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. Continue reading “Big-Fish Radio Capital Shaky in 2017”
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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”
Radio Stocks Spice Books for Year's End
Borrow $1,000 from the bank, and the bank owns you. Borrow $100 million, and you own the bank. This seems to be the mantra for end-of-year finance-maneuverings in the U.S. radio sector. Three companies in particular are making plays:
1. Clear Channel iHeartMedia: After beating back a default-notice earlier this year by some creditors to whom the company owes more than $20 billion in debt, run up in the post-1996 consolidation and acquisition-frenzy, another lawsuit filed in Delaware accusing iHeart of playing fast-and-loose with debt-swapping between subsidiaries has been dismissed.
This has emboldened the company to seek a further renegotiation of a portion of its debt-payments. In a statement released late last month, iHeart announced that it’s asked some investors for the flexibility to “amend their terms,” according to the Tom Taylor Now newsletter. If iHeart gets consent, it may attempt to revise the interest rates on these debt-notes, or swap the notes down the road for other debt instruments at more manageable terms. One anonymous watcher tells Tom that if the company is successful, iHeart’s “debt wall,” or the point where the company ceases to be able to make adequate payments on what it owes, might be pushed back “until at least 2018, maybe 2019.” Continue reading “Radio Stocks Spice Books for Year's End”
More Radio Industry Market-Maneuvering Afoot
Although iHeartMedia’s dance with bankruptcy is widely seen as a key indicator of the health of the radio industry more broadly, that company is not alone in reconfiguring its approach to finance capital. Two other conglomerates are also making moves — one trying to leave the stock-trade behind while another wants to jump back into those waters.
First up is Emmis Communications: the Indianapolis-based company has been hammered in the stock market over the last few years, threatened with delisting by NASDAQ after its stock dropped below $1 per share in 2015. After conducting a reverse-stock split earlier this year (reducing the number of shares in circulation, thereby inflating the price of remaining shares) which brought the company back into compliance, company founder and CEO Jeff Smulyan has announced a $46 million bid to take the company private. Continue reading “More Radio Industry Market-Maneuvering Afoot”
NAB Show Leaves Radio in Shadows
According to reportbacks from the just-concluded NAB Show in Las Vegas, it was a lopsided affair in favor of the future of television. And why not: broadcasters stand to make billions over the next year selling off their spectrum, and those who stay on the air will be rolling out a new digital television standard with new content and datacasting potential.
Meanwhile, the radio industry’s been rocked back on its heels by a slew of bad fiscal news. iHeartMedia, for now, has managed to stave off several billion dollars’ worth of its debt being called in early by angry bond-holders, but the company’s effectively now engaged in increasingly nasty legal maneuvering to decide its debt end-game sooner rather than later. #2 conglomerate Cumulus Media’s still squeezing its broadcast properties also in hopes of keeping bankruptcy at bay. Emmis faces delisting by NASDAQ in early June. Even the relatively fiscally-sound CBS has announced its intent to spin off its entire radio division into a separate company, selling it also seems to be an open option. Continue reading “NAB Show Leaves Radio in Shadows”
HD Radio Sells Out
It’s not quite the IPO payday that iBiquity Digital Corporation’s investors had been hoping for, but it does absolve the company of trying to jumpstart radio’s digital malaise on its own. Last week, iBiquity annonunced it was being acquired by DTS in a $172 million deal.
Who is DTS? Perhaps best known for developing multichannel surround sound technology for the film industry, the publicly-traded company now offers a range of digital audio encoding and processing algorithms that can be found in a variety of media formats and electronic devices. Continue reading “HD Radio Sells Out”
Voltair Controversy: The Seduction of Denial
Next month is the National Association of Broadcasters’ annual radio convention, to be held in Atlanta. I wish I could be a fly on the wall in some select panels and the local off-hours watering-holes. Fireworks are expected over an issue that’s been feistily percolating for more than a year — the integrity of the U.S. radio ratings system.
First, a quick primer about radio ratings in the United States. Administered by Nielsen, the ratings are collected by two primary means: listener diaries and Portable People Meters (PPM). The PPM system is a small pager-like device that selected listeners carry around with them; when exposed to a station’s broadcast, the meter logs the station and time spent listening. How? Stations that subscribe to the Nielsen ratings in PPM-enabled markets broadcast a special audio watermark that is inaudible to listeners, but that PPM devices can hear. The watermark is a 1000-3000 Hz tone; as a proprietary technology, the only way to work out how it really operates is by observing it in the wild or by examining its patents.
When the PPM system was introduced in 2007, it was touted as a new era for measuring radio ratings because listeners aren’t all that great about accurately and meticulously recording all the stations they’re exposed to. For example, radio often functions as background noise in places like restaurants, stores, and offices; when you’re at the dentist are you really paying attention to the smooth/lite pabulum oozing from the waiting room ceiling? Today, four dozen markets are measured using PPM technology. Continue reading “Voltair Controversy: The Seduction of Denial”
An Unwelcome Guest at the NAB Radio Show
This was the first year that I’ve actually attended the National Association of Broadcasters’ annual radio convention. Though I have been to two as a protester: the first in San Francisco in 2000 to let the industry know people were unhappy with their evisceration of LPFM, and again in Seattle in 2002 to culture-jam the airwaves and emphasize the continued vibrancy of electronic civil disobedience.
This time around, I figured things might be different, because I’ve grown a lot in the intervening years, left the radio industry for academia, and just wrote a book about one of the industry’s most pressing problems. Instead, I came away with the uncomfortable realization that the industry remains the purview of a bunch of old white guys wholly detached from reality and happy to keep things that way. Continue reading “An Unwelcome Guest at the NAB Radio Show”
WKRP Reunion Highlights Innovation and Chemistry
Last week the Paley Center for Media hosted a reunion of cast and crew from WKRP in Cincinnati. The show aired on CBS from 1978 to 1982 with an 88-episode run and is still in syndication more than 30 years later. When it first aired, I was too young to appreciate the show, but I grooved on it as a teenager and have to admit that WKRP is partially responsible for my forays into radio. Continue reading “WKRP Reunion Highlights Innovation and Chemistry”
Firming the Foundation for an All-Digital AM Mandate
The quiet collection of "evidence" on which to justify an all-digital HD Radio mandate for AM stations continues.
After some stealth experimentation on a CBS station in Charlotte, North Carolina late last year, there’s word of two other AM stations in the state conducting all-digital broadcast-tests this summer. The guinea pigs were WBT, a 50,000-watt station owned by Greater Media (also in Charlotte) and WNCT, a 50,000-watt (day)/10,000-watt (night) Beasley Broadcast-owned AM station in Greenville.
WBT secured experimental authorization from the FCC to conduct these tests just two weeks before they took place; WNCT also asked for fast-track authority less than a month before its all-digital broadcasts. Continue reading “Firming the Foundation for an All-Digital AM Mandate”