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Cumulus entering Tampa.....

CC isn't just going to have sell smaller market stations. They're going to have to sell a lot to recoup their losses. They never should have gobbled up as many stations as they did. Fortunately for CC, they won't be alone. Salem used a similar approach, and look how well it's working out for them! They came along and gobbled up a bunch of the 2nd tier AM stations in major markets, and like CC, keep getting extensions on their loans, meanwhile they too are having trouble keeping up with the interest payments... even after brokering out their entire weekend schedule. I remember one week, our GM was telling us, everyone was getting 10% pay cuts, and the stations might be getting sold soon... the next week the pay cuts were still in place, but they were able to secure new loans, ensuring the stations would stay on the air for a few more years... it's been a few years now... and I'm really going to savor this. I hope the people at the top have been skimming as much off as they can in the meantime, it's going to get ugly soon. You can't keep borrowing and getting extensions forever...
 
Oh, and here's another thought... lets do the math on the percentage of stations in the Tampa market with massive debt. We've already established that CC and Salem have crushing debt. By all accounts, Genesis has had to scale back recently, moving to the transmitter site. I've heard rumors WMNF is having trouble keeping up with all the money they've blown recently (huge new building/5 studios/cappuccino machines/Rob Lorei's bagel collection/etc). A quick google search shows Cox Communications has been struggling. CBS has been downsizing for awhile now, and Cumulus isn't looking much better than CC, financially speaking. So essentially, 99% of the stations in Tampa are in the red, regardless of how much money they're raking in. Of course, there are still lots of stations that are extremely profitable right now... but after paying the bills and the workers, eventually there isn't going to be enough to pay the interest on this crushing debt. And it's not like radio sales are about to magically go through the roof or something.

My point is, we're seeing why corporate radio doesn't work. I don't know what will happen next, but I really hope we'll see more opportunities for local ownership and more diverse ownership.
 
Cedric said:
CC isn't just going to have sell smaller market stations. ... and I'm really going to savor this.
Click to expand...

They owe so much money that there aren't enough assets to sell. It won't help, they need to just preserve the revenue streams.

And thanks for being honest about your point of view (lol)....
 
The reason Clear Channel is having the debt problem is faces now is because CC overpaid for all of its stations in an effort to 1) ensure the previous owners would sell; 2) ensure the previous owners would sell to Clear Channel; and 3) ensure that Clear Channel would become the biggest radio operator with the most stations before any other entity could beat CC to the punch. An example is CC paid $3.5 million for a small market class C1 that had a maximized FMV of $1.5 million. No matter what CC does with this station, its maximum FMV is $1.5 million. This is one example of the company's acquisition strategy involving over 1,000 individual radio stations at CCs radio station portfolio peek. A company does make its money when it sells its properties. The profit is made when the property is acquired provided the acquisition is made correctly, namely the property is acquired at a fair and reasonable price and not overpaid. It is only when the property is sold that the profit is realize but the profit is actually made when the property is acquired. There is little or no room for profits with the CC stations now, regardless of the billing because the debt service out numbers any positive cash flow and station / group cluster FMV.
 
jmtillery said:
The reason Clear Channel is having the debt problem is faces now is because CC overpaid for all of its stations in an effort to 1) ensure the previous owners would sell; 2) ensure the previous owners would sell to Clear Channel; and 3) ensure that Clear Channel would become the biggest radio operator with the most stations before any other entity could beat CC to the punch. An example is CC paid $3.5 million for a small market class C1 that had a maximized FMV of $1.5 million. No matter what CC does with this station, its maximum FMV is $1.5 million. This is one example of the company's acquisition strategy involving over 1,000 individual radio stations at CCs radio station portfolio peek. A company does make its money when it sells its properties. The profit is made when the property is acquired provided the acquisition is made correctly, namely the property is acquired at a fair and reasonable price and not overpaid. It is only when the property is sold that the profit is realize but the profit is actually made when the property is acquired. There is little or no room for profits with the CC stations now, regardless of the billing because the debt service out numbers any positive cash flow and station / group cluster FMV.
Click to expand...

I found one small error in the above post as I left out one small but highly important word which is inserted in bold letters in the repost below:


The reason Clear Channel is having the debt problem is faces now is because CC overpaid for all of its stations in an effort to 1) ensure the previous owners would sell; 2) ensure the previous owners would sell to Clear Channel; and 3) ensure that Clear Channel would become the biggest radio operator with the most stations before any other entity could beat CC to the punch. An example is CC paid $3.5 million for a small market class C1 that had a maximized FMV of $1.5 million. No matter what CC does with this station, its maximum FMV is $1.5 million. This is one example of the company's acquisition strategy involving over 1,000 individual radio stations at CCs radio station portfolio peek. A company does NOT make its money when it sells its properties. The profit is made when the property is acquired provided the acquisition is made correctly, namely the property is acquired at a fair and reasonable price and not overpaid. It is only when the property is sold that the profit is realize but the profit is actually made when the property is acquired. There is little or no room for profits with the CC stations now, regardless of the billing because the debt service out numbers any positive cash flow and station / group cluster FMV.
 
......as rumors go.....its been mentioned to me today that there has been an offer for the CBS group. But I have no proof. I could see it happening since the company is really only concentrating on the top 10 markets as far as any future growth. The number mentioned was $50+M.....
 
radioman921 said:
......as rumors go.....its been mentioned to me today that there has been an offer for the CBS group. But I have no proof. I could see it happening since the company is really only concentrating on the top 10 markets as far as any future growth. The number mentioned was $50+M.....
Click to expand...

Ah, NOW We're getting somewhere. If you are talking about CBS Radio buying some CC stations... it could lead to Cumulus entering Tampa. Let me explain.

In NY, LA, Chicago, Tampa (at least), CBS is at the limit of stations they can own. If they buy some stations from CC, they will have to sell some stations. Cumulus has no stations in Tampa. So, CBS could sell, say, 98.7 the Fan or Wild 94.1 to Cumulus. Therefore, this board title is true.

Of course, since this is only a rumor, I may just be taking it too seriously. Also, knowing CC, those stations will be in their hands until financial circumstances or (much less likely) amendments to Telecom 96 force them to give some stations up.
 
I think radioman was suggesting that CBS might leave this market all together and sell their holdings to another company, i.e. Cumulus.
 
CBS is not getting there hands on any of the Tampa Bay Clear Channel stations just to turn around and sell their properties to Cumulus. That's a bunch of unnecessary musical chairs. IF ANYTHING, it's like Cedric said, CBS would exit the market entirely and Cumulus would enter. A 4th major company (Sorry Genesis) is not entering Tampa Bay.
 
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