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Creditors of Inner City force restructuring by Petitioning Court for BK

D

DudeFan

The other shoe drops.

Inner City is now in involuntary bankruptcy to restructure their obligations.

http://www.bloomberg.com/news/2011-08-20/radio-station-owner-inner-city-media-targeted-for-bankruptcy-1-.html

What this means is that the holders of the debt have not only forced a management chain at the broadcasters, they are now protecting their interest by using bankruptcy to change the debt obligations of the company.

Once they file a Chapter 11 plan, we will now the timeline and general strategy of any divestments. The company cannot divest any assets without court permission until it emerges from Chapter 11.
 
I have read some comments mentioning that Inner City could sell some stations if/when they emerge from bankruptcy protection - wonder if WARQ and WMFX could potentially be on the block at some point? They aren't even Urban stations. Or perhaps the whole cluster?
 
I don't think anyone will really know until after the company emerges from bankruptcy.

Clearly, the creditors are going to assert further control and force Sutton out. Now whether they wish to continue as operators or "unlock the value" in the assets is not clear. If they do choose to remain as operators, one would suspect that they would focus on their major market properties and later divest Jackson and Columbia.
 
Would be interesting to see who would step up and acquire the Inner City stations in Columbia, and if they'd be sold as a cluster or perhaps individually. DM is worth something.

The next year will be interesting to watch in #88, given the recent developments with Inner as well as Double O. I can't help but wonder if O will bail on the market eventually.
 
These days, deals are done in clusters.

I doubt Inner City Columbia will be split up in any initial sale transaction. Afterwards, who knows.
 
I often wonder how long the price value of radio stations will hold up, with the economy change starting over 4 years ago, the shift in media distrubtion to a broader market, and the wrong negitave general public opion being pushed about the value of radio weather it true or not, it makes me wonder. I mean AM radio is still selling for what it use to be worth over 4 years ago not what the value is today and FM radio appears to have never taken a big dip of any kind in our area at least but this is not reflective of the current market in this country today. Just how long is it before the two ends meet or collide which ever the case may be or is Innter City one sign of this happening.
 
Station prices have dropped all over the nation. There's no one that has sold a full-market signal recently, so we don't know how much of a haircut a seller in this market would have to accept in order to move the property. Double O would likely be the first deal, if any. But they have three disadvantages: they paid an awful lot of money to acquire the CP's and then built out the stations, they only have two stations and investors want more than a duopoly, and they cannot be positively cash-flowing, particularly with the last "end of summer" pitch sheet I saw go out. An average $3 spot rate will not keep the lights on.
 
The Double O signals are worth something, but that's about it. Both stations are tanking like they pretty much always have....I wonder if they've ever run in the green? I would say a likely buyer would already want to have a presence in the market, but it would more than max them all out.
Cumulus and Clear Channel have 4 FM's each, so they couldn't buy both stations unless they sold one they currently have, and that would be pointless. Inner City wouldn't be interested.
 
There was a time WWDM would have gone for fifteen million alone. But given Inner City's troubles, I bet someone could get the whole Columbia cluster for that or less.
 
Actually, Bugz, Inner City is throwing off a lot of cash here in town. Inner City's major problem was debt at the corporate level and lackluster management and results in NYC and SF.
 
I agree they have done well locally. But with poor corporate management and this economy, I figure once the courts let them, Inner City has a fire sale of everything except New York and maybe San Francisco.
 
I'm not really sure. The creditors haven't made any sort of indication which way they are going to go with Inner City. I do believe they will ultimately take control of the company and force Pepe out. After that, who really knows? They will be acquiring the company at a bargain price to begin with, so they may just bring in better operators for SF/NYC and wait until the asset prices rebound.
 
I went to the beach last week and never did hear country legends on 94.3 (94.3 The Dam--Dam that's good rock--was even clear in NC) or the new sound of Carolina 92.1 (Star also was clear all the way).
 
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