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iHeartMedia moves to put off the inevitable.

C

ContinuousWave

Star Participant
For the second time in September, iHeartMedia is trying to pay off upcoming maturities by replacing them with debt maturing a couple of years into the next decade. Two financial analysis firms said the latest $250M is not a game-changer. The new offering comes atop an earlier $750M offering. They are aimed at closing out items that come due 2016 and moving the due date to 2022.
 
In Washington, they call it "kicking the can down the road." They've been doing it for ten years, and somehow manage to keep the country afloat. As long as Bain doesn't call in the note, they're fine. Pittman has convinced his lenders that he has a plan, and they appear to think it's a good one.
 
They could turn off all of their HDs to save lots of money on the power bills and engineering costs.
 
TheBigA said:
Pittman has convinced his lenders that he has a plan, and they appear to think it's a good one.
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No doubt. I would love to play a game where we all guess what that plan could be but I can't come up with one I believe in. Shrinking expenses only gets them so far, right?
 
In these forums, most of us participate from the point of view that we think we know something about programming and listening. For us, that is where "the rubber meets the road".

Think with me for a minute. Think about the day when Mitt Romney was quite young. Newly printed diplomas under his arm. And he goes to work in the venture capital industry. He turns out to be pretty good at it. Think of all the people working in the offices and cubicles around Mr. Romney through the years. They were trained and tuned to "crunch numbers" and to understand investment plans and vehicles. (I purposely didn't use the word "scheme" because in the mind of many, including me, it is a pejorative word!)

These worker-bees and the investors they work with, care little about what records are played on the radio, what paint formulation a car factory uses, whether a restaurant prepares meals on the spot or brings them in per-prepared from a central purveyor, or how thick the asphalt is in a parking lot of a major real estate development. These number crunching geniuses and these overly (money) endowed high-net-worth investors are much more interested in tax laws, how they can romance the bond market, and what changes will there be in the regulatory schemes than what programming is a current winner in today's broadcast market.

And those of us who don't have lunch with the venture capitalists on a regular basis are really just (quoting Paul Simon's old son) spitting into the wind and tugging on Superman's cape with our arguments about how many days (not years) CC...er I Heart has left.
 
SaltyDog said:
No doubt. I would love to play a game where we all guess what that plan could be but I can't come up with one I believe in. Shrinking expenses only gets them so far, right?
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Exactly. They can't fire their way to saving $21 billion. They have to create some new equity. That's what iHeartRadio is all about. They're building their own Pandora, that they own, that they can sell. Right now it's worth about $5 billion. Truthfully, they need something else. Because the radio stations alone are only worth half of their debt. If they do an IPO, the most they can expect now is $8 billion. That leaves a lot still to pay off, although it's not due for another 8 years.
 
Goat Rodeo Cowboy said:
These worker-bees and the investors they work with, care little about what records are played on the radio...
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That's true and yet, they never pretended otherwise. Think about all the individual station owners who swore they cared about the songs on the radio, who said they lived to serve their communities but when the values jumped, cashed out to the financial sharks. In the end, they were all about the money too. The investors and their worker bees didn't force Mom and Pop station owners to take the money, they just dangled it in front of them.
 
SaltyDog said:
Think about all the individual station owners who swore they cared about the songs on the radio, who said they lived to serve their communities but when the values jumped, cashed out to the financial sharks. In the end, they were all about the money too. The investors and their worker bees didn't force Mom and Pop station owners to take the money, they just dangled it in front of them.
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Consider the life of the Mom and Pop station owners. Some owned in the town where they grew up, but many came to the town from elsewhere in search of that chance to be an owner. They drank and danced on Saturday night with the folks that owned the hometown department store, IGA store, hardware store and Chevy store. On Sunday morning... well... some Sunday mornings, they worshiped with these same folks and heard the Sunday Morning prayer requests for the sick and the elderly. A lot of those folks were in the town where they grew up, and at times the conversation turned to the problems of their aging parents who started the store. And in small towns, one of the mandatory social events is attending the funerals or at least the "viewing" at the funeral home, and these Mom and Pop Owners went home many a night with the opportunity to confront the question: "What the hell happens when one of us is "the guest of honor" out at the cemetery.

And then there were the occasions when you loaded up and drove over to the next county or maybe halfway across the state to attend a funeral of another station owner who just kept on pedaling long after they should have hung it up, and you heard the tales of woe about a confused widow who now owned a radio station and "knew not what to do with the thing!"

Yes, there were some 'reality check events' that sewed the seeds to prepare the Mom and Pop Owners to "take the money and run" when the aggregators came waving the cash around.
 
Goat Rodeo Cowboy said:
Think with me for a minute. Think about the day when Mitt Romney was quite young. Newly printed diplomas under his arm. And he goes to work in the venture capital industry. He turns out to be pretty good at it. Think of all the people working in the offices and cubicles around Mr. Romney through the years. They were trained and tuned to "crunch numbers" and to understand investment plans and vehicles. (I purposely didn't use the word "scheme" because in the mind of many, including me, it is a pejorative word!)
Click to expand...

I have known more than a few venture capitalists over the years. They do indeed crunch numbers and pay close attention to the bottom line. But the best and mos successful ones also pay very close attention to subjective evaluations of the quality of the goods and services that a business depends on to generate profits. Good venture capitalists do not ignore intangibles.
 
Avid Listener said:
I have known more than a few venture capitalists over the years. They do indeed crunch numbers and pay close attention to the bottom line. But the best and mos successful ones also pay very close attention to subjective evaluations of the quality of the goods and services that a business depends on to generate profits. Good venture capitalists do not ignore intangibles.
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Interesting timing in that just yesterday I was watching a YouTube Video https://www.youtube.com/watch?v=HHjgK6p4nrw of Guy Kawasaki's "The Top 10 Mistakes of Entrepreneurs". One of them is "Befriending Your VC". He says that sometimes entrepeneurs fail to realize that even though the VC said: "We are investing in YOU", that goes out the window if forecasts are missed. You want your VC's support? Make your numbers.
 
SaltyDog said:
Interesting timing in that just yesterday I was watching a YouTube Video https://www.youtube.com/watch?v=HHjgK6p4nrw of Guy Kawasaki's "The Top 10 Mistakes of Entrepreneurs". One of them is "Befriending Your VC". He says that sometimes entrepeneurs fail to realize that even though the VC said: "We are investing in YOU", that goes out the window if forecasts are missed. You want your VC's support? Make your numbers.
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You miss my point. All I'm saying is that when a venture capitalist is evaluating multiple opportunities, some of which he'll support and others he will not, intangible qualities are among the factors that are considered. They are not usually the most important, though they could possibly turn out to be a tie-breaker. In short, intangible qualities can help persuade a venture capitalist that a person or organization has a better chance of making the numbers. I never meant to imply that intangibles would cause a venture capitalist to disregard a failure to make the numbers.
 
Avid Listener said:
You miss my point. All I'm saying is that when a venture capitalist is evaluating multiple opportunities, some of which he'll support and others he will not, intangible qualities are among the factors that are considered. They are not usually the most important, though they could possibly turn out to be a tie-breaker. In short, intangible qualities can help persuade a venture capitalist that a person or organization has a better chance of making the numbers. I never meant to imply that intangibles would cause a venture capitalist to disregard a failure to make the numbers.
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Gotcha. You're right.
 
Goat Rodeo Cowboy said:
And those of us who don't have lunch with the venture capitalists on a regular basis are really just (quoting Paul Simon's old son) spitting into the wind and tugging on Superman's cape with our arguments about how many days (not years) CC...er I Heart has left.
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That was Jim Croce, not Paul Simon or any son of Paul's
(song was "You don't mess around with Jim")
 
ContinuousWave said:
That was Jim Croce, not Paul Simon or any son of Paul's
(song was "You don't mess around with Jim")
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You're right. I blew that one. Like the grade school spelling contest, I go to the back of the line. :cool:

I almost lost a job one time over what I think WAS a Paul Simon song. I was in a "finishing school for mainframe computer programmers" and we were learning the fine art of producing proper comments to be buried inside COBOL so years later when a programmer was called out of bed to fix the broken program in time to get the payroll printed by morning or some other earth-shaking computer output he had bread crumbs to understand the logic. We were nearing the end of the course and we were getting a bit giddy after being away from home for 4 or 5 weeks. Just to fill the space with verbiage pretending to be valid comments, we got into a contest to see who could be most innovative. (Our instructor was not aware of all this.) So I did a parody of "Fifty Ways to Leave Your Lover".

When the instructors showed up the next morning to 'comment on our commenting style".... they WERE NOT AMUSED!!!

Their clientele tended to be Fortune 500 companies and we were to wear a suit and tie to work each day when we were on a client site. They assured me they had big time doubts about my suitability for the job.

And I thought music was supposed to sooth the savage beast.
 
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