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”
Category: AM Radio
iHeartMedia's Thin Skin on Corporate Finances
A funny thing happened just hours after I posted last week’s update on iHeartMedia’s dance with bankruptcy earlier this year: I got an e-mail from a PR flack contesting my analysis. But it wasn’t just any flack — it was Wendy Goldberg, iHeart’s chief communications officer. She was displeased with several points I made.
To begin, Goldberg asserted that I had misconstrued the timeline of events surrounding the company’s near-default. Instead, iHeart conducted a pre-emptive strike against “a small group of lenders” who planned to call in some $6 billion of the company’s $20+ billion outstanding debt burden within 60 days. (This would indeed have immediately tipped the company into default.) Secondly, my she called my assertion that this close call, in my words, worried “the market that the conglomerate is just steps away from bankruptcy” was seemingly, in her words, “confused at best, and speculation at worst.”
Finally, Goldberg took umbrage with my contention that iHeartMedia remains near the precipice: “I am assuming this is your own opinion or speculation, and if so you should either couch it as such or remove it.” Continue reading “iHeartMedia's Thin Skin on Corporate Finances”
iHeartMedia Seeks Pounds of Flesh for Bankruptcy Pressure
After fending off one legal challenge that would’ve sent the company into default, the nation’s largest radio conglomerate now seeks a spot of revenge.
iHeartMedia is heading back to a Texas courtroom in hopes of getting mega-damages out of a consortium of investors who went after the company, serving a notice of default for playing fast and loose with its $20+ billion worth of debt — a strategy which involves iHeart setting up shell companies to repurchase some of the debt it already owes at lower interest rates, while also working to shield some assets from potential creditors. The conglomerate filed suit to stop the default process, and the Bexar County judge sided with iHeart in May. Continue reading “iHeartMedia Seeks Pounds of Flesh for Bankruptcy Pressure”
Bring the Noise (Floor)
In a little-covered meeting earlier this summer, the FCC’s Technological Advisory Council voted to proceed with what could potentially be a controversial study of noise across the electromagnetic spectrum. This two-page PDF outlines the TAC’s proposal and asks several questions about what such a study should cover, and how to go about doing it.
Many FCC-watchers seem pleasantly surprised that the TAC is wading into this mess. The study itself will be broken down along two lines: attempting to quantify interference from intentional and unintentional radiators. Intentional radiators are sources of potential noise that mean to broadcast — think radio and TV stations, wireless routers, and the like. Unintentional radiators are things that emit RF energy (and potential noise) but that is not their primary reason for being — think most electronic devices, older-model LED systems, and whatnot. Continue reading “Bring the Noise (Floor)”
HD Radio: "We're Still Here"
After its lackluster appearance at the NAB Show earlier this year, HD Radio‘s new owners, DTS Inc., are trying mightily to demonstrate that the technology remains a viable future for broadcast radio. In May, DTS announced its first-quarter financials, representing the first full quarter of its ownership of iBiquity. As expected, the acquisition had a positive effect on DTS’ bottom line, no doubt from the revenue stream involving licensing HD receivers in cars (for which the company gets paid as much as $12 per unit).
Presently, however, HD Radio is found in just 37% of all new vehicles sold in the United States — a far cry from widespread penetration, but more than enough to move the needle in DTS’ ledgers. According to a company conference call earlier this year, the acquisition of HD Radio is part of a pivot by DTS away from developing/acquiring audio enhancement systems for home entertainment technologies (which are on the decline) and toward the mobile and portable device spaces (which are growing mightily). By the end of 2016, DTS expects its automotive division (which includes HD Radio) to account for some 40% of all revenues. Continue reading “HD Radio: "We're Still Here"”
iHeartMedia Dodges Bankruptcy, Option Remains
iHeartMedia’s lawyers are probably very happy to see May in their rearview mirrors, after dodging a bullet in a Texas courtroom last week. A friendly judge barred the company’s creditors from seeking notices of default on some $6 billion of iHeart’s $21 billion in corporate debt, racked up primarily from pillaging the radio industry over the last 20 years.
iHeart’s creditors were attempting to call out the company for constructing a shell game in an attempt to keep its debt from crushing it. They noticed last year that the company had begun transferring hundreds of millions of dollars in assets to two “independent” subsidiaries named Broader Media and CC Finco. In simple terms, having already borrowed tens of billions against hundreds of stations, thousands of billboards, and countless other media ventures, iHeart moved some of those assets to “new” corporate parents, thereby creating “new” value against which to borrow even more money. Even better, this shuffle protected those assets against existing debt claims. Continue reading “iHeartMedia Dodges Bankruptcy, Option Remains”
When Will They Learn: Several Radio Stations + One Network Hijacked
Listeners to at least three radio stations and one (unidentified) radio network got quite an earful last week when their programming was hijacked by an unknown hacker. The intruder, who used a search engine of internet-connected devices to find unprotected audio transfer equipment in radio stations/networks’ airchains, was able to compromise several of them because the targeted stations/networks either never changed the equipment’s default password, or they used a weak password that was easily bypassed.
The hacked stations all broadcast episodes of a comedy podcast devoted to furries, a subculture of people who like to dress up (and oftentimes, have sex) in animal costumery. “FurCast” is defintiely not-safe-for-work material, and the stations spent more than an hour airing them. According to the podcast’s producers, they noted a spike of “hundreds of connections” in podcast-download traffic last week, all of which were coming from hacked radio stations/networks, and were able to cut off the OTA simulcasts by changing the IP address from which podcast downloads originate. Continue reading “When Will They Learn: Several Radio Stations + One Network Hijacked”
iHeartMedia's Debt Dance Intensifies
The nation’s #1 radio broadcast conglomerate stands another step closer to defaulting on nearly $21 billion of IOUs racked up during its consolidation and conglomeration spree of the last twenty years. For those just tuning in, iHeartMedia owes nearly $1.4 billion in debt payments between now and 2018, with nearly $200 million of that due this year.
The company announced a curious plan in late 2015 to ask some of its debt-holders to swap existing debt for stock, the idea being to try and retire the pressing debt first and keep the fiscal ship afloat. In practice, iHeart began shifting some of its assets into a subsidiary named Broader Media, which is effectively a subsidiary holding company within iHeart itself. Those who agreed to swap their debt in iHeart would get paid back in Broader Media equity. Continue reading “iHeartMedia's Debt Dance Intensifies”
Window Brings Surge of Translator Deals
On Friday, the FCC opened a six-month filing window for AM broadcasters to acquire existing FM translators, and move them up to 250 miles into their local coverage areas. This is part of the agency’s AM revitalization initiative — though it’s still not exactly clear how FM spectrum fixes AM’s fundamental difficulties.
This window is exclusive to lower-power AM broadcasters; the large “flamethrower” stations will get a crack at the translator shuffle later this summer, and then the FCC plans to open an application window for new translator stations next year. The marketplace for translators, which has been simmering mightily underground for nearly a decade, has fully burst into the mainstream with the FCC’s blessing. Continue reading “Window Brings Surge of Translator Deals”
iHeartMedia Facing Reorganization Pressures
Much interesting news on the iHeartMedia front already in the new year. The wildly overleveraged conglomerate ended 2015 with an announcement that it hoped to convince some of its shareholders to swap debt they hold against the company for stock. It’s assumed iHeart is still on track to try and float this proposal later this spring.
However, it would seem that some shareholders would like to take matters into their own hands. Just days after iHeart announced its swap-plan, the New York Post reported that several large stockholders planned to pressure the company to devote nearly $200 million this month toward debt reduction. This would shave off less than 1% of the $21+ billion the company owes, though it would be a small step toward ameliorating what one unnamed banker calls “clearly not a sustainable capital structure.” Continue reading “iHeartMedia Facing Reorganization Pressures”