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I'm glad I acquired shares through the Disney deal (seemed Goofy at the time). Then immediately sold them to buy some Bud stock, which in turn headed for Belgium. All I'm left with is cash (and not much of it). Dang - you're right - what's next.
Steven21 said:How does Farid keep his job?
1. Packed board.
2. Nobody else wants it.
Citadel Broadcasting filing for new name: Citadelisted Broadcasting.
JohnW said:What's next?
Chapter 11
Debaser said:Better yet, Fagreed (as Jerry Del Colliano calls him) gets his $11,000,000 in salary...and Citadel PAYS HIS TAXES!!!
If I were a shareholder I would insist the board of directors all be investigated for this travesty, at the very least.
I've seen the SEC filing, and that is NOT his salary. That is a bonus he received in 2007 for closing the ABC deal. When his 2008 salary is released it'll be a fraction of that.
Yeah, Fagreed only makes $1.5-million "base" salary (plus bonuses). He got a $10-million bonus for engineering the deal that took the company down the tubes.
What do you want to bet that he still gets a bonus for 2008? Or, that he'll hang onto his million plus until they drag him out of his office kicking and screaming?
At least the ancient Romans were honorable enough to fall on their sword when they failed. He won't even admit that he screwed up and resign.
What do you want to bet that he still gets a bonus for 2008? Or, that he'll hang onto his million plus until they drag him out of his office kicking and screaming?
At least the ancient Romans were honorable enough to fall on their sword when they failed. He won't even admit that he screwed up and resign.
SirRoxalot said:At least the ancient Romans were honorable enough to fall on their sword when they failed. He won't even admit that he screwed up and resign.
No, he won't be getting a bonus in 2008. He also owns millions of shares of stock in the company, all of which have lost 99% of their value. He has a vested interest in the company succeeding. Everything he did was done with the complete approval of the stockholders and the Board. If you're going to blame anyone, you really have to blame them all. And when you think of the ABC deal in terms of when it was proposed, it seemed to everyone to be a good idea at the time. Truthfully, when you compare Citadel with all the other radio companies, there isn't much he could have done that would have changed the outcome. To put it simply, this is not a good time to own radio stations. The other thing is who would want to replace him? Who would want to walk into that situation at this time? Do you have a candidate you'd like to nominate for execution? He made this bed, he has to lie in it. The captain is being made to go down with his ship.
TheBigA said:SirRoxalot said:At least the ancient Romans were honorable enough to fall on their sword when they failed. He won't even admit that he screwed up and resign.
No, he won't be getting a bonus in 2008. He also owns millions of shares of stock in the company, all of which have lost 99% of their value.... He made this bed, he has to lie in it. The captain is being made to go down with his ship.
Me thinks (to respond to the twin metaphors) there's a freshly made bed and a private lifeboat if not yacht tied to the back of that ship, awaiting the Farid and Judy Show. "Heard on the street" has Farid telling anybody who'll listen that it was Ready Teddy Forstmann's idea to buy (Reverse Morris Trust) the ABC stations. "I didn't do it!" Farid as Bart Simpson. Better he should man-up and use with the line from Animal House, "Hey, ya fugged-up, ya trusted us!"
You need to read the SEC filings a little more carefully. Fagreed did get some stock as part of his bonus, but they weren't regular shares - they were "special" shares. Anybody want to bet that the prices was guaranteed at a certain level, with the possibility of an even bigger bonus if the stock went up?
Fagreed was the prime mover on the ABC acquisition. His spreadsheet magic was what convinced Teddy Forstmann that it was a good idea, and Fagreed was the one who outbid Entercom and several others to get the Disney deal done. He missed playing with the big boys in the big markets, and wanted a seat in the better NY restaurants with CBS and Clear Channel. EGO was the player here, not good financial sense.
I fully blame the board for not doing "due diligence" on the numbers presented by Farid & Co., and for not looking askance at his "revenue projections" in light of radio's "challenges" post 9/11. For Teddy Forstmann, this is going to be a black eye. This is a life-changing event for people at hundreds of radio stations. They've done their jobs so successfully that people like Farid have purchased the stations that they worked for, only to fire them because the company paid too much. The result? The value of the stations declines even more, which makes the debt mountain even higher as revenue drops.
Admit the mistake. Declare Chapter 11. The stock is at NINE CENTS. There's no value left for stockholders anyway. The creditors will then have to decide whether to attempt a restructuring, or just liquidate. Either way, the debt burden declines, station values go back to more realistic levels, and good people go back to work producing good radio for listeners. Farid pulls the ripcord on his platinum parachute, and slinks off into his diamond-encrusted retirement lair. Hey, if he's the first to pull the plug, his name will at least go down in history.
Fagreed was the prime mover on the ABC acquisition. His spreadsheet magic was what convinced Teddy Forstmann that it was a good idea, and Fagreed was the one who outbid Entercom and several others to get the Disney deal done. He missed playing with the big boys in the big markets, and wanted a seat in the better NY restaurants with CBS and Clear Channel. EGO was the player here, not good financial sense.
I fully blame the board for not doing "due diligence" on the numbers presented by Farid & Co., and for not looking askance at his "revenue projections" in light of radio's "challenges" post 9/11. For Teddy Forstmann, this is going to be a black eye. This is a life-changing event for people at hundreds of radio stations. They've done their jobs so successfully that people like Farid have purchased the stations that they worked for, only to fire them because the company paid too much. The result? The value of the stations declines even more, which makes the debt mountain even higher as revenue drops.
Admit the mistake. Declare Chapter 11. The stock is at NINE CENTS. There's no value left for stockholders anyway. The creditors will then have to decide whether to attempt a restructuring, or just liquidate. Either way, the debt burden declines, station values go back to more realistic levels, and good people go back to work producing good radio for listeners. Farid pulls the ripcord on his platinum parachute, and slinks off into his diamond-encrusted retirement lair. Hey, if he's the first to pull the plug, his name will at least go down in history.
Wrong Again
That's flat out WRONG. The former ABC properties are the ones with the largest revenue drops, and a huge debt load. The former Citadel stations are not only paying off the debt incurred in their acquisition, they're paying off a disproportionate amount of the ABC "merger" debt.
"Citadel" would have survived without the "merger", with a lot fewer cuts in both people and benefits. Now, the only question is how long Citadel will pay Farid millions before they're forced into bankruptcy.
TheBigA said:It really doesn't matter whose idea it was. They bought them, and they own them. Even if they hadn't bought ANY more stations, their situation wouldn't be a whole lot better.
That's flat out WRONG. The former ABC properties are the ones with the largest revenue drops, and a huge debt load. The former Citadel stations are not only paying off the debt incurred in their acquisition, they're paying off a disproportionate amount of the ABC "merger" debt.
"Citadel" would have survived without the "merger", with a lot fewer cuts in both people and benefits. Now, the only question is how long Citadel will pay Farid millions before they're forced into bankruptcy.
A
AndrewLawson
Guest
Element9 said:Citadel Broadcasting filing for new name: Citadelisted Broadcasting.
Could be Deficitadel Broadcasting.
Re: Wrong Again
You don't seem to understand my point. There are a lot of other radio groups that haven't bought any stations, and haven't merged with anyone, that are basically in the same place as Citadel, and are handling it the same way. They may not have as much debt, but the amount of debt doesn't matter. When banks aren't loaning, it doesn't matter if you need a billion or 25,000. Citadel was struggling as a small group before the merger. A quick look at their P&L from 2004 will tell you that I'm right.
SirRoxalot said:"Citadel" would have survived without the "merger", with a lot fewer cuts in both people and benefits.
You don't seem to understand my point. There are a lot of other radio groups that haven't bought any stations, and haven't merged with anyone, that are basically in the same place as Citadel, and are handling it the same way. They may not have as much debt, but the amount of debt doesn't matter. When banks aren't loaning, it doesn't matter if you need a billion or 25,000. Citadel was struggling as a small group before the merger. A quick look at their P&L from 2004 will tell you that I'm right.
TheBigA said:SirRoxalot said:"Citadel" would have survived without the "merger", with a lot fewer cuts in both people and benefits.
You don't seem to understand my point. There are a lot of other radio groups that haven't bought any stations, and haven't merged with anyone, that are basically in the same place as Citadel, and are handling it the same way. They may not have as much debt, but the amount of debt doesn't matter. When banks aren't loaning, it doesn't matter if you need a billion or 25,000. Citadel was struggling as a small group before the merger. A quick look at their P&L from 2004 will tell you that I'm right.
Checked the P&L and looked at the 10Q and the numbers from 2004. Struggling? No. Running tight? Yes. Take a look at the debt ratios. BTW, throwing numbers around in this thread like deuling MBAs just bores the pisski out of other readers (and me too.) Citadel would have been far healthier without the Reverse Morris Trust acquisition of ABC. Though we sometimes disagree, I'll go along with Rox on this. Times would be tough for a small-medium market Citadel, but the company more likely in the mode of Saga, would be in a better position to withstand the current economy. And that observation comes from a person of authority within the company.
Element9 said:Times would be tough for a small-medium market Citadel, but the company more likely in the mode of Saga, would be in a better position to withstand the current economy. And that observation comes from a person of authority within the company.
Just as a reminder, here's what I said: "Even if they hadn't bought ANY more stations, their situation wouldn't be a whole lot better."
I stand by that statement.
Also, Saga was a much healthier company in 2004 than Citadel. Back then, Saga stock was trading at $80, while Citadel was under $20.
TheBigA said:Element9 said:Times would be tough for a small-medium market Citadel, but the company more likely in the mode of Saga, would be in a better position to withstand the current economy. And that observation comes from a person of authority within the company.
Just as a reminder, here's what I said: "Even if they hadn't bought ANY more stations, their situation wouldn't be a whole lot better."
I stand by that statement.
We've seen you "stand by" a lot of statements. Your credibility ain't exactly "coin of the realm".
TheBigA said:Also, Saga was a much healthier company in 2004 than Citadel. Back then, Saga stock was trading at $80, while Citadel was under $20.
Well, DUH. Citadel had just rejoined the market as a publicly traded company with an IPO in 2003. The IPO price was around $20 - probably a fair valuation for the company at the time - and likely a lot closer to reality than Saga's $80.00 per share. That would make Citadel a "healthier" company than Saga at that point because its shares were more appropriately valued.
Share price continued to fall until the ABC "merger", when it really headed down. Citadel - in its previous incarnation before Forstmann-Little bought it in 2001 - had been as high as $80.00. In other words, Farid has overseen a precipitous drop in stock value throughout his tenure.
Hey, at least Saga is still listed on the NYSE. Check back on CDL next week.
SirRoxalot said:I fully blame the board for not doing "due diligence" on the numbers presented by Farid & Co., and for not looking askance at his "revenue projections" in light of radio's "challenges" post 9/11.
But they did. You forget that after he took the numbers to the board, they sent him back to Disney with new demands. They realized that ABC people were overpaid, the stations were in decline, and demanded to change the deal. The bad news was the industry collapsed further and quicker than anyone realized. Hindsight is 20/20. But to say they didn't question the purchase is playing with the facts.
As for Chapter 11, it's pretty obvious to anyone that you are seeking vengence, not value for stockholders.
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