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I heart may be going belly up!
- Thread starter blackgold
- Start date
But what will that mean? Will the average listener notice any difference? Or is it just a behind the scenes changes? I'm sure the same GM's will stay working at each station, the same people will program, the same jocks....etc...
A Chapter 11 bankruptcy, were it to happen, means that operations continue, certain debts are discharged and the company keeps going. This is what the two Detroit automakers went through and, other than top management, operations continued.
It does not mean that assets will be sold off; that is a last resort. Radio stations have few hard assets so ongoing operations are what gives stations value.
I suggest that IHeart sell the stations to local groups and have them program in their market. We can get local d.j.s AND promotions. Also, they should add hourly news and weather reports on the top of every hour, day and night. That way, people can know what's going on. Plus, all dayparts should be done with local talent, not with voice tracking. And most importantly, the d.j.s should be able to play whatever they want, instead of sticking to a national playlist!
More likely, EMF is licking its chops at the prospect of getting primo signals at a fire sale price in numerous markets to program with Jesus Pop 24/7.
And stations currently riding high in the ratings will plummet, while ad agencies abandon them. Mom and pops might want to support them, but only at Market No. 275 rates.
The vast majority of the iHeart properties are big cash flowers. As such, if any pieces of iHeart were sold, they would go at the highest prevailing multiples.
The inferior signals and imperfect AMs will go for what they are worth, irrespective of whether iHeart is in Chapter 11 or not.
The real issue is that were iHeart forced into a Chapter 11 reorganization, operations would continue as normal under the oversight of a trustee. Were the trustee to find that the sale of some assets was appropriate, it would likely be the non-producing ones, not the high rated major market stations. Or they might sell non-core assets like the remaining interest in outdoor, and things like RCS.
First, most people do not want news anywhere in the hour outside of mornings on music stations. There are probably tens of thousands of individual station research studies done over the last 4 decades or so that prove this and show what a tune-out they are.
Second, the only reason more stations were not voice tracked decades ago is that the technology did not exist or was too expensive and difficult to manage. Yet many formats... top rated ones... in the 70's were voice tracked, so it is nothing new.
Third, "DJ picks" versus researched listener picks will always produce near the bottom ratings.
Fourth, there really are no national playlists. Most larger market stations do local research to determine what to play, what to drop and what to move up and down. While in any format most hits will be the same nationally, there will be differences in flavor, blend and rotations in each market. It's been that way since all-music radio started in the 50's.
Fifth, in most formats "local talent" is a myth. In mostly music formats, there is nothing "local" to talk about and today's audiences don't want a lot of chatter from the radio. For chatter, they have Facebook and Instagram and all the other social media resources. In that case, the sources are not local but personal... and that wins over a DJ on the radio in most formats. Radio has changed to adapt to its new role and listening to a DJ under the blanket at night is not part of the Millennial experience.
If iHeart does go away, then there might be radio "suicides" basically everywhere iHeart owns the Top 5 stations, even #1 station, from New York to Sarasota. 
Or maybe iHeart, like the banks are too big to fail. Probably, probably not. Who knows?
Or maybe iHeart, like the banks are too big to fail. Probably, probably not. Who knows?
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There is a basic reason iHeart and Cumulus won't sell unless they are forced to. Both companies are so large that once they set a multiple of sale, there will instantly be a new valuation placed on the entire company and by extension the whole industry. What iHeart and Cumulus are selling to their investors is free cash flow now and the predicted return of higher multiples somewhere down the road. Current sale multiples are in the range of 6-7 times leverage. The valuation of companies like iHeart, Cumulus and Entercom is based on 8-10 times or more. As recently as 2005, those multiples were near 20. So if they sell or are forced to sell stations (at low cash flow multiples) to generate quick operating income the unintended consequence will be tens of millions of dollars in valuation write down. It's not that they are too big to fail...they are too frail to fail. Voice tracking, local control, etc. has nothing to do with it.
As for local owners buying in if a Cumulus or iHeart fire sale happens, forget it. There is no equity financing for broadcast radio right now. None.
As for local owners buying in if a Cumulus or iHeart fire sale happens, forget it. There is no equity financing for broadcast radio right now. None.
I've always wondered why iHeart owns two of the most popular stations in Boston (WXKS-FM, WJMN) but also two of the turkeys. Why did they buy WKOXKS? Was it "you have to take the AM's if you want the FM's"? I mean 1200 and 1430 have had probably 10 formats between them in 5 years, and nothing seems to work.
1430 came with Kiss 108. Used to bee WXKS AM & FM.
It's likely when it was sold they came as a pair, and Clear Channel figured they could make some money with some added inventory...and with the syndicated programming available to them. And, they don't have to spend any time, effort or money on it...they run it with the staff they have for the FM's. (Originally it was Mia 1430, the Spanish music format.)
1200AM used to be 1190AM, which was 105.7's AM. The upgrades to the signal were thought to put it on par with WBZ, WHDH and WRKO....but, as often happens...not quite. ;-) The thought they could make money with it, making it Boston station with Rush, Glenn, Hannity and Noorey. But, they never got any traction.
These stations run basically with no budget or staff....so there is not much to loose by having a little more presence in the market for Clear channel (and I DO mean little!)
However, it might help them with some male and older demos when they pitch the FM's to agencies. Maybe for bonus spots? You buy on Kiss and we'll run bonus spots on the Limbaugh program.
Some may say it's an easy fix, sell it to the spectrum, if you can do that for AM stations...
Some may say it's an easy fix, sell it to the spectrum, if you can do that for AM stations...
There is no auction for AM spectrum. The frequency band is very narrow (the AM band is just over 1 mHz wide, FM is 20 mHz)
In 1200's case they make a little money by leasing it to Bloomberg just like Ent.
makes a bit of money running ESPN
on 850.That used to be the legendary WHDH then for years was sportsradio EEI before the needed move to FM. 1430 gets to clear the iHeart syndie stuff. If Bittner didn't already have WJIB 740 which is good by day,I could've seen him
trying to get 1430 if the price were right
and iHeart wanted to sell. As it is they
need it to be able to tell advertisers they are clearing Rush,Sean etc in Boston.
Or as said above, using the AMs to pitch
bonus time in luring advertisers.
makes a bit of money running ESPN
on 850.That used to be the legendary WHDH then for years was sportsradio EEI before the needed move to FM. 1430 gets to clear the iHeart syndie stuff. If Bittner didn't already have WJIB 740 which is good by day,I could've seen him
trying to get 1430 if the price were right
and iHeart wanted to sell. As it is they
need it to be able to tell advertisers they are clearing Rush,Sean etc in Boston.
Or as said above, using the AMs to pitch
bonus time in luring advertisers.
I grew up near Wellington Circle and WHIL 1430 was our "local" station. I used to enjoy George Fennel on there a lot. What amuses me is that, although the transmitter/antennas are located in Meffa where they always were, the station is no longer licensed to Meffa because of the night signal.
OK I bite? The tower is in Medford, and on night power it has to cover the C.O.L.,which is now neighboring Everett, which it does,and did when it was C.O.L.'d to Medfa.
What reason would there be to change the City of License unless you were trying to get more power or a different pattern to cover another major city.
There is no valid reason I can think of for that to have happened.
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Leave it to iHate to scramble things seemingly just because they can, I suppose.
For years, after WHIL was retired, 1430 was WXKS-AM, sister station of 107.9 WXKS-FM (aka "PI$$ 108").
Then iHeart purchased and upped the power at - wasting megabucks to do so - 1200 AM WKOX. OK, so everybody's happy, right? NOT!
When iHate had to re-install talk on one of its AM channels, they did so on 1430, which by now was known as WKOX, which call sign had been long associated with Framingham.
Now I wonder if anyone would've noticed if, when Bloomberg began airing on 1200 AM, iHate restored the call letters to WKOX, and gave 1430 the WXKS-AM call sign back. I'm betting nobody would've noticed, except for us radio aficionados. Cases in point: does anyone have a history of all the call signs for AM 1150 and AM 1510 going back, say, 40 years?
(Aside: notice the digits 0,1,1,5 appear in both of the latter frequencies; the middle two digits are transposed.)
If I remember correctly, 1430 was still a daytimer that signed off at sunset when it was still licensed to Medford. When they got the directional lower powered night signal on the air, the COL was changed to Everett, because that night signal didn't adequately cover (west) Medford, but it did (does) adequately cover Everett. I don't remember any period when it was still licensed to Medford after the night signal signed on.
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