Radio-Info news and The Wall Street Journal report Citadel made a $2 miilion interest payment last Wednesday. But the clock is ticking down to the day of reckoning January 15, 2010 when Citadel has to come up with $150 large to stave of bankruptcy in a box. Imagine what the Syracuse cluster will go for when Farid starts spinning off properties like Crazy Eddie sold Sansui stereo receivers back in the day.
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Citadel: Got $150 Million?
- Thread starter Element9
- Start date
I doubt that the entire Syracuse cluster would make much of a dent in that $50-M. Citadel is 3rd in a 3-way race for the dollars. 95X and Lite are a mess. 'NTQ is a winner, but under siege from Clear Channel. It could resemble Clear Channel's Utica Fire Sale.
Sell, sell, sell...everything must go...no reasonable offer refused...how much for that dog (of a station) in the window?
BTW, if they raise the $150-million, that just the INTEREST on what they owe. They still won't have enough to pay down any principle.
Might as well wait for the After Christmas Sale.
I imagine Craig Fox would like to get WAQX back for emotional reasons. It was his first station. But I doubt he's interested in buying the whole cluster. Citadel has had chances to sell stations in other markets and walked away because the buyer didn't want any AMs. That will probably be a stumbling block in Syracuse.
TheBigA said:Citadel has had chances to sell stations in other markets and walked away because the buyer didn't want any AMs. That will probably be a stumbling block in Syracuse.
AM stations can be stumbling blocks, but at least the cluster in Syracuse isn't as bad as it may be in other markets. Citadel has only one AM station in Syracuse. It's not like Clear Channel or Buckley Leatherstocking, who each have two.
ESPN Radio may not be a major ratings-grabber, but at least it's a well-known name and the station gets to stay at 5kW around the clock. That's a lot better than some of these brokered/religious AMs nobody has heard of, transmitting with less power than a lightbulb at night.
Another plus: the local airstaff is just Brent Axe. I assume he's only part-time anyway, since he works primarily for syracuse.com. A prospective owner wouldn't have to worry about the "burden" of any additional full-time salaries or benefit packages associated with WNSS; just whatever part-time money Axe gets. And I'd imagine Citadel's picking up a few extra bucks by letting Time Warner Cable Sports simulcast the show on TV.
I can't blame Citadel for refusing a sale to a buyer who only wants FM stations. The idea of selling a market is to completely leave the market, not to stick around with 1 or 2 lingering AM stations. Even though they could potentially be losing by NOT selling, they could be losing even MORE by staying with just a single station or two. Every radio cluster has services (ie. legal) and jobs (ie. GM, chief engineer, etc.) who are cost-effective because the one person or service can serve multiple radio stations, bringing in multiple revenue streams. Those services and salaries aren't so cost-effective anymore when you're dealing with just one station which doesn't necessarily bring in a ton of revenue. Not to mention, they'd also lose money because they'd likely sell the existing building to the new owner, but they'd need to get a new building for the remaining AM station.
They'll get a buyer eventually. Just look at how Clear Channel finally got out of Utica.
A buyer who wants the FMs bad enough will either take the AM as well, or arrange their own plan to spinoff the AM post-sale.
BobRoss said:They'll get a buyer eventually. Just look at how Clear Channel finally got out of Utica.
Clear Channel got out of Utica for the equivalent of pocket lint. That's about what I expect Citadel to get if they sell Syracuse.
SirRoxalot said:BobRoss said:They'll get a buyer eventually. Just look at how Clear Channel finally got out of Utica.
Clear Channel got out of Utica for the equivalent of pocket lint. That's about what I expect Citadel to get if they sell Syracuse.
Pocket lint is about what Citadel is worth these days, thanks in large part to the dipsticks who've run the company into the dirt. The AM stations in Syracuse, Binghamton and Buffalo won't be a stumbling block for prospective buyers. Should Citadel implode in January '10, there's no guarantee that the company will be immediately sold or split up. It's likely, of course, but it's just as likely that a bankruptcy judge will take into account the wishes of the creditors, discharge Citadel's top management as well as regional VPs and appoint an administrator to oversee the company. If a sale is in the best interest of the creditors, station prices may be determined by factors other than billing and cash flow. More than a few very influential industry experts have offered that sale prices very likely will be determined not on factors relating to cash flow but on factors involving the population and listener baselines. January may be a very cold month at Citadel.
Element9 said:it's just as likely that a bankruptcy judge will take into account the wishes of the creditors, discharge Citadel's top management as well as regional VPs and appoint an administrator to oversee the company.
I have not seen anything that leads me to believe that the creditors want top management dismissed. But if an administrator is brought in, especially one who is an outsider, that's when the REAL employee exodus begins. And those who are less will be making a whole lot less money. In fact, I'm surprised that hasn't already happened.
TheBigA said:I have not seen anything that leads me to believe that the creditors want top management dismissed.
Of course not. Why would they want to break up such a successful team. Farid & Judy are paragons of broadcast management..
TheBigA said:But if an administrator is brought in, especially one who is an outsider, that's when the REAL employee exodus begins. And those who are less will be making a whole lot less money. In fact, I'm surprised that hasn't already happened.
Well, you're obviously not seeing what's going on in "upstate" NY. There have been a LOT of cuts - to the tune of 1/3 of the staff over the last couple of years. Most of those who are left and were making decent money have taken a serious pay cut and lost both vacation time and benefits. In short, it HAS happened already.
SirRoxalot said:Of course not. Why would they want to break up such a successful team. Farid & Judy are paragons of broadcast management..
The fact is that if they disagreed with how they're running the company, one or both of them would be gone already. The problem is coming up with someone to replace them. Would YOU take that gig? Personally, you couldn't pay me enough.
They could run the Syracuse cluster with ten people and a few contract employees. You ain't seen nothing yet.
You're right. Citadel can cut more personnel. They can also cut more revenue. It's called "cutting your own throat". These guys are making Ed Levine look like a freakin' genius. It takes special talent to do that.
It's really hard to generate revenue without sales people, and really hard to get good sales people if they don't have product to sell. Product depends on talent.
You're right, the time for that discussion is way over. In market after market, the stations with the fewest cuts are outperforming the stations who shredded airstaffs and sales forces.
You're right, the time for that discussion is way over. In market after market, the stations with the fewest cuts are outperforming the stations who shredded airstaffs and sales forces.
SirRoxalot said:You're right, the time for that discussion is way over.
Because for them, the goal isn't to outperform. The goal now is just to stay afloat. So there will be more cuts.
TheBigA said:Because for them, the goal isn't to outperform. The goal now is just to stay afloat. So there will be more cuts.
Uh, haven't you been paying attention? There is no chance that they'll come up with the money to "stay afloat". They barely scraped together a couple of million a few weeks ago. They need to come up with $150-million in January. There's no "stay afloat". There's "bankruptcy and scandal". What we're talking about is what happens after bankruptcy kicks in. It behooves the folks left holding the bag to maximize income. Further cuts are going to HURT revenue even more than the cuts that have already taken place.
What needs to happen is corporate reorganization. Management is to blame for the troubles at Citadel, and management is what needs to change. The best thing that could happen would be to get competent people in place locally, and let them run their clusters with corporate there to help, not hinder their operations. That's assuredly NOT what's happening now.
SirRoxalot said:What needs to happen is corporate reorganization.
Corporate reorganization is not going to get them $150 million by January. That just costs them more money. These guys got them into this mess, so it's their job to get them out. Meanwhile they need to keep a certain amount of cash on hand in order to meet covenants. That means cut costs and no spending.
TheBigA said:Corporate reorganization is not going to get them $150 million by January. That just costs them more money. These guys got them into this mess, so it's their job to get them out. Meanwhile they need to keep a certain amount of cash on hand in order to meet covenants. That means cut costs and no spending.
I've already said that they're not going to get $150-million by January. These guys can't get them out of this mess. Corporate reorganization will follow the demise of Citadel as we know it, and will happen in one of two ways:
1. Citadel finds a sucker -er buyer who cuts a deal with the creditors to accept nickels on the dollar.
OR
2. Citadel goes into bankruptcy, and the creditors committee decides to either operate while waiting for station values to go up, or liquidate.
Either way, further cuts won't help them reach their covenants, and the next operators are going to want to maximize the value of the stations while strengthening revenues. Cutting further at the station level doesn't accomplish either goal. If anything, I expect Citadel to paint and polish facilities in hopes of enticing a buyer.
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