Keep in mind that iHeart is more than the 840 radio stations. The streaming platform is worth more than $1 billion. The Outdoor advertising part is worth another billion. They do a number of concerts, festivals, and awards shows. They sold the towers and land to Vertical Bridge a couple years ago. But they probably own a lot of studio buildings, equipment, and various contracts. The cash flow of just the radio stations is over a billion, so I'd say the $8 billion figure sounds right.
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Libert Media Makes Offer For iHeart
- Thread starter TheBigA
- Start date
Keep in mind that iHeart is more than the 840 radio stations. The streaming platform is worth more than $1 billion. The Outdoor advertising part is worth another billion. They do a number of concerts, festivals, and awards shows. They sold the towers and land to Vertical Bridge a couple years ago. But they probably own a lot of studio buildings, equipment, and various contracts. The cash flow of just the radio stations is over a billion, so I'd say the $8 billion figure sounds right.
W
WhoseLineFan
Guest
This does not look like a good sign.
https://www.bloomberg.com/news/arti...edium=social&cmpid==socialflow-twitter-tictoc
https://www.bloomberg.com/news/arti...edium=social&cmpid==socialflow-twitter-tictoc
W
WhoseLineFan
Guest
On the other hand, it will be good to finally get rid of the $20 billion albatross.
It's clear that the Board has decided they want to keep current management to get the company through the process. So they're now saying "Let's light this candle!"
It's on the low side, but that is how you go into a deal. If you assume assumption of $5 billion in debt after Chapter 11, and the company is worth around $7 to $8 billion, Malone's offer is not far off the mark.
It also pre-conditions the lenders as to what they can expect, insuring that expectations are not set too high.
Exactly....it's obvious the Board is keeping current management, and has laid out some tempting bonuses if they can turn the boat around quickly.
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WhoseLineFan
Guest
No it won’t be good if they go bankrupt.
They really have no choice. They've lived with the debt for ten years, they've dutifully paid the installments for ten years, and they've obviously decided to move on.
Yes there are negatives in declaring bankruptcy. It will be more difficult for them to get credit moving forward. They want to do an IPO, and that will be difficult.
But it appears that they've weighed the options and decided this is the best course.
Sometimes the best option is the only option left on the table. Bankruptcy 101. I know we have discussed performance issues (i.e. revenues generated) could not possibly be enough to cover the extreme/crazy debt service. They sank their own ship by having to have all the big guns at gold plated prices.
I have made many good business decisions and a few really bad decisions over the years. The one constant - never pay more than you ever should for any business even if you gotta have it (or better yet "accept it's obligations. because you would have similar expense if you were starting fresh.) I bought a radio station for $1 once. Then paid a ridiculous building rent and tower rental fees, etc. The most damn expensive $1 that I have ever spent. Thankfully, said company in this discussions (well a precursor) lifted the disaster off my shoulders and yeah.....they probably are still paying until today. Uh-oh....am I obligated 23 years later? I was so young and carefree back in the 90s.
Maybe "them" not being able to get more money or do an IPO is a blessing TO THEM!!!
I have made many good business decisions and a few really bad decisions over the years. The one constant - never pay more than you ever should for any business even if you gotta have it (or better yet "accept it's obligations. because you would have similar expense if you were starting fresh.) I bought a radio station for $1 once. Then paid a ridiculous building rent and tower rental fees, etc. The most damn expensive $1 that I have ever spent. Thankfully, said company in this discussions (well a precursor) lifted the disaster off my shoulders and yeah.....they probably are still paying until today. Uh-oh....am I obligated 23 years later? I was so young and carefree back in the 90s.
Maybe "them" not being able to get more money or do an IPO is a blessing TO THEM!!!
W
WhoseLineFan
Guest
I’m just hoping they don’t go bankrupt and are saved.
W
WhoseLineFan
Guest
They had plenty of opportunities, but they blew it.
Paying what they did at the outset isn't the beginning, middle and end of iHeart's problems. Bain played its game, making money every time it re-sold iHeart's debt.
iHeart isn't going into chapter 11 because of DJs or lack of same, playing or not playing stiffs, etc.
iHeart isn't going into chapter 11 because of DJs or lack of same, playing or not playing stiffs, etc.
Keep in mind that Toys R Us recently went bankrupt. It was a similar Chap 11 bankruptcy to what iHeart is doing. The majority of its stores are profitable, and they'll remain open and staffed. But there were some stores that were losing money. Those stores are closing down. I'm expecting something like that with iHeart.
PTBoardOp94
Walk of Fame Participant
I expect Toys 'R' Us to go into liquidation by February 2019. They seem to be on the same death spiral that companies like Sports Authority were before them. Undifferentiated products, a store base that hasn't been renovated in 20 years, and increasingly competitive stances in the toy space from Walmart, Target and Amazon. Reportedly, Toys 'R' Us revenue fell 12% in the last months of 2017, compared to 2016. That doesn't suggest to me a few dozen underperforming stores, but a chain whose relevance has faded.
iHeartMedia has a more favorable business outlook, at least in the 1-5 year timeline. There are only a handful of competitors who are in all the top markets. The biggest risk is a flurry of revenue leaving traditional broadcast media for new media.
iHeartMedia has a more favorable business outlook, at least in the 1-5 year timeline. There are only a handful of competitors who are in all the top markets. The biggest risk is a flurry of revenue leaving traditional broadcast media for new media.
But they are better positioned in new media than any of their competitors. And if they are combined with Sirius and Pandora under Liberty, they will be even better positioned than ever.
That's a good analysis, but I don't think there is a big risk of that. Radio revenue has largely stabilized, and is even growing, albeit slowly. The share of total media that radio occupies will shrink, but with reduced debt, iHeart should be able to operate well with industrywide revenue of as little as $15B, and it's been running at about $18B. Plus, I think they've done an incredible job of leveraging their terrestrial assets on the iHeart platform to the point that the platform is seriously devalued without the integration of the stations.
I think this restructuring will end up being good for the industry.
I doubt Toys 'R Us will be in liquidation that quickly, but it is likely to happen at some point, or they continue as an online only retailer with perhaps a few showrooms. Their problem is less debt as it is a business model being surpassed by other retailers. iHeart's big issue is the debt load at this point.
And the doomsday clock that would have stopped automatically is now magically transformed into a parking meter. Looks like some folks want to talk. May I take the liberty of saying there is a chance all parties may use common sense and take the lumps now and give back more later. $5B value, sans spinoffs and hopefully a nice synergy that keeps radio on the cutting edge and takes it off the twenty year cutting block. One could only dream. Se A Vida E.
Radio is much more of a good venture than Toys R Gone. I think that even at $1 sq foot rents, the concept still could not dig itself out. They need to be absorbed by Amazon and create an exclusive partnership. and I don't say that often about working with Amazon. Big A, remember our conversation a few years ago about the "regional" Whole Foods? Not big enough to matter, yet not going away. Now look at it's potential potential, if done right, it could dominate Kroger, Walmart and probably everyone except Aldi, Trader Joe's and Liedl (as it grows in America.)
I guess in this brand new day, anything is truly possible.
Radio is much more of a good venture than Toys R Gone. I think that even at $1 sq foot rents, the concept still could not dig itself out. They need to be absorbed by Amazon and create an exclusive partnership. and I don't say that often about working with Amazon. Big A, remember our conversation a few years ago about the "regional" Whole Foods? Not big enough to matter, yet not going away. Now look at it's potential potential, if done right, it could dominate Kroger, Walmart and probably everyone except Aldi, Trader Joe's and Liedl (as it grows in America.)
I guess in this brand new day, anything is truly possible.
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PTBoardOp94
Walk of Fame Participant
Toys R Us could announce its liquidation on Monday, according to the Wall Street Journal and Bloomberg.
https://www.bloomberg.com/news/arti...-to-be-prepping-liquidation-of-u-s-operations
https://www.marketwatch.com/story/t...eparing-to-liquidate-all-us-stores-2018-03-08
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