K
K.M. Richards
Guest
Yes, let's. This thread has been full of people trying to read the corporate minds of Cumulus and iHeart. As for my opinion, one can make certain inferences about thought processes from syntax.
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Cumulus and iHeart on the ropes
- Thread starter bossbill
- Start date
Yes, let's. This thread has been full of people trying to read the corporate minds of Cumulus and iHeart. As for my opinion, one can make certain inferences about thought processes from syntax.
I'll occasionally watch the Charlie Rose show on PBS, and he had a venture capitalist as his guest one night. They covered a number of subjects, but towards the end, he made a prediction that this year, a lot of companies would focus on dealing with debt. In other words, the past ten years have been about growth, mergers, and building companies, and the next ten years will be about making those companies profitable. I'm already seeing that in both iHeart and Cumulus. Both have built up large debts, and both are examining ways to attack that debt. Earlier posts linked articles about iHeart, and there have been numerous stories about the new Cumulus CEO, who is hiring a lot of top managers and focusing on improving programming. Other radio companies, like Townsquare and Entercom, have been very successful in controlling debt. Emmis, on the other hand, seems to be the company that is at the most risk. But I agree with the analyst who says 2016 will be the year companies attack their debt. It won't be with layoffs or product cuts. It may be with asset sales, public offerings, and perhaps limited bankruptcies. In any case, it will be about accounting and high finance, not programming.
Aahh, the old inferences about thought process from syntax parlor trick. As for me, that was my first post on this thread (or any thread in months) and my words were excerpted from a Bloomberg article.
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Entercom has been especially disciplined over the last decade, negotiating to make large acquisitions and often dropping out when the prices got too rich.
An example of what you're talking about was the bidding for ABC Radio. Entercom wisely dropped out. Citadel ended up buying it, and went bankrupt a couple years later.
K
K.M. Richards
Guest
My apologies. I should have made it clearer that my inferences were directed at earlier posts and posters in the thread.
Posts that directly quote media articles should most certainly not be attributed to the poster.
Thanks. It's fine.
My guess, and it's only a guess, is that iHeart won't be forced into bankruptcy because it won't be in the best interest of the creditors to force it. There might just be a lot of pushing and pulling by each side to negotiate the most favorable cents-on-the-dollar payback.
And iHeart has issued their 2015 report... close to $800 million more loss in 2015, brings the debt to 20.9 BILLION. Inside Radio (owned by iHeart) headlines "iHeart Revenues up 5%". I did read the entire Press Release. I encourage others to do the same and reach their conclusions about their future.
FYI RadioInk, which owns this discussion board, had the exact same headline.
http://radioink.com/2016/02/25/iheartmedia-q4-revenue-increased-5-to-899-million/
Streamline Publishing is the owner of Radio Discussions.
Streamline is also the owner and publisher of RadioInk.
Streamline is also the owner and publisher of RadioInk.
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It's hard to reach conclusions about a private company because a lot of the story is not public. If it was, you'd see that one of their most popular and best known shows is losing money because of diminishing ratings on AM stations and a host salary that was based on pre-2008 revenues. You'd see that the company owns some of the most profitable, highest billing stations in the country. They consistently have three of the Top 5 stations in the country's largest markets. They also own the second biggest digital platform (behind Pandora) in the world. So there's a lot to like.
The debt issue is mainly because of a decision to take the company private at a bad time in the economy. It's not going to be solved quickly or easily. They have close to a billion in the bank. They're still investing in new talent, new products, and new partnerships. It's a growing company with a big debt. The fact is it's still growing. The radio company that's in trouble is Emmis. It's not growing, and it also has a big debt. There are several others in similar shape. Now that it's completed its purchase of Digity, Alpha has a lot of debt. Unlike iHeart, these companies are one-product businesses. Just like Pandora is a one-product business. That's a scary situation. If you're running a company, you want it to be diversified, so if one side of it loses money, those losses can be made up some place else. Most radio companies are not diversified. iHeart is. That diversification will play a part in its future.
My expectation is that iHeart will do what Viacom did when they split the company into two separate companies: CBS Corporation and Viacom. They put broadcasting in one company, and cable in the other. Redstone said at the time that the older businesses were holding back the stock value in cable and new businesses. He was right for a while, and Viacom outpaced CBS 2 to 1 for a long time. Now that's ground to a halt because cable isn't the cash cow it once was. But the idea behind the split could help iHeart resolve a lot of its problems. However, the growth won't be coming from the hundreds of AM stations it owns. Those are the boat anchors. The future will not be good for that part of the business. The digital side of the company is growing. The event side of the company is growing. They have other revenue generators in addition to radio. They have smart managers, and their accountants seem focused on steering the debt towards some kind of resolution in the next few years.
So far, it's "he said, she said." You run a business. How would you feel about outsiders telling you how to run your business? That's what's at stake here.
The bonds those people bought have due dates on them. That's when they're supposed to be paid. They're trying to get paid sooner.
K
K.M. Richards
Guest
Isn't that what happens here at RD on a daily basis (listeners vs. programmers)?
It's been my experience that the ones who complain the loudest are the ones with the least amount of money at stake. So the way I expect this to be resolved is they'll be bought out. The reason it's going to court is to work out the particulars.
K
K.M. Richards
Guest
At the risk of making two bad jokes in a row ...
You say that too loud, A, some of the posters here will expect to be bought out.
They're due at least a portion of what they've put into it. So what would that be? A portion of zero is...
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