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.” Read More

FCC Revises Contest Disclosure Rules; Music and Sports Payola Next?

Last week, the FCC announced changes to its contest disclosure regulations, first crafted in 1976. The changes allow stations to disclose contest rules either on the air or online.

This is the culmination of a Petition for Rulemaking first filed by Entercom in 2012, which the FCC didn’t officially start ruminating on until last December. The proposal attracted fewer than 20 comments, most of them being broadcast companies and state broadcasters’ associations (although NPR was also in the mix) and all of whom supported the proposal. Read More

AM Broadcasters Still Seek Translators, Digital Authorization

When the FCC announced the creation of an “AM Revitalization Initiative” in 2013, the proposal included a grab-bag of industry desires, such as the right for AM stations to utilize FM translators and for AM stations to move from hybrid analog/digital broadcasting to the all-digital AM-HD protocol. But to the consternation of industry lobbyists and HD-backers there’s been no movement on this initiative — so now they’re beginning to whine about it.

Case in point is a commentary published in late June by Frank Montero, an attorney at D.C. communications law powerhouse Fletcher, Heald & Hildreth, which laments that AM broadcasters are being held hostage without access to FM translators and accuses the FCC of playing political football with the future of AM itself. It’s full of questionable assertions and revisionist history. Read More

Broadcasters: Music and Sports Payola is Okay

Several broadcasters have teamed up in a petition with the FCC seeking to change the agency’s sponsorship identification rules. Presently, if an entity pays a radio station to put a program on the air, the station must clearly disclose this relationship on the air at the time the sponsored programming is played. This rule is an old one, first instituted to crack down on the practices of payola and plugola — or the back-channel compensation of radio stations by record labels and promoters to spin their tunes.

The “Radio Broadcasters Coalition” reads like a who’s who of corporate radio: Beasley Broadcast Group, Cox Radio, Cromwell, Emmis, Entercom, First Natchez, Greater Media, Henson Media, and Clear Channel iHeartMedia. Their 20-page proposal seeks to flip the script on payola/plugola disclosures, allowing stations to air music and sports programming that the station is paid directly for without any on-air disclosure at the time of broadcast. Instead, the Coalition suggests that stations engage in a “robust listner education program” about sponsored programming, run “daily announcements” about sponsored programming, and post “enhanced disclosures” online. Read More

FCC Gives Entercom “Bonus” AM Station in Kansas City: A Sign of Things to Come?

In a little-publicized ruling on November 20, The FCC gave Entercom a special waiver involving its expanded AM band radio station in Kansas City. The waiver is disturbing on several levels. But first, some history:

The AM broadcast band used to span from 540 to 1600 kHz. In 1997, the FCC adopted a rulemaking expanding the upper end of the AM band to 1705 kHz. Over the years leading up to this, the FCC had gradually relaxed interference and channel spacing rules for AM stations, leading to lots of interference, especially at night, when some AM stations must reduce power levels or sign off completely. Read More