While the majority of us on here (me included, actually) drone on about the fortunes of smaller stations and discuss minutia of day-to-day programming, a potentially massive change is bubbling.
Word broke yesterday that Goldman Sachs has been hired by Clear Channel to position the broadcasting behemoth for a sell-off. The implications are fascinating.
None of this comes as a surprise. The recent middle-management cuts by CCU raised red flags with many that this may be coming. Further, those working within the company with budgets thought that other cuts also signified something on the horizon. CCU’s recent move to increase market caps makes sense considering this – their signals may be worth more if they can sell them to established clusters in some markets. But, what happens next?
Would CCU sell off the entire company as one piece? ‘Not sure about that. There are a limited number of entities out there that can raise enough cash to buy all of this, and borrowing is getting expensive. And, even if there were potential suitors, would they be interested in paying the expected premium to buy into a declining industry? Perhaps, not.
Is it more likely that CCU would be sold off piece-by-piece. Perhaps. And, arguably, that’s the sort of question Goldman Sachs has been hired to answer. It may be that the company is worth more on a station-by-station level than as a big chunk. And, let’s face it… one would wonder if the sort of company that would want to buy New York, LA, Chicago, etc., would also want to be in Tupelo, Meridian, Jonesboro, or Macon, GA. But, there are some operators who might want to be, and would be unafraid to pay a nice price for the honor of running a tight small-market cluster.
There are some regulatory issues running in the background here, but, we’ll save that discussion for another day.
But, this is all speculation.
On the local level, this is equally intriguing. Clear Channel has a nice cluster here. Heck, even their two AMs do extremely well. It’s worth a chunk of cash. What names might be entering our market in the coming year, hmmmm?
DE
Word broke yesterday that Goldman Sachs has been hired by Clear Channel to position the broadcasting behemoth for a sell-off. The implications are fascinating.
None of this comes as a surprise. The recent middle-management cuts by CCU raised red flags with many that this may be coming. Further, those working within the company with budgets thought that other cuts also signified something on the horizon. CCU’s recent move to increase market caps makes sense considering this – their signals may be worth more if they can sell them to established clusters in some markets. But, what happens next?
Would CCU sell off the entire company as one piece? ‘Not sure about that. There are a limited number of entities out there that can raise enough cash to buy all of this, and borrowing is getting expensive. And, even if there were potential suitors, would they be interested in paying the expected premium to buy into a declining industry? Perhaps, not.
Is it more likely that CCU would be sold off piece-by-piece. Perhaps. And, arguably, that’s the sort of question Goldman Sachs has been hired to answer. It may be that the company is worth more on a station-by-station level than as a big chunk. And, let’s face it… one would wonder if the sort of company that would want to buy New York, LA, Chicago, etc., would also want to be in Tupelo, Meridian, Jonesboro, or Macon, GA. But, there are some operators who might want to be, and would be unafraid to pay a nice price for the honor of running a tight small-market cluster.
There are some regulatory issues running in the background here, but, we’ll save that discussion for another day.
But, this is all speculation.
On the local level, this is equally intriguing. Clear Channel has a nice cluster here. Heck, even their two AMs do extremely well. It’s worth a chunk of cash. What names might be entering our market in the coming year, hmmmm?
DE