The "worth" of anything can change. Look at the price of used cars since the Pandemic. Cars usually depreciate. Anyone looking to sell will get a great price. Of course, they'll lose if they try to buy another car. The value of Radio stations has plummeted primarily because investors see little hope of growth...
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Audacy Stock today
- Thread starter Oldbloodandguts
- Start date
There are rules for amortization of intangible assets such as "goodwill". This is where most of the price of a radio station goes, since a $50 million LA station may have a million or so in fixed assets like transmitters and studios and leasehold improvements and the rest is intangible. The value is based on what such things are worth on the market,
In the case of radio, accounting rules require adjustments if an intangible becomes worth less, and this is done via a special charge where a portion of the value is an "extraordinary item" and deducted from income prior to the bottom line in the year the adjustment occurs. This happens in all businesses where an asset is devalued, whether by obsolescence, market conditions, legislation that depletes its values and other factors.
For example, a company buys another company that makes toilet bowl cleaners. It pays millions more for the brand than the value of just the factories and equipment. Later, California legislates against the ingredients used in that bowl cleaner, and the product can't be sold there. The owner will be required by its outside auditor to reduce proportionally asset value of "goodwill" to compensate for a 10% reduction in market; they may also say that the prospects of other states enacting similar rules is great and require a larger write-down.
Depreciation is employed for "hard" physical assets... the transmitter, the studio gear, etc. There are various ways of expensing the cost of those items over its life, ranging from straight-line (same percent every year for a period of years) to "sum of year's digits" and various accelerated formulas that are permitted by the IRS to encourage sales of new "stuff".
I like your hypothetical anti-bowl-cleaner legislation scenario, David. That is SO California that I wouldn't be surprised if it happens.
It did. I tried to order one particular brand on Amazon and got a message saying it was unavailable for shipment to California.
And nearly everything has a warning that it is dangerous. So we ignore them all, as "if everything will kill you, we might as well enjoy it."
try buying a knife, ammunition, or even a screw for a firearm and tell them your address is in Massachusetts
I'm not kidding there re companies that won't ship screws for guns to MA.
I swear to G*d, everything made in the universe has a California Prop 65 warning on it.
Then there is the California Air Resources Board..... nope we can't sent that tuner, carburetor, etc etc etc to Cali because it does not have a CARB certification
(From RadioInsight.com) Audacy CEO David Field on Audacy Atlas divestitures: "Every sale that we've done to date, and every sale that we plan is non-strategic (asset)." Field also notes that $25 million in additional sales are coming.
They received $17 million from the just announced tower sale-leasebacks (six properties).
The real estate sale near Las Vegas (KDWN tower site) netted more than that.
The 10K has not yet been posted for 2022. Should see that by Friday, I would expect. If not, that means they're still trying to negotiate covenant amendments with lenders.
I did not listen to the earnings call; would be interesting to know if that topic came up.
The real estate sale near Las Vegas (KDWN tower site) netted more than that.
The 10K has not yet been posted for 2022. Should see that by Friday, I would expect. If not, that means they're still trying to negotiate covenant amendments with lenders.
I did not listen to the earnings call; would be interesting to know if that topic came up.
Truthfully the asset sales don't help with the debt. When you have a $650 million note due in a year, $17 million is a drop in the bucket. The fact that they can't turn a profit with digital, when everyone else can, says a lot. IMO, some of it has to do with the design of their websites. Some of it has to do with their inability to tell their own story. We really didn't get the answers we wanted. The stock price didn't improve as a result of today's call.
www.insideradio.com
As Digital Growth Slowed, Q4 Revenues Declined 1% At Audacy.
Confronted with what CEO David Field called “challenging ad market conditions,” fourth quarter 2022 revenues at Audacy declined 0.8% year-over-year to $342.0 million, compared to $344.7 million in the fourth
ehhh how many times did Clear Channel kick the can down the road on notes after the 2006 Bain/Lee fiasco?
Oh if you re-fi we will give you interest rates we can't possibly ever repay... but we will tell you radio is going to bounce back. right up until we file the bankruptcy paperwork
Oh ya we sold off all our tower sites to Vertical Bridge and American Tower, and spun off the outdoor advertising subsidiary too
IHrt stiffed creditors to the tune of something like 11 Billion dollars right?
Oh if you re-fi we will give you interest rates we can't possibly ever repay... but we will tell you radio is going to bounce back. right up until we file the bankruptcy paperwork
Oh ya we sold off all our tower sites to Vertical Bridge and American Tower, and spun off the outdoor advertising subsidiary too
IHrt stiffed creditors to the tune of something like 11 Billion dollars right?
When creditors get equity in the company, they don't get "stiffed." The judge makes sure of it. Because moving forward, the money that comes in goes to them. Bob & Rich work for them now. It's a different situation.
Also keep in mind that for 12 years, Bain & Lee collected the interest on the debt. At some point the interest payments exceed the principle. That's what happened to Citadel, and why Teddy Forstmann was able to walk away from his investment. He realized that he already had been paid off. So just walk away.
As a side note, Thomas H. Lee shot himself in his family office in an act of suicide last month. "In a New York Minute," as the song goes.
It's my understanding that senior lenders are protected, first to be paid in the event of a bankruptcy, and often at a premium if not in whole; however widows and orphans gets ten cents on a dollar IF they're lucky.
How many "widows and orphans" were creditors?
Unless those folks were owed money because they owned the cleaning service in one of the markets, there are no such people. On the other hand, if they were shareholders they were not creditors but partial owners.
If you buy stocks, you take the inherent risks of competition, obsolescence, incompetence and plain bad luck. Those who can not afford risks should not take them.
Are you talking about iHeart or Audacy? Because there were no "widows & orphans" in the iHeart bankruptcy. It was a private company. The stock had been bought by investment companies and vulture capitalists. In the case of Audacy, as we said, big chunk of the stock is owned by David & Joseph Field. The rest is owned by investment companies. The widows and orphans got out a long time ago. If they're in mutual funds that include radio companies, that's up to the fund managers to include other companies in their fund mix to offset these losses.
Let's just hope that the 401Ks of a lot of current and former Audacy employees weren't tied up in Audacy stock, and that those who received stock options as performance bonuses cashed out a long time ago. There are still a lot of shareholders who now own worthless stock certificates.
In most companies, an employee needs to be VP or greater to receive stock options as a bonus. Those options can be immediately sold, and if you look at the inside sales reports that have been posted in this thread, you'll see some of those bonus shares have been sold. However, the most recent reports indicate that David & Joseph Field still retain 18% of Audacy stock, and a few months ago, David Field purchased more.
Yes ... those would be included. In a number of markets. Suppliers, local small businesses, and the like, as well as limited share holders.
Audacy, primarily as it relates to this thread, among others, Citadel-Cumulus and non-broadcast entities would also qualify. It's known that iHeart was a horse of a different color.
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There are companies that give local managers (even programmers, sales managers) options to purchase shares in DRIPs, or as an option to purchase within a 401(k) plan. Some companies "encourage" their employees to make company stock part of the 401(k) investment choices. Sometimes these opportunities are discounted (e.g., 10% below a set date's closing price); and sometimes there is a mandated holding period, say of about three months (a quarter) before said beneficiaries are allowed to divest. There are many variations. And yes, sometimes employees do get left holding the bag, not necessarily because they're dumb, but because they believe.
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