got Chairman Ajit Pai to concede in a March interview that pirates are a “serious concern.” Continue reading “FCC and Pirates: A War of Words”
The FCC's Trumpian Shift is On
The governing paradigm in contemporary U.S. communications policy is genuflection to principles that invoke the “free market,” especially post-1980 when economics captured the policymaking process. As such, all Federal Communications Commissioners, regardless of party, will couch their positions and rationales in this language, though nearly all also make the effort to connect their rationales to something akin to “the public interest,” which has been the principal ideal as mandated by the agency’s own authorizing statute.
But the FCC’s also been a safe space for the occasional ideologue who worships capitalism as the human condition most worthy of emulation. It is not a radical notion to believe that an economic theory may not be an appropriate paradigm by which to organize all of the workings of an entire society. Folks who do believe that are market-fundamentalists; and whether it comes in economic, political, or religious flavors, fundamentalism is an extreme that the act of being civilized tends to temper. Continue reading “The FCC's Trumpian Shift is On”
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.” Continue reading “Radio Finance Capital: Dominos Aligning”
Ajit Pai's Forked Tongue on Media Freedom
His boss has repeatedly asserted that journalists are the “enemy of the people,” but when FCC Chairman Ajit Pai was asked directly at a Senate hearing earlier this month whether he agreed, he skillfully talked around it. Claiming reluctance to “wade into the larger political debates,” Pai commented that he believed “that every American enjoys the First Amendment protections guaranteed by the Constitution.”
After the hearing, 13 Senate Democrats sent Pai a letter asking for more detail on his commitment to press freedom, and his response was perfunctory – though he did assert that he thought Trump was talking about “fake news” being the enemy, not legitimate journalism.
Unfortuantely, Pai’s past actions as a lowly Commissioner completely contradict these claims. There are two cases that make this plain. Continue reading “Ajit Pai's Forked Tongue on Media Freedom”
O'Rielly Talks Tough on Pirates to Senate
Keeping in line with the Trump administration’s penchant for dehumanization, FCC Commissioner Mike O’Rielly used some of his time testifying in front of the U.S. Senate Commerce Committee last week to hype his signature issue: going to war on unlicensed broadcasting.
Calling them “squatters” who “are infecting the radio band,” O’Rielly whipped out all the now-familiar canards: that pirate radio “stations” (his quotes, not mine) somehow harm “consumer services” (whatever those might be), “emergency communications” (lacking any meaningful evidence that this is a tangible problem), and “the financial stability of licensed radio stations” (nah, that’s Wall Street’s fault). He references a claim from the Massachusetts Broadcasting Association that it’s identified some two dozen pirate stations “operating in one of their markets” (most likely the Boston metro area) and the numbers are growing. Continue reading “O'Rielly Talks Tough on Pirates to Senate”
Radio Industry's Money-Flings
The money-shuffle has intensified in the radio industry as of late:
Clear Channel iHeartMedia: Still saddled with more than $20 billion in debt – of which more than $8 billion comes due in 2019 – the company’s going to great lengths to shuffle revenue between its subsidiaries to keep on top of its obligations. The latest move involves iHeart’s outdoor billboard division, one of the more financially solvent of the bunch, turning over nearly 90% of its latest quarterly dividends to the parent company.
In addition, iHeart filed papers with the Securities and Exchange Commission recently regarding the potential for its outdoor division to acquire the intellectual property to the words “Clear” and “Channel.” This sounds like the corporate version of scrounging for change in couch cushions; no word on how much those two words, separately or in conjunction, might actually fetch.
iHeart’s recent debt-exchange, for which it traded notes due in 2018 for paper payable in 2021, was classified by Moody’s Investor Services as a combination “distressed exchange (DE) and a Default due, in part, to the extension of the maturity date beyond its initial terms and the company’s very high leverage levels,” further observing that “the company will remain poorly positioned to withstand an economic recession or any material weakness in terrestrial radio in the future.” Continue reading “Radio Industry's Money-Flings”
Now They Tell Us: FCC, Congress Rethinking Enforcement Drawdown?
Radio World revealed earlier this month that the acting chief of the Enforcement Bureau, Michael Carowitz, held a videoconference with members of the Bureau’s field-agent staff. The call revealed that the FCC’s downsizing of its enforcement resources has begun, with 11 field offices closed over the last several months (Anchorage, AK; Buffalo, NY; Detroit, MI; Houston, TX; Kansas City, MO; Norfolk, VA; Philadelphia, PA; San Diego, CA; Seattle, WA; Tampa, FL; and San Juan, PR) and 14 remaining open.
At present, that leaves just 34 field agents covering the entire country – this includes one of two roving “Tiger Teams” of agents organized to backstop the decimated staff in-residence. That’s almost a cut of half from the prior force of 60 that spanned the nation. It’s also important to keep in mind that these agents are responsible for enforcing all FCC regulations, not just the broadcast license requirement. Continue reading “Now They Tell Us: FCC, Congress Rethinking Enforcement Drawdown?”
FCC Anti-Pirate Enforcement in 2016: Symbolic Inflationism Ahoy
A surprising uptick in the Enforcement Action Database for 2016: 201 total actions were logged last year, which is up from the prior two years. Furthermore, the frequency of threats of fines and actual fines against unlicensed broadcasters also rose: 9 NALs issued for a total of $155,000, and 5 forfeitures handed out for a total of $65,000. We haven’t seen numbers this large since 2014.
It gives some statistical credence to recently-former FCC Chair Tom Wheeler’s assertion that, despite the agency’s admittance that its license-enforcement protocol is effectively broken, it hasn’t ceded the field entirely. Unfortunately, statistics can be fudged, and the FCC’s done that well in the last year. Continue reading “FCC Anti-Pirate Enforcement in 2016: Symbolic Inflationism Ahoy”
Digital Radio: Norway and U.S. Pursue Different Paths, Yet Share Uncertainties
There’ve been some interesting developments in the digital radio realm over the last couple of months. The one that’s gotten the most press is Norway’s decision to begin shutting down its FM radio stations in favor of its DAB/DAB+ digital radio network. This has been a long time in coming, first proposed in 2015 by the Norwegian government and with buy-in from the country’s national broadcasters. That’s an important point, because the FM-shutdown, as reported in various press outlets, insinuates that all FM broadcasting in Norway is being silenced immediately.
Not true: the shutdown of stations that began this month, and continues incrementally throughout this year, only affects the country’s national broadcasters; local FM stations have at least another five years on the air before they, too, may be asked to cede the analog airwaves. A lot can happen in those years…at present, the popular sentiment in Norway about the FM shutdown is running 2-to-1 against it, especially as the analog stations disappear, their coverage areas are not served by DAB/DAB+ to the same extent as they were with plain ol’ FM, and Norwegians find themselves forced to buy digital receivers to stay engaged with radio.
It comes as no surprise that American journalists, seeing themselves at the center of the universe, would pose the question: could such an analog/digital shutdown happen here? If they were more knowledgeable about the digital radio technologies that exist they’d know the answer is no, as the U.S. has elected to use its own homegrown and proprietary digital radio technology, whose adoption is entirely voluntary. There’s also the fact that Norway only has a population of five million people — equivalent to the state of Wisconsin – and navigating a shutdown in a nation with 64 times the residents means an entirely different transition-mechanmism, which hasn’t even been seriously consered by any constituency here. Continue reading “Digital Radio: Norway and U.S. Pursue Different Paths, Yet Share Uncertainties”