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Herald: Cape Cod Broadcasting files for bankruptcy
- Thread starter raccoonradio
- Start date
http://boston.bizjournals.com/boston/stories/2009/09/21/daily55.html
They say they owe "a Wellesley Hills-based company $3.5 M" (and) Baltimore's M&T Bank (which owns the naming rights to Ravens stadium) $6.5 M.
And...who is that company based in Wellesley Hills?
Charles River Broadcasting...who is owed $3.5 M. They sold WFCC and WKPE to Sandab/Cape Cod Broadcasting in 07.
They say they owe "a Wellesley Hills-based company $3.5 M" (and) Baltimore's M&T Bank (which owns the naming rights to Ravens stadium) $6.5 M.
And...who is that company based in Wellesley Hills?
Charles River Broadcasting...who is owed $3.5 M. They sold WFCC and WKPE to Sandab/Cape Cod Broadcasting in 07.
More from the Herald. They say they have no plans to sell stations and will keep operating
http://bostonherald.com/jobfind/new..._files_for_bankruptcy/srvc=home&position=also
>>The bulk of the company’s debt stems from its purchase of WKPE, WFCC and the World Classical Network in January - an “interesting time for a purchase because the economy started going down,” Bone said.
Michael Harrison of TALKERS is quoted as saying that debt service is a big obstacle plus you have the
shrinking ad market.
http://bostonherald.com/jobfind/new..._files_for_bankruptcy/srvc=home&position=also
>>The bulk of the company’s debt stems from its purchase of WKPE, WFCC and the World Classical Network in January - an “interesting time for a purchase because the economy started going down,” Bone said.
Michael Harrison of TALKERS is quoted as saying that debt service is a big obstacle plus you have the
shrinking ad market.
They will keep operating -- as long as the bankruptcy judge allows a $500,000 loan (at 10% interest annually,) or, the company will not be able to keep running.
And as to $50,000 in assets? That's more true than it might look. Radio stations, by common rule, are "lease" businesses. Equipment has no value to banks. They aren't in the equipment business -- so, stations lease as much as they can, including the land the "leased" tower sits on and the transmitter in the transmitter building.
So much more, like furniture, office space, studio space are either "rent" or "trade" -- which in the case of trade, still counts as taxable income and is not an "owned" asset if there is still "credit/balance" owed.
Further, accounts receivable (such as in this contract for the debt service,) reverts to the biggest lender (the Baltimore bank) as they become the first position creditor. The owner of the group lives in Maryland.
That leaves the "value" of the staff moot, if a loan is not allowed, as they will be out of work.
So,what's left? $50,000 worth of assets -- possibly some equipment and furniture that was bought, not leased, and little else. Syndication contracts are not an asset, nor is equipment associated with such contracts.
The debt service going out didn't meet the revenue (advertising) coming in and despite what we "wish" -- owners, especially investors, are not in the business of digging deep into their personal pockets to keep DJ's and staff employed. The stations must "pay for themselves" before the ownership and investors start getting testy.
The question will be if the judge allows the "loan" or converts the Chapter 11 filing to a liquidated Chapter 7 as it did in Montana today for a 5,000watt AM on 600. The bankruptcy court shut it down.
In the case, the next question will be, "How long can $500,000 last?" This doesn't sound enough for a years worth of operating expense, especially in this economy. But, then, the bank (or CRB) doesn't want to take a total bath on the deal and lose millions. They may up the ante on "credit" but force a sale. The price, however, will have to cover the outstanding debt and what's left. It will take some pockets to bail out -- but it could happen -- if the market can survive in this economy until it turns over. Until then, it will be business as usual -- with fingers crossed.
Now, what would you do if you were the bankruptcy judge? The bank would like to see it happen, you can bet. But judges are different than banks.
And as to $50,000 in assets? That's more true than it might look. Radio stations, by common rule, are "lease" businesses. Equipment has no value to banks. They aren't in the equipment business -- so, stations lease as much as they can, including the land the "leased" tower sits on and the transmitter in the transmitter building.
So much more, like furniture, office space, studio space are either "rent" or "trade" -- which in the case of trade, still counts as taxable income and is not an "owned" asset if there is still "credit/balance" owed.
Further, accounts receivable (such as in this contract for the debt service,) reverts to the biggest lender (the Baltimore bank) as they become the first position creditor. The owner of the group lives in Maryland.
That leaves the "value" of the staff moot, if a loan is not allowed, as they will be out of work.
So,what's left? $50,000 worth of assets -- possibly some equipment and furniture that was bought, not leased, and little else. Syndication contracts are not an asset, nor is equipment associated with such contracts.
The debt service going out didn't meet the revenue (advertising) coming in and despite what we "wish" -- owners, especially investors, are not in the business of digging deep into their personal pockets to keep DJ's and staff employed. The stations must "pay for themselves" before the ownership and investors start getting testy.
The question will be if the judge allows the "loan" or converts the Chapter 11 filing to a liquidated Chapter 7 as it did in Montana today for a 5,000watt AM on 600. The bankruptcy court shut it down.
In the case, the next question will be, "How long can $500,000 last?" This doesn't sound enough for a years worth of operating expense, especially in this economy. But, then, the bank (or CRB) doesn't want to take a total bath on the deal and lose millions. They may up the ante on "credit" but force a sale. The price, however, will have to cover the outstanding debt and what's left. It will take some pockets to bail out -- but it could happen -- if the market can survive in this economy until it turns over. Until then, it will be business as usual -- with fingers crossed.
Now, what would you do if you were the bankruptcy judge? The bank would like to see it happen, you can bet. But judges are different than banks.
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