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Clear Channel troubles

Keep reading until the last two paragraphs. This deal could wind up looking like the famous case in investment history - the steamship Great Eastern which ate up the majority of Britain's private capital in the period 1860 to 1880. The equity owners kept refinancing and refinancing the money-losing ship. Each time it went bankrupt the shareholders and employees got screwed and the initial investors bought it back for pennies on the dollar, only to do it all over again and again.

Interestingly, the only time the Great Eastern made money was when she was broken up. Sale of the scrap iron and a memorabilia auction of the ship's fittings produced the only profit it made in its existence.

History repeats itself. Let's watch and see how accurate the comparisons are.....
 
The Post article was refuted in the Wall Street Journal by representatives of Bain Capitol/CC only a day or two after it first appeared. No surprise there. The CC hiring freeze has come and gone. Wasn't Wease "hired" by CC Rochester during that same period? It's clear the policy wasn't cast in stone.

Your historical perspective RCS, is appreciated, especially as you have related it to the communications business. If only there is but one Great Eastern radio incident looming in the months and years to come, we'd be lucky. Unfortunately, given the conditions of many broadcasting companies and the economy, there may be more.

A few knowledgeable experts say the broadcasting house of cards may begin falling (again) as early as the first quarter of '10. Banks are now concerned about another mortgage crisis related to commercial real estate, such as strip malls, shopping centers, sun belt high-rise condos and developers of such.

One financial insider told me that if one radio company declares bankruptcy, a domino effect will be created, which will very likely depress values of all radio properties, repeating the secenario of residential real estate where homes that sold for $500k five years ago are today selling for half that price or worse, foreclosed. It's flat out ugly, if not criminal in some cases.

A commercial real estate banking crisis combined with a failed communications company would likely mean only the very well-capitalized would be able to take advantage of the situation. Communications companies that cannot find buyers for their properties may resort to laying off more employees. People smarter than I and more studied in the nuances of corporate finance have said it's not a matter of "if" some big companies fail, but "when." To borrow a well known phrase, "And the hits just keep on comin'." Or, as George Santayana said, "those who cannot remember the past are condemned to repeat it." Great Eastern, indeed.
 
JimPastrick said:
The Post article was refuted in the Wall Street Journal by representatives of Bain Capitol/CC only a day or two after it first appeared. No surprise there. The CC hiring freeze has come and gone. Wasn't Wease "hired" by CC Rochester during that same period? It's clear the policy wasn't cast in stone.

Your historical perspective RCS, is appreciated, especially as you have related it to the communications business. If only there is but one Great Eastern radio incident looming in the months and years to come, we'd be lucky. Unfortunately, given the conditions of many broadcasting companies and the economy, there may be more.

A few knowledgeable experts say the broadcasting house of cards may begin falling (again) as early as the first quarter of '10. Banks are now concerned about another mortgage crisis related to commercial real estate, such as strip malls, shopping centers, sun belt high-rise condos and developers of such.

One financial insider told me that if one radio company declares bankruptcy, a domino effect will be created, which will very likely depress values of all radio properties, repeating the secenario of residential real estate where homes that sold for $500k five years ago are today selling for half that price or worse, foreclosed. It's flat out ugly, if not criminal in some cases.

A commercial real estate banking crisis combined with a failed communications company would likely mean only the very well-capitalized would be able to take advantage of the situation. Communications companies that cannot find buyers for their properties may resort to laying off more employees. People smarter than I and more studied in the nuances of corporate finance have said it's not a matter of "if" some big companies fail, but "when." To borrow a well known phrase, "And the hits just keep on comin'." Or, as George Santayana said, "those who cannot remember the past are condemned to repeat it." Great Eastern, indeed.
Click to expand...

Very insightful and interesting ....
 
i went to a broadcast discussion a few weeks ago and the vp of cc here in syracuse was talkingthe plans they have for internet radio and ipods his show and tell was a wireless internet radio that can get 12,000 internet radio stations seems to me cc is more interested in the internet than terrestial radio
 
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