And yet that's not what happened at either Cumulus or iHeart. Meet the new boss, same as the old boss. The Fields have far more equity participation than was the case in either Cumulus or iHeart. Lenders like management with skin in the game. If anything, they want to build incentives.
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Audacy granted a 30 day extension to make its missed bond payment
- Thread starter MarkW
- Start date
And yet that's not what happened at either Cumulus or iHeart. Meet the new boss, same as the old boss. The Fields have far more equity participation than was the case in either Cumulus or iHeart. Lenders like management with skin in the game. If anything, they want to build incentives.
Bear in mind the Cumulus executive management change occurred after the company's dire financial straits were apparent.
Berner was hired to help prepare for - and lead the company through - its chapter 11 reorg. She went through a Chapter 11 with Reader's Digest if my memory is correct.
That said, you are certainly correct regarding Bob Pittman and his team.
I have no idea if Field will survive as CEO or not. I'd say it's a coin flip.
Berner was hired to help prepare for - and lead the company through - its chapter 11 reorg. She went through a Chapter 11 with Reader's Digest if my memory is correct.
That said, you are certainly correct regarding Bob Pittman and his team.
I have no idea if Field will survive as CEO or not. I'd say it's a coin flip.
It was basically a palace coup. The board threw out the company's founder, a second generation radio owner, and replaced him with a favorite of one of the investment companies who was on the board. My view is that both she and Pittman did what the board wanted them to do, which is why they were retained. This is a very different situation.
But using a similar example of the Mays family, by the time everything had gone through the reorg process, the Mays were pushed out. None of the lenders or receiver was willing to take a chance with the whole 'what's the definition of insanity'-situation.
Not exactly true. The reason the company went private in 2008 was so the Mays family could cash out. That's what put the company into $20 billion in debt. Pittman became CEO in 2011. Mark Mays was the last of the family in the company, and he left the board in 2015. The bankruptcy came after that.
Clear Channel including Lowery and the Mays brother's were in deep kimchi with the creditors. You're right that they set up what amounted to a platinum parachute for themselves, but it was made very clear by creditors that they would have no part of running of the future incarnation of the company. That's the parallel I see with Audacy. With the possibility of a default, there's no way the banks/investors will allow the Fields' to run running whatever the company morphs into very far in the future. Now, whether the parallel is that Joe and David have some form of a parachute, remains to be seen.
But they did. Mark Mays was CEO of the company for three years after the privatization. And remained on the board until 2015.
The creditors voted to keep Bob & Rich, and signed them to a 3 year deal after the bankruptcy.
I expect Joe & David to have either equity or their own side company. They will get something.
Not exactly. The Mays family and "Red" saw that the valuation of the enterprise was never going to be higher. The euphoria of consolidation was now fading after a decade of transactions pushing up values, and it was time to sell. The investment bankers involve in the LBO thought they were paying a fair price.
Then the recession started and the bankers wanted out. They sued. They lost, and had to close. The enterprise was, by the end of the recession, worth less than half of what it had sold for. The outdoor and venue divisions were gone, and those were more solid. It was pure radio now facing the new Smart Phones, the PPM and the tail end of a recession.
Bottom line was Chapter 11.
The other part of this that people forget is that Cumulus and iHeart bankruptcies were both pre-covid. The one thing Field has consistently brought up in the investor conference calls is the affect covid had on radio in general and Audacy specifically.
But as I recall, Clear Channel had violated some of their loan covenants around that time too.
Depending on the market size, many of the assets devalued much more than half around the recession.
Clear Channel Outdoor was around longer than the Clear Channel broadcast properties and is still around today.
Here's a pretty good timeline:
New 8K just posted.
The payment grace periods will expire now on Friday unless a consensual form of agreement for a restructuring is reached, in which case the grace periods would be extended into January.
The creditors have been exceptionally patient; they clearly want to go into court with a prepackaged filing or avoid having to go to court to implement the restructuring if at all possible.
It wouldn't surprise me if the December 15 deadline to reach agreement is extended yet again.
The payment grace periods will expire now on Friday unless a consensual form of agreement for a restructuring is reached, in which case the grace periods would be extended into January.
The creditors have been exceptionally patient; they clearly want to go into court with a prepackaged filing or avoid having to go to court to implement the restructuring if at all possible.
It wouldn't surprise me if the December 15 deadline to reach agreement is extended yet again.
I agree and believe the timing is nobody wants to touch this thing until Q1. The creditors will need lawyers and the courts to push, but everyone is out for the holidays until February. I suspect that's when the heat will pick up again.
Here's an analysis on the negotiations:
www.insideradio.com
More Time For Audacy, But Bankruptcy Still Possible As It Keeps Talking With Lenders.
Audacy may not have reached a deal with its lenders to restructure its debt, but it continues to get more time. The company has signed a12th amendment to its credit
Guessing they are also shopping court venue now for January filing, most likely either Delaware (typically faster venue) or Southern NY (where Cumulus filed). Eastern PA less than half the judges of those two, so I would be surprised if they go for the home venue.
Here's an analysis on the negotiations:
More Time For Audacy, But Bankruptcy Still Possible As It Keeps Talking With Lenders.
Audacy may not have reached a deal with its lenders to restructure its debt, but it continues to get more time. The company has signed a12th amendment to its credit
That article is not well written. The article makes it seem as if the grace period countdown has been reset at zero, when in fact, the start date remains the date each payment originally came due.
The 45 days, for example, actually expire December 15 relative to the most aged payment delinquency, not 45 days from yesterday.
Here's another article:
radioink.com
Looks like he read your post
Friday Could Make Or Break Audacy - Radio Ink
All eyes will be on the company leading up to Friday as Audacy works with lenders to reduce the risk of defaulting on its debt.
radioink.com
Looks like he read your post
It will be interesting to see if a new 8K filing occurs Monday.
I suspect the second lien lenders want the first lien lenders (with regard to any equitized portion of their claim) to accept a combination of preferred (maybe convertible preferred shares) and regular common shares so that the second lien lenders can receive a higher proportion of initial common shares (and thus receive the ability to appoint a couple of the directors).
If all shares in newco were strictly common shares, I don't see how the second lien lenders would receive more than a very small percentage, per my prior remarks.
I suspect the second lien lenders want the first lien lenders (with regard to any equitized portion of their claim) to accept a combination of preferred (maybe convertible preferred shares) and regular common shares so that the second lien lenders can receive a higher proportion of initial common shares (and thus receive the ability to appoint a couple of the directors).
If all shares in newco were strictly common shares, I don't see how the second lien lenders would receive more than a very small percentage, per my prior remarks.
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This isn't going to help the situation:
www.insideradio.com
So Audacy overpays to buy this company, and then the staff sues them because they don't make enough money?
Writers Guild Files Complaint Against Audacy After Mailchimp Refuses To Work With Unionized Staff.
Pineapple Street Studios employees have filed an unfair labor practice charge with the National Labor Relations Board against parent company Audacy alleging it has been engaging in bad faith bargaining
So Audacy overpays to buy this company, and then the staff sues them because they don't make enough money?
No 8K filing as of yet, which is odd. Certain deadlines came & went both last Friday (12/15) and yesterday (12/18).
Perhaps we'll see an 8K filing later today announcing an agreement-in-principle to restructure the debt has been reached between the company and majorities of each class of debt holders?
Perhaps we'll see an 8K filing later today announcing an agreement-in-principle to restructure the debt has been reached between the company and majorities of each class of debt holders?
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