Let me see if I have this straight...
Citadel "buys" ABC Radio for $2.7-Billion. I say "buys", because former ABC shareholders end up with more stock in the company than former Citadel shareholders.
In the first full quarter of ownership, Citadel writes off nearly $500-Million in "asset impairment and disposal charges". An "asset impairment and disposal charge" is accounting-ese for "something is worth less than we paid for it". Most of those "assets" were former ABC properties, and stock value, which tanked after the deal.
So, did Citadel overpay ABC by nearly $500-Million dollars on a $2.7-Billion dollar deal - or about 18% more than what ABC was worth? Should we expect Citadel to follow the Clear Channel model, and sell off smaller and less profitable markets? Or, will "savings" come from "synergies" like syndicating big market ABC talent on smaller Citadel stations, replacing live and local content?
It looks to me like Farid & Co. wanted to jump up to play with the big boys, and seriously overpaid to feed their massive egos. I'm afraid that a lot of Citadel employees will pay the fare for their ego trip - and it won't be the people at the top who engineered the deal in the first place.
Citadel "buys" ABC Radio for $2.7-Billion. I say "buys", because former ABC shareholders end up with more stock in the company than former Citadel shareholders.
In the first full quarter of ownership, Citadel writes off nearly $500-Million in "asset impairment and disposal charges". An "asset impairment and disposal charge" is accounting-ese for "something is worth less than we paid for it". Most of those "assets" were former ABC properties, and stock value, which tanked after the deal.
So, did Citadel overpay ABC by nearly $500-Million dollars on a $2.7-Billion dollar deal - or about 18% more than what ABC was worth? Should we expect Citadel to follow the Clear Channel model, and sell off smaller and less profitable markets? Or, will "savings" come from "synergies" like syndicating big market ABC talent on smaller Citadel stations, replacing live and local content?
It looks to me like Farid & Co. wanted to jump up to play with the big boys, and seriously overpaid to feed their massive egos. I'm afraid that a lot of Citadel employees will pay the fare for their ego trip - and it won't be the people at the top who engineered the deal in the first place.