Mitt Who?

Mitt Romney's favorite Radio Station Owner is in Trouble

This is probably beating a dead horse, (as who remembers Mitt Romney now?), but I just learned that Romney's corporate buyout firm Bain Capital owns the US's largest radio station chain, Clear Channel, which has been the subject of my ire for years.

Clear Channel owns and distributes on its stations shows by right-wing hotheads like Rush Limbaugh and Sean Hannity, and distributes Fox News in radio form. They're by far the largest of owner of radio stations in the USA and also are tops in Billboards. I've written a lot about their past antics here:
http://greedwatch.blogspot.com/search/label/Clear%20Channel
They have in recent years added liberal talk radio shows on some of their lower-rated outlets, so their reputation for being all right wingers has changed in recent years as they've realized that liberal talk sells ads, too.

As this column from my local paper says: "Bain Capitol, the majority owner following a 2008 buyout, must be mighty nervous right now. According to industry estimates and filings with the Securities and Exchange Commission, Clear Channel has more than $16 billion of debt, declining revenues, declining cash flow, and a huge debt payment due relatively soon - with virtually no way to pay it.
This could be the beginning of the end for a company that, in my opinion, never deserved to exist."
from:  http://www.dailynews.com/entertainment/ci_22187319/radio-clear-channel-layoffs-hit-kost-kbig-kysr

Clear Channel is a prime beneficiary (and now a victim) of the US Congress's 1996 Telecommunications deregulation act, which allowed corporate monopolies to gobble up 8 or more radio stations in a market area, instead of the previous limit of 2. The law similarly allows ownership of 2 or more TV stations in a market when the previous limit was 1.

The problem for Clear Channel is they over-borrowed to bulk up on stations, computerized the formats and fired DJs and then faced the wrath of consumers who switched to ad-free ipods and other portable music players. That's when Romney's Bain Capital firm swooped in and bought the place at likely a bargain price. The firm has not recovered, though, and it lost over $400 million in 2012.
http://www.dailykos.com/story/2013/02/20/1188686/-Clear-Channel-Loses-424-Million-in-2012-StopRush-Rolls-On#

Not that Mitt is hurting due to this.

"What it comes down to is that two companies own nine of the top 11 stations in town..."

Clear Channel, CBS stations are dominant in the ratings in L.A.

By Richard Wagoner, Posted: 04/21/2011, http://www.dailybreeze.com/ci_17902877

KIIS-FM (102.7) was Los Angeles radio's dominant force once again, based on the monthly Arbitron ratings released this week. While down a half point to 5.1, the station was still a half point better than KOST (103.5 FM) at 4.6.  With KFI's (640 AM) third-place 4.3 - its highest rating since at least November 2010 - owner Clear Channel had a 1-2-3 sweep. Add in 10th place KBIG (flat at 3.3), and the company had four of the top 10 stations in town - an amazing feat.

But wait: Though CBS didn't have quite the dominance as Clear Channel, it also controlled much of the top 10, with fourth-place KRTH's (101.1 FM) 4.2, a sixth-place tie between KNX (1070 AM) and KROQ (106.7 FM) at 3.5, and a 10th-place tie between Amp Radio (97.1 FM) and sister The Wave (94.7 FM) - matching Clear Channel's KBIG at 3.3.

What it comes down to is that two companies own nine of the top 11 stations in town.

In my opinion, that is market dominance that needs to be broken up. Last time something like that happened, the Federal Communications Commission broke up NBC and forced the launch of ABC, which later became one of America's premier networks...

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Giving “Choice” to a Captive Audience is bad for media behemoths:

The USA’s Biggest Radio monopolies are selling off stations, But sticking with their monopoly on billboards…

With the public turning to digital music players and podcasts, they can avoid the homogenized, ad-packed, junk-radio formats that litter the AM and FM dials in most cities. What they can’t miss, though, are the sky-blocking billboards owned by the same radio behemoths. During the late 1990’s, two corporations went on a deregulation-fueled radio and billboard buying spree. The two, CBS and Clear Channel, loaded up on debt to buy these speculation-steroid-enhanced properties. The results are mixed. CBS has done well, as it is insulated by its holdings in TV and publishing.

Clear Channel, on the other hand, which made its name in the early years of the Bush administration as the home of Rush Limbaugh and countless other right-wing radio hotheads, has lost a ton of someone’s (?) money. Their zeal to buy up radio stations led them to own over 1200 across the U.S. CBS, the next largest owner at its peak had 180 stations. Clear Channel reported losses totaling $21 billion in 2002 and 2005 due to the true value of their radio empire becoming evident, and they have sold off their 56 TV stations and are trying to sell off over 400 radio stations in smaller USA markets. Clear Channel was recently sold to several investment groups for $17.9 billion, after a $19.5 billion deal fell through.

With the economy in the dumper lately, a lot of the USA media are fighting themselves for market share—ah, yes, competition, we haven’t seen that for a while. As the internet has gobbled up ads from daily newspapers, we are seeing hard times for the daily papers that have largely served up corporate press releases to their readers masquerading as news.

Most important to the media monopolies is a “captive” audience. This is when we have over 100 cable channels available to us, but most of them are owned by the 5 media monopolies (CBS/Viacom, GE, Time-Warner, Fox and Disney). For daily newspapers, in most cities in the USA we have only one choice. For radio, the listeners and ad revenues are monopolized by CBS and Clear Channel, who each have 8 radio stations in L.A., for example. The big profit is in the audience having no alternative, and therefore, we are captive watchers or listeners. For example, when I tune into the 6 L.A. rock music stations, and a commercial block comes on, when I switch stations, guess what? They and all the other rock stations are playing commercials, too. Is this coincidence or collusion?

Thanks to my digital music player, I can pack my entire music collection in a little box. I really don’t miss the inane, pre-recorded chatter. I can always look away from the billboards, unless I’m stuck in the gridlocked traffic.

But that’s another rant…

---by Rex Frankel

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CBS to sell 50 of its radio stations:

http://www.latimes.com/business/la-fi-cbs1-2008aug01,0,6157912.story

August 1, 2008

“The New York-based broadcasting company, controlled by billionaire Sumner Redstone, said Thursday that it planned to sell 50 radio stations in a dozen mid-size markets as ad revenue continued to slide in a weak economy. The company's once-mighty radio division continued to produce static and a drag on the company's earnings…

…Just two years ago, CBS Radio boasted nearly 180 radio stations. It has since shed about 40 stations, and with the planned sale of 50 more, the company would cut its holdings to about 90 stations. Included on its roster are Los Angeles powerhouse AM stations KNX 1070 and KFWB 980.

Analyst Tom Taylor said CBS might look to sell stations in such markets as Sacramento, Riverside and Las Vegas to focus on big-market stations that produce greater revenue. The loss of Howard Stern, who defected to satellite radio, continues to be felt, he said.”

http://www.redorbit.com/news/technology/797894/clear_channel_sells_radio_stations_to_rincon_for_173_million/index.html

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Overvalued and Generally Evil, Clear Channel is in Trouble....

(next to Fox, the biggest media backer of the Bush regime)

Clear Channel, private equity firms sue banks
Radio and billboard company claims five banks renege on promise to finance$19.5 billion buyout.
March 26, 2008

http://money.cnn.com/2008/03/26/news/companies/clear_channel/index.htm?section=money_mostpopular

SAN ANTONIO (AP) -- Clear Channel Communications Inc. and the private equity firms seeking to close a $19.5 billion purchase of the company on Wednesday sued the banks backing the deal.

In lawsuits filed in Texas and New York, Clear Channel and the buyers group, led by Bain Capital and Thomas H. Lee Partners LLC, claimed the six banks that promised to finance the deal were reneging on the agreement to provide long-term financing, looking to offer little more than a short-term bridge loan.

"The lenders agreed to provide long-term financing," said Alex Stanton, a Bain spokesman. "They now have lenders' remorse because the credit markets have been difficult."
The lenders, which include Citigroup Inc., Morgan Stanley, Credit Suisse Group, The Royal Bank of Scotland, Deutsche Bank AG and Wachovia Corp., signed commitments when the deal was inked 18 months ago saying they would bear all the risk in changes to the debt market.

In that time, it has become more difficult for the banks to resell the loans so -- instead of sticking with the minimum six years of financing -- the lenders had sought to provide only a short-term loan, the equity firms and Clear Channel complained.

The firms contend the banks are trying to kill the deal by putting unreasonable terms on the loan.

"The behavior of these banks is irresponsible, unprofessional and unjustified. The defendants have made clear that they are determined, by any means possible, to destroy the merger and thus avoid their obligation to fund, as they are required legally to do," said Clear Channel CEO Mark Mays in a statement.

The banks issued a statement denying they failed to make good on their earlier commitment.
"The bank group presented the sponsors with credit agreements fully consistent and compliant with the commitment letter," said the statement issued by Citigroup on behalf of the lending consortium. "We believe the suits are without merit and will contest them vigorously."
Clear Channel shares have been volatile for months. Shares fell $5.64, or more than 17 percent, to $26.92 Wednesday, the day after reports surfaced that the deal was on the brink of collapse. Following the lawsuits, the share price climbed $2.43, or 9 percent, to $29.35 in after-hours trading.

But the share price remains anemic compared with the $39.20 the equity firms agreed to pay for the company. The equity firms say they remain committed to closing the deal. If they don't, they face an estimated $500 million to $600 million in breakup fees.

The deal was scheduled to close by Monday. Failure to close on time opens the parties up to fees and other potential problems.

SMH Capital analyst David Miller said banks that were gladly loaning money for ever bigger leveraged buyouts just a year ago are now concerned about whether the company can generate enough free cash flow to cover the interest payments in a miserly credit market.

The banks are looking at a $3 billion to $4 billion write-down on the loan, so there's obvious incentive for lenders to seek a way to renegotiate or pull out.

Clear Channel has had success before in forcing a deal through legal action. The $1.1 billion sale of its television group closed after the company lowered the price by $100 million and sued Providence Equity Partners, which had been having difficulty getting Wachovia to make good on its earlier financing commitment.

Clear Channel is the nation's largest operator of radio stations, a business that has been stagnant for years as digital music players and satellite radio have siphoned off listeners and advertising dollars.

The company now generates more than half of its revenue from its billboard business, consisting of roughly 800,000 signs worldwide, and that business has been growing as advertisers have shifted spending away from other avenues to billboards, which are harder for consumers to bypass.

Clear Channel Communications Inc. and the private equity firms seeking to close a $19.5 billion buyout of the company have sued their lenders.

The radio and billboard giant filed suit Wednesday in Texas, claiming the five banks who promised to finance the deal are reneging. The private buyers, led by Bain Capital and Thomas H. Lee Partners, also sued.

The banks signed letters backing the deal, but in the 18 months since it was first made, the credit market has gotten much tighter and Clear Channel's stock is now trading well below the $39.20 that the buyers committed to pay.

The private equity firms face an estimated $500 million to $600 million in breakup fees if the deal does not go through.

Shares of Clear Channel closed down 17% to $26.92 on Wednesday as shareholders grew pessimistic about whether the deal would go through.

The buyout was supposed to be completed by Monday.

Clear Channel Agrees to Sell Television Station Group to Providence Equity Partners;

http://www.clearchannel.com/Corporate/PressRelease.aspx?PressReleaseID=1943

(excerpts): SAN ANTONIO – April 20, 2007 – Clear Channel Communications, Inc. (NYSE:CCU) announced today it has entered into a definitive agreement to sell its Television Group to Providence Equity Partners Inc. for approximately $1.2 billion. The sale includes 56 television stations (including 18 digital multicast stations) located in 24 markets across the United States. Also included in the sale are the stations’ associated Web sites, the Television Operations Center, and Inergize Digital Media, which manages the Television Group’s online and wireless initiatives. The transaction is expected to close in the fourth quarter of 2007, subject to regulatory approvals and other customary closing conditions.

The Television Group currently consists of ten CW, eight FOX, seven NBC, six ABC, six CBS, four My Network TV, two NBC Weather Plus, two Telemundo, five independent stations, and six stations affiliated with Clear Channel’s Variety Television Network (VTV). A chart of the individual broadcast properties, by location and network affiliation, is attached below.

Clear Channel estimates net proceeds after-tax and after customary transaction costs will be approximately $1.1 billion for the Television Group. Information on the treatment of tax loss carry forwards relative to this sale is provided below.

UPDATE ON RADIO DIVESTITURES

Clear Channel previously announced that it was also attempting to divest 448 radio stations in 88 markets. To date the Company has entered definitive agreements to sell 161 radio stations in 34 markets for a total consideration of approximately $331 million. The Company expects these transactions to close during the second half of 2007. The Company estimates net proceeds after-tax and after customary transaction costs for these 161 stations will be approximately $300 million. Information on the treatment of tax loss carry forwards relative to these sales is provided below.

The Company continues to pursue the divestiture of 287 radio stations in 54 markets. These remaining stations that are not under definitive agreement had OIBDAN* of approximately $54 million in 2006. There can be no assurance that any or all of these stations will ultimately be divested and the Company reserves the right to terminate the sales process at any time.

More information is available at www.clearchannel.com.

About Providence Equity Partners

Providence Equity Partners Inc. is the leading global private equity firm specializing in equity investments in media, entertainment, communications and information companies around the world. The principals of Providence Equity manage funds with approximately $21 billion in equity commitments and have invested in more than 100 companies operating in over 20 countries since the firm's inception in 1990. Significant investments include Bresnan Broadband Holdings, Casema, Com Hem, Digiturk, Education Management Corporation, eircom, Freedom Communications, Idea Cellular, Kabel Deutschland, Metro-Goldwyn-Mayer, Ono, Open Solutions, PanAmSat, ProSiebenSat.1, Recoletos, TDC, Univision, VoiceStream Wireless, Warner Music Group, Western Wireless and Yankees Entertainment Sports Network. Providence Equity is headquartered in Providence, RI (USA) and has offices in New York and London. The firm is opening offices in Hong Kong and New Delhi.