That's being very generous. A lot of them are worth under a million. But that's why the market cap isn't reflective of anything.
The other question is who would buy them? Not a lot of people willing to spend a lot for dying technology.
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Cumulus and iHeart on the ropes
- Thread starter bossbill
- Start date
That's being very generous. A lot of them are worth under a million. But that's why the market cap isn't reflective of anything.
The other question is who would buy them? Not a lot of people willing to spend a lot for dying technology.
Stations in sub-100 markets are seldom worth ten million. I would bet the average value of the iHeart properties in those markets is under $2 million and with all the dog AMs in the portfolio, likely nearer $1 million.
A lot of commentators will often point to how CC "overpaid" for a lot of stations back in 2000. My view of that is a bit different. They were buying groups, not stations. Some stations in those groups were cash cows, and some were dogs. One goal of the 96 Act was to force companies that wanted to buy successful FMs to also buy money losing AMs. It obviously was successful, and companies like Citadel and Clear Channel gobbled up lots of FM and AM combos. Looking back, you wonder why would they ever have bought some of these dog AMs. The answer is they often came in a package with some very successful FMs. The company should have spun off those AMs at some point before the crash. I think they were required to keep them for a period of time. But obviously they missed the opportunity to sell, and now they're stuck with a bunch of boat anchors.
joebtsflk1
Star Participant
Yes, I was being very generous with my $10 million/station estimate. Even with that high figure, selling off everything below market 100 doesn't do much to eat away at that multi-billion dollar debt. I doubt selling everything below market 50 would be enough.
The thing is they've been selling off assets, such as towers and various non-core businesses, and churning the money into operating expenses rather than paying down the debt. That's what the issue is with the lenders. So it's not that they don't have money available to deal with the debt. It's that they've chosen to route it elsewhere.
Just yesterday they sold a half a billion in outdoor advertising in some relatively small markets. Perhaps that money will make the investors happy.
Just yesterday they sold a half a billion in outdoor advertising in some relatively small markets. Perhaps that money will make the investors happy.
iHeart owns many more things besides radio stations. And no one is pressuring them to sell anything.
Remember that the US has $18 trillion dollars in debt, and lots of that debt is held by foreign countries like China. Are you worried about the US going broke?
Add it up, the math isn't very difficult. Everything is heavily financed. Show me the significant assets and a scenario for iHeart to dig out of this rather large hole without creditors taking a long giant bath. No one is pressuring them to sell anything... except the creditors and equity partners.
I'm not sure what the US National debt has to do with anything. The Feds can print money, control interest rates, etc. iHeart can't. I don't think the US will default, but it is absolutely certain that iHeart will.
I'm not sure what the US National debt has to do with anything. The Feds can print money, control interest rates, etc. iHeart can't. I don't think the US will default, but it is absolutely certain that iHeart will.
K
K.M. Richards
Guest
Have you any news articles, press releases, etc. to back up that opinion, presented as if it were fact?
I don't work there, but even I know that they own much more than just radio stations.
If it's so easy to solve the US debt situation, why hasn't anyone done it? The debt keeps growing. They can't print more money. More money dilutes the dollar and wrecks the balance of trade. It's a very complicated situation, as is the iHeart situation.
The internet is filled with iHeart haters. You're better than that.
It's not a matter of being a "hater". And I really don't understand what the national debt has to do with iHeart. Let's check back on this iHeart situation, and Cumulus for that matter, in two years, and see what has happened with the creditors and the business models. My primary issue with the consolidators, including the ABC/Citadel/Dial-Global/Westwood/Jones/Waitt/Cumulus fiasco and the numerous consolidations leading up to the current "iHeart Media", is that with every consolidation and every new debt holder, the industry loses jobs held by talented people, resulting in entire market clusters with large virtually empty office and studio space, announcers having to do double and triple duty air shifts, voice-tracking pretending to be live, and nobody home nights and weekends. Market revenues fall as rate integrity disappears, causing even deeper cuts in employees.
K
K.M. Richards
Guest
I'm fine with that suggestion, provided you don't treat us to reruns of your previously-rebutted opinions in the interim. Okay?
Because debt is debt, regardless of who has the debt, including the government. Lots of government workers have lost their jobs, and lots of government services have been cut, and the reason often given is cutting government. But the debt remains, even though the services are gone. Very similar to the situation you're describing.
"In a deal announced Thursday, Lamar Advertising Co. of Baton Rouge, Louisiana, has purchased outdoor advertising concerns operated by Clear Channel Outdoor Americas in five U.S. regions. Proceeding in two transactions valued at $458.5 million, the first deal includes markets in Reno, Nevada; Des Moines, Iowa; and the Tacoma-Seattle metroplex. The second transaction includes outdoor markets in Cleveland and Memphis."
Read more here: http://www.thenewstribune.com/news/business/article53744315.html#storylink=cpy
Lamar stole these operations.
Read more here: http://www.thenewstribune.com/news/business/article53744315.html#storylink=cpy
Lamar stole these operations.
As discussed earlier in this thread, iHeart has lots of assets to sell before they go belly up. They're still generating lots of cash flow. As reported today, they also have a plan for dealing with the debt:
http://radioink.com/2016/02/04/bloomberg-iheart-has-a-plan-to-tackle-some-debt/
http://radioink.com/2016/02/04/bloomberg-iheart-has-a-plan-to-tackle-some-debt/
Bloomberg reports only that iHeart is "considering" a plan to deal with 6.8% of their debt and "discussing" plans to deal with more debt with its private equity owners.
"IHeartMedia Inc., the radio broadcaster struggling under $20.6 billion of debt, is considering a potential bond or equity offering to pay off its most-pressing obligations and buy time to improve earnings, according to a person with direct knowledge of the matter. The company would sell securities in one of its units to retire $1.4 billion of bonds the parent is responsible for paying, said the person, asking not to be identified because the discussions are private."
"The cheapest of the obligations being targeted for paydown traded Wednesday at less than 39 cents on the dollar, after losing more than half of their value since February, according to data compiled by Bloomberg."
Source: http://www.bloomberg.com/news/artic...h-bond-exchange-before-wall-of-debt-comes-due
"IHeartMedia Inc., the radio broadcaster struggling under $20.6 billion of debt, is considering a potential bond or equity offering to pay off its most-pressing obligations and buy time to improve earnings, according to a person with direct knowledge of the matter. The company would sell securities in one of its units to retire $1.4 billion of bonds the parent is responsible for paying, said the person, asking not to be identified because the discussions are private."
"The cheapest of the obligations being targeted for paydown traded Wednesday at less than 39 cents on the dollar, after losing more than half of their value since February, according to data compiled by Bloomberg."
Source: http://www.bloomberg.com/news/artic...h-bond-exchange-before-wall-of-debt-comes-due
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How long have they had this debt? Somewhere between 7-8 years. Right? So now they're considering and discussing. Right? Why is everyone so hyped up? They seem to have the situation under control, and the creditors aren't actually threatening to call in their loans, right? So let's move on.
K
K.M. Richards
Guest
I think it's all wishful thinking on their part, A. They're just hoping and praying that something will take iHeart down in flames. No amount of facts or logic will cure that mindset.
Let's stick to facts and not try to read minds.
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