Bluewater Files Chapter 11

[WBGR FM 93.1]

Chapter 11 is just a new era here in America. It's not the end, just a stumble Look on the bright side: Bluewater can emerge stronger after Chapter 11 than before - just like GM- and without the billions of dollars worth of taxpayer money that was wasted in their "bailout." Personally, of the other big media groups in Montgomery, I believe Bluewater has them beat when it comes to programming.

Travis

 

[hound989dog]

34 years for me in the business. I've worked with good people in those 34 years, but none that I respect and appreciate as much as Rick, and Terry. There's a word that has gotten lost in all this candy ass name calling from peanutville...integrity. I have been associated in one form or another, off and on with the Bluewater folks since 2005. Done pretty much every job in the building except engineering. I see more integrity, more dedication to doing things the right way,and people trying to help each other any way they can through these tough times. To hear you speak badly of my friends disturbs me. It always disturbs me o hear people talk about things they know nothing about. As far as the barfight...I'm in. Thanks to Rick and Terry, and everyone else at Bluewater for doing the right thing.

 

[duncanalausa]

i said it once, i'll repeat, someone has a bad taste in their mouth because of some real or imagined slight. there are a few who love to gang up on people, especially those from the dothan area, whom they don't agree with or someone who works for someone they don't agree with.

silly, petty and trite.

 

[Moonshine]

Now we're getting down to the crux of this whole thread .. to many people with no idea what they are talking about .. GM was in sad shape recently .. the government tossed them billions of dollars to get themselve back on track .. no goverenment dollars here just some smart business people getting themselves back on track. Why not sit back and see what happens .. Bluewater is a good operator .. guess some of you smart folks never got yourself into a financial pinch? If you've been in this business very long you know there are lean times and fat times .. unfortunately seems some have suffered more lean than fat times. Give these guys a break .. let's be positive and hope BW knows how to brind "Magic" back to a competitive position in the market .. the entire market will be better when competition dives the market and not a bunch of folks talking off the top of their heads about something it appears they know very little about. Hell I don't know all the ends and outs but I'm willing to cut them all some slack and let's see what happens .. you can always sit back back and say "I told you so" when the dust settles.

 

[Stewy]

I'll agree generally with moonshine's post. A rising tide does float all boats and a dropping one can beach several or even all. You can be the absolute best at programming but if you are in a market with pricing idiots (cheap ch and crum) then your revenue is going to suffer which is possibly what happened to them in the Montgomery market. The other parts of the equation that may have led to the financial pinch is if BW bought into Mont when prices were still at a peak (think they were) and if you financed the purchase with a short note and a balloon one the end (don't know) that would have to be refinanced.

Many, many people jumped into ownership under the above conditions and it was really hard to say no to what was at the time easy financing with still rising property values. Many good radio people (programming and sales) saw no reason to not jump in with both feet. Many former owners cashed out when the cashing was good. Buyers and sellers, that is the capitalistic system with which we perform.

I suggested on these boards (feel free to dig it out if you care to do so, I needn't) that we were going to face severely lowered revenues and valuations and selling prices (for stations). I was right but it brings me absolutely no solace in my correctness because of the many good people that have and are still losing jobs in the radio industry. The industry will come back and if BW gets a few breaks in restructuring they can certainly recover. Just a guess but in Montgomery a good (not just survival) recovery will not happen until the crums and cheap ch are finally liquidated and some rate integrity returns but BW can out last them if they are able to come out of ch11. Other companies both bigger and smaller are in much worse shape than BW.

Now, to make this post actually flow with this thread. In Dothan you do not have to face the desperation of crum and cheap ch almost paying advertisers to get on the air. TRP have everything in the market paid for (I think) as does WOOF (I think) and also as does Wilson (I think) and Weevil (I think). The only one with any debt service MIGHT be Magic but Mr. Durden may have (don't know) already taken care of that with personal money. The problem with competing in Dothan is not as much of a problem with rate issues but with money for the promotional season. WOOF doing a 10K give-a-way with cash is a really strong mark to compete with in this economy. We shall see if anyone of the other groups or stations will step up and play.

Station purchase prices are way down but financing is virtually non-existent so if an owner wishes to sell they will not get much for their property and when that is coupled with all the stations and groups that are going to go into ch7 in the next 4 months that all ads up to the probability that we will never again in this generation see anything even close to the prices of the middle of this decade. Want to be an owner? Gather your pennies boys and girls, snuggle up to your grand mother (if you are her favorite) and get ready to become an entrepreneur. By the middle of this coming January even a part time board op with a little savings and a sweet grandma will be able to be an owner. Just understand that you won't be able to "flip" it and make a quick profit. You'll have to work harder than ever for many years to come AND DO GOOD RADIO! Pack a sandwich and I'll share my seat here on the court house steps.

 

[busterluck]

Facts are facts..the previous poster hit the nail on the head by stating station prices were way out of line with the ability to make debt service. Bluewater was almost 100% borrowed money on stations that were way overpriced for market 151. Newspaper articles about the bankrupcy stated that BW had failed to even keep up with the interest payments on the 15 million borrowed. After 5 years, Alta pulled the plug. Alta Communications is a hedge fund. Most hedge funds loaned out money at very high rates, and some of the banks that paid into Alta now want their money out of the fund, because they see the rapidly declining values of stations. Simply put, the financing bubble broke, and BW and others suffer. The BW folks post forward looking statements on this board that things are normal (they are pretending normal) but it is likely in the long run this bankrupcy will result in changes in ownership control. Alta communications now has 100% control of the fledging BW stations. Maybe the Blue Water folks are nice guys, and fair to the help, but rest assurred Alta Communications wants their money back to pay off the loaning banks and institutions that placed funds into the Alta hedge fund. BW is not alone, I know several other TV stations loaned money by Alta that are being pressed for payments, and hopefully Alta will not fire the bankrupcy gun at them as they did with Bluewater. Bankrupcy is bankrupcy, and that means Hot Water in Montgomery.

 

[sflaboy]

Bustserluck...you are totally misinformed. Please refrain from pontificating about things of which you have a limited understanding. Just some of your mistakes:

Bluewater was not funded with almost 100% borrowed money. Bluewaters equity to debt radio was 2/1.

The stations were purchased at prevailing multiples for 2004. So were many others in that era. In hindsight, maybe overpriced, but we were in good company. Yes, multiples have declined which exacerbates the situation. And yes, multiples may take a long time to return - if ever.

Since 2004, Bluewater has always met all of our obligations, and made our interest payments no matter what the newspaper says. Never missed a one.

Unfortunatly, the notes, which were 5 year notes have matured and due to declining multiples, coupled with a very lackluster econonmy, and a sector that is currently "out of favor", we are unable to refinance. That is pure and simply the problem. We have not been successful in refinancing, and one debt holder who was asked to extend has dug in. Thus Chapter 11 reorganization.

Alta is not a hedge fund. They are a private equity fund.

Alta has not pulled the plug on Bluewater. In fact, as I've stated before, Alta and the Management team have a plan that will be presented to the court on Sept. 24 which leaves the Company intact, converts 5 million of debt to straight equity, and infuses capital back into the company. Even the Seller Note holder has signed on with this plan.

Alta does not have 100% control of the company. In fact, Alta has no standing whatsoever going forward unless the Court approves our plan. The only fiduciary responsibility of Alta and Management is to the Debt Holders at this time - of which Alta is NOT one.

You obviously know nothing about broadcast finance. Senior debt comes first, then, in this case, the Seller paper, then the unsecured creditors, then the Equity (Alta/Peters/McQueen). Under no existing appraisal, or valuation do the equity holders have any standing, or hope of recovering their investment whatsoever. They are 100% out of the money no matter what happens. The fact that Alta is willing to invest significantly more money into Bluewater is a testament to their feelings about the future of the Company, the business plan going foward, and it's management. It is flattering to say the least. They have been and remain good partners with us.

...and just in case you were wondering....

Rick Peters
Cheif Operating Officer/Managing Partner
Bluewater Broadcasting, LLC

 

[Moonshine]

Rick Peters .. thank you! Think I stated earlier there are far to many people making observations and spectulations on something they know very little about. Magic may have it's problems in Dothan and Bluewater may have their obstacles at the moment but both has the opportunity to win! Stay your course and let's see where the chips fall in the coming months and years .. my bet is on Bluewater and the Magic group. In every market there are those on these boards that see doom and gloom and appear to thrive on the negatives and often do not see the positives. Magic did not get to the current level of operation over night and it will take more than a minute to fix it .. Good luck Rick!

 

[Grandpa]

I don't even know Terry Barber, but I liked his response. Chapter 11 is more a sigh of the times than an attack against a company. I know of one company operating right now under Chapter 11 because of unscrupulous business practices from the former owners in an effort to get the company back from the owners to whom they sold it only a few years earlier. There are a lot of reasons for court protection against creditors, and allowing a company to re-organize. Remember Chrysler and Lee Iococa years back? He saved them from Chapter 9! If Bluewater has several people with Terry Barber's credentials and time in the business, they WILL come out of it even stronger. The negative comments I read here seem to come from disgruntled staff with frustration built before bluewater. People with that attitude may be the original problem with the operation? Grandpa KNOWS! Like Terry, I've been around the block a few times. Give them a chance. Stop compolaining and become part of the solution. Get on board or get out of the way!

 

[Tibbs4]

Having brought a few companies out of bankruptcy, and being a firm believer, that it's a last resort (or even after that)
I also am impressed by Terry's openness even in this forum. The obvious facts are that it's tough to generate the revenue
necessary to cover expenses based upon outrageous multiples. When I sold my stations back in the mid-90's, I knew the
elevator was taller than the building and could not say "no" to such lucrative offers. I hated to sell what was the greatest
passion I have known in business, but it made exceptional financial sense. BUT, I also knew that there would be no returning
to the industry because the properties were way to expensive. Just because that's the way it was for the last decade or so,
is not a good reason for any businessman to jump in and I have never met a smart businessman who assumed things will always
remain constant or growth will be guaranteed. Terry, I am sure you agree and we all knew the business would have substantial
hardships with new avenues of entertainment being created hourly and probably we all figured we would hit a few blips in the
economy. That being said, if you're will to discuss it, do you see any major bright spot in the next 90 days regarding revenues
that can help pull you (and all other operators) out of a disasterous 2009? The day I handed the keys over to the now CC absorbed
buyer I had were among the most wonderful days of life. I look at radio now a dozen years later and cannot be thankful enough for
my fortune in getting out at the top. I ask you, how can a company emerge recovered from so many direct hits in such a short time
and remain intact? I seriously see so many business proposals that just don't make sense that I would love to see where you're thinking
is aiming to a bright future. The absolute best luck to you and your team. I hope the stations are sounding better than ever and
revenues are increasing!!

 

[Tibbs4]

Having brought a few companies out of bankruptcy, and being a firm believer, that it's a last resort (or even after that)
I also am impressed by Terry's openness even in this forum. The obvious facts are that it's tough to generate the revenue
necessary to cover expenses based upon outrageous multiples. When I sold my stations back in the mid-90's, I knew the
elevator was taller than the building and could not say "no" to such lucrative offers. I hated to sell what was the greatest
passion I have known in business, but it made exceptional financial sense. BUT, I also knew that there would be no returning
to the industry because the properties were way to expensive. Just because that's the way it was for the last decade or so,
is not a good reason for any businessman to jump in and I have never met a smart businessman who assumed things will always
remain constant or growth will be guaranteed. Terry, I am sure you agree and we all knew the business would have substantial
hardships with new avenues of entertainment being created hourly and probably we all figured we would hit a few blips in the
economy. That being said, if you're willing to discuss it, do you see any major bright spot in the next 90 days regarding revenues
that can help pull you (and all other operators) out of a disasterous 2009? The day I handed the keys over to the now CC absorbed
buyer I had were among the most wonderful days of life. I look at radio now a dozen years later and cannot be thankful enough for
my fortune of getting out at the top. I ask you, how can a company emerge recovered from so many direct hits in such a short time
and remain intact? I seriously see so many business proposals that just don't make sense that I would love to see where you're thinking
is aiming to a bright future. The absolute best luck to you and your team. I hope the stations are sounding better than ever and
revenues are increasing!!

 

[zuzu petals]

I don't even know Terry Barber, but I liked his response. Chapter 11 is more a sigh of the times than an attack against a company. I know of one company operating right now under Chapter 11 because of unscrupulous business practices from the former owners in an effort to get the company back from the owners to whom they sold it only a few years earlier. There are a lot of reasons for court protection against creditors, and allowing a company to re-organize. Remember Chrysler and Lee Iococa years back? He saved them from Chapter 9! If Bluewater has several people with Terry Barber's credentials and time in the business, they WILL come out of it even stronger. The negative comments I read here seem to come from disgruntled staff with frustration built before bluewater. People with that attitude may be the original problem with the operation? Grandpa KNOWS! Like Terry, I've been around the block a few times. Give them a chance. Stop compolaining and become part of the solution. Get on board or get out of the way!

18 days yes it took 18 days for another Blue Water Rah Rah post to appear and bump this thread to the top of the list.
I really thought it would have been sooner, but I guess it took awhile to find a new cheerleader.
I had planned not to post again on this subject, but with the Blue Water "Chapter 11 is Great" propaganda machine back in service
I felt the need. You know, like Fox, fair and balanced.

 

[SKIPPER]

hey zuzu... I don't know who you are... but i know what you are... a dick.

 

[bassassassin]

So is Fox.