Citadel, Out.

[Element9]

Citadel Broadasting (CDL) yesterday was delisted from the NYSE and closed at 1 cent per share. Read the financial summary and note the institutional ownership that held shares, were burned and bailed out. Citadel will trade over the counter as CTBD. It would easy to be snarky, but consider the people who work at the Citadel stations. These are not good times for the radio business.

 

[Debaser]

But what does Fagreed care? He still gets his 11 MILLION tax free.
The poster boy for all that is wrong with American business today.

 

[SirRoxalot]

There's as simple answer. File Chapter 11. There's no value left for stockholders anyway, and the banks are already being bailed out by taxpayer dollars. Stop paying Fagreed millions to further damage the properties held by the company.

 

[TheBigA]

They have no short term debt payments to make now, so there's really no need to do anything except ride out the storm.

 

[Element9]

Yep, it's all roses for Citadel from here on out. Debt payment in June. The ship's on the rocks. More layoffs?

 

[TheBigA]

For a penny, Forstmann buys more stock, solves the debt, and the layoffs continue.

 

[SirRoxalot]

Except that former Disney shareholders have at least 51% of the stock. Teddy may end up being just a large creditor, or they may vote to take back the former ABC stations when Citadel can't come up with the final payment in June. I'd LOVE to see that sales contract.

 

[AndrewLawson]

For a penny, Forstmann buys more stock, solves the debt, and the layoffs continue.

Cash is king and if you have the money to buy what's broke, it may be a good investment as this article in the NY Post explains. The wolves are hungry and looking for fresh meat. However, the last two paragraphs of the story offer a more cautionary tone. Aside from Ted Forstmann's previously known investment in Citadel, it now will be difficult to guage the company's financial condition because it's traded over the counter. Questions: Who's left to layoff? Are managers immune?

 

[TheBigA]

Except that former Disney shareholders have at least 51% of the stock. Teddy may end up being just a large creditor, or they may vote to take back the former ABC stations when Citadel can't come up with the final payment in June. I'd LOVE to see that sales contract.

The promise of money at a future date is always better than taking back responsibility and the costs again. Disney is not in a position to run those stations any better than Citadel right now. It's in Disney's best interest to extend the deadline.

 

[TheBigA]

Questions: Who's left to layoff? Are managers immune?

As I said in another post, they could easily turn all music formats to their 24/7 networks and lay off everyone. And no, managers are NOT immune and they've already been dropping like flies.

 

[SirRoxalot]

As I said in another post, they could easily turn all music formats to their 24/7 networks and lay off everyone.

Full-time syndication would further reduce revenues, further reduce station values, and further reduce payments to existing creditors. What's the value to the creditors? They might as well liquidate and get something, or bring in a new management team that has a clue about how to operate.

And no, managers are NOT immune and they've already been dropping like flies.

Unfortunately, the people making the BIG money aren't "dropping like flies".

 

[TheBigA]

Full-time syndication would further reduce revenues, further reduce station values, and further reduce payments to existing creditors.

Show me statistics that would prove what you say. Lots of full time syndicated stations making lots more money than 24/7 live & local stations.

Unfortunately, the people making the BIG money aren't "dropping like flies".

In just the last few weeks several group GMs have left ( some former ABC people), all of whom were making high 6 figures, and they have not been replaced.

They might as well liquidate and get something, or bring in a new management team that has a clue about how to operate.

Let's make this clear: They are NOT going to liquidate. So stop wishing for it. Too many people have too much at stake to allow that to happen, and they all have full control of the company. This is NOT the time to invest in management teams. This is the time to stay afloat and ride out the bad times. When things start to turn around, THEN you build for the future. But we're not there yet, and we may not be there for a few years.

 

[Tibbs4]

Riding out "the storm" isn't an option now. This era of bad times is still in it's infancy and this company
has already screwed themselves.

Buying into Chitadel to assume debt cheap is easier said than done. They're looking for another
media company to partner/bail them out. Whose is in the financial shape to want to buy this and watch
revenues plummet even further? Ad revs for this company will drop another 30%. They can't go on any
further auto-pilot (local vs. canned) for most music formats w/out crashing ratings and revenues more.
The bills aren't stopping. They overpayed for their assets way long ago, and it's been sinking thing for
three years.

They need to cut the cheap lowest common denominator logic and run this company like a powerhouse
and create some listenership response pronto. But, no one in this industry gets it anymore. It's cut, cut,
cut. Follow the leader down the toilet amateur logic is what's killing this business.

The good times have gone, run off by greedy, pencil pushing, penny-squeezing non-radio geeks. The future
technologies are here NOW and offer more and more listeners better experiences, more cutting-edge options and
radio is unable to compete when it sounds so pathetically tired and boring. The future holds no certainty
of improvement in sound or profit. Look at sales of music. Millions of music fans no longer need to buy the
CD's from artists, do they? They can get it online. Think radio is immune? Not if it doesn't become an
entertainment-based entity that dares to be drastically different.

 

[TheBigA]

Buying into Chitadel to assume debt cheap is easier said than done. They're looking for another
media company to partner/bail them out.

Like who? The Chicago Tribune? The reason Disney sold them those radio stations was to get rid of them. They don't want them back. Fox never owned radio. Same with Time-Warner. They have problems of their own and don't need more from radio.

They need to cut the cheap lowest common denominator logic and run this company like a powerhouse
and create some listenership response pronto.

Sure. With what money? How can you invest in content when you have no money? There's the catch. It's easy to pontificate about how dumb everyone is, and a lot harder to do great things with no money.

This is not the old days. You can't just start a great radio station, and expect people to listen. It's not that simple. There is no mass media anymore. That's simply it. There isn't enough "mass" to make the media work. If you're selling mass, whether you sell radio, TV, newspapers, advertising, or even the internet, it's a very tough sell.

I'm going to be watching Craig Fox in Syracuse. He is a smart guy who got out with lots of money when he could. Now he's sticking his feet back into the water. Let's see if a smart guy can do a better job than the big guys.

 

[Tibbs4]

Granted BigA, there probably isn't any current media company able to buy CBS or Citadel or anyone else.
Why? The top 25 companies have gotten what we all saw coming back in the mid 1990's. They loaded themselves
and their stockholders down with promise that as long as times are good, we'll be okay and hope the shell game
works long enough to get out of debt. Now, no one has any money from second parties to operate. EXCEPT
the small DEBT-FREE companies that played it smart, safe and conservative when all the "players" in polyester
with flash, gold chains and miles of bs-lines slithered their way through the industry. Guess what, they are and
were all mostly fake fraud wanna-bes.

I am looking at a fairly small group now, because they have poorly rated stations in a handful of markets I like.
They've tanked themselves for fifteen years. Grab it for unreal price, sell of the sub-sub-par swill to recover
25% and ramp it up.

There's tons of great talent that has been thrown in the garbage by the corporate morons that are sadly willing
to work for reduced wages just to get a gig and make some cash. Treat them well, be honest, let them know they
will get to work for more than three weeks before being fired and presto, you create MAGIC inside the building and
on the streets. It's called PASSION and EFFORT, AND THINKING DIFFERENTLY. I don't know that "smart" has a damn
thing to do with business anymore, Big A. Seems like all the smart people have ruined this country. Give me some fire
in the belly, good common sense, the ability to see through most peoples crap and mostly just be a normal human
being and it's a slam dunk. Conventional? No. Mass marketing guru? No. Successful ... yes. (Most of the time.)

Tell me this, what has Chitadel done to save themselves? Where has the message of "yes we can" be sounded?
No where that I have seen. Instead, these corporate tools have sat in their elitist offices, shielded from reality,
and closed of communication with those that "do" except when it's time to shave another 10% of the workforce
while hiding another million dollar payoff for doing nothing.

They don't deserve what they get, the people fired from these companies don't deserve this and the listeners
and advertisers (who know radio doesn't work thanks to all this fiasco) don't deserve this. Yet it's business as
usual. That's wrong, and I know you agree with me on most of this. It's sad that no one will stand up and be
counted. Not being a blind sheep is a good start to getting listeners back.

 

[AndrewLawson]

As an average listener, I wonder why there's no Oldies or Classic Hits station in Buffalo. I've read this board long enough to understand the reason. Oldies or Classic Hits appeals to people who are over 50 and considered 'too old for advertisers.' It just seems there are a lot of people in Buffalo who are over 50 and would listen to a station, especially FM, that plays 60s and 70s songs, maybe even songs from the 80s. This is where the big radio companies may be missing a chunk of local advertising money. Why are three stations in Buffalo playing the same songs from artists like John Mayer, Leona Lewis, Seal and Kelly Clarkson? Seems the Beatles, Stones, Fleetwood Mac and Eagles might generate some good ratings. Or am I totally wrong.

 

[SirRoxalot]

Seems the Beatles, Stones, Fleetwood Mac and Eagles might generate some good ratings. Or am I totally wrong.

Been listening to 97-Rock lately, especially in mid-days? How about The Lake. I'm hearing a LOT more "familiar" music, and a lot fewer "deep cuts" on The Lake.

 

[Tibbs4]

Except that former Disney shareholders have at least 51% of the stock. Teddy may end up being just a large creditor, or they may vote to take back the former ABC stations when Citadel can't come up with the final payment in June. I'd LOVE to see that sales contract.

The promise of money at a future date is always better than taking back responsibility and the costs again. Disney is not in a position to run those stations any better than Citadel right now. It's in Disney's best interest to extend the deadline.

Big A --- what you say in this post is spot-on. Disney doesn't need to be poking around in radio right now. They need to focus on what
they do best. That being said, it makes no sense to me to buy this company on the cheap. There's to much baggage to clean up and that
alone will cost more than the company is currently worth. Look at the current billings and you'll see how the road ahead is unclear. Like
with Sirius/XM and now Clear Channel and most other companies in this industry --- it still matters that to many egos paid to much for
their stations in the 90's --- until someone can really buy specific stations for specific values and be done with the cost to excute a
clean up, no one can logoically pay fair prices for these tin cans. Stations that sold for $500,000 in the 80's are maybe worth 75% of
that now, not $5 M or $10 M. Look at how many stations were bought out for crazy prices that were virtually broke at the time. Many
stations have never made a penny in profit or worse, lost millions more. No one wanted to get rid of them when stock prices were high,
buyers were plentiful and companies could hide the bad assets to investors. My, how quickly times have changed.

I spoke with a radio CEO this morning trying to unload some markets and was aware of my intent and possible offer. He was willing to cut
my asking price if I would pick up some floundering dogs. I said "no way" on those trash pits and he was willing to lower my offer 50%
just to take the bad eggs off their books. What does that tell you? Run. Focus. Pay with cash. Don't think a good deal is a good deal.
I am still only 30% interested. Time will tell. I have lots of it to watch the bottom continue to fall out. Where are all those attitudes
with OPM now? Washed up. Short termers. Flashy fakes. How times are finally gettin' fun in radio, again.

Where's the post on the CC nightmare? It makes Chitadull look like a walk on the beach. Who could NOT have seen that one happening
the second it was proposed. Geez.

 

[heydaybegone]

Besides wondering how you're sure Disney stockholders have 51% of the shares (didn't keep mine), roll the Top of the Hour please....Anybody notice Entercom is now a "Dollar And A Dream" stock? Lot's of chatter about Citadel, but is ETM far behind? Interesting choice for the money - lottery or stock? Odds are pretty even right now. When the dime dividend goes away, all that's left is ???
Crystal balls anyone (no pun intended)? Will Another One Bite The Dust?

 

[Element9]

Citadel revenues fall 13%. Most of its decline came from its radio stations, although Citadel reports ABC Radio Networks also saw its revenues fall in the fourth quarter. Citadel says it's currently in negotiations with lenders over its outstanding $2 billion of debt.

Two billion dollars ($2,000,000,000) is stunning. I feel genuine compassion for the employees. The banks don't want this steaming shovel of horse dung. Disney probably doesn't want it either, so it may be a matter of swallowing hard and drinking the hemlock.