If the proceeds go to CBS, then CBS is the lender. They're the ones who stand to lose in a bankruptcy. Along with any CBS stockholders who took Entercom stock in the Reverse Morris Trust. Unless all of this financing changed at some point in the past 6 years. What we're trying to find out is who is pulling the strings?
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Here comes Audacy Atlas...
- Thread starter ckg279
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If the proceeds go to CBS, then CBS is the lender. They're the ones who stand to lose in a bankruptcy. Along with any CBS stockholders who took Entercom stock in the Reverse Morris Trust. Unless all of this financing changed at some point in the past 6 years. What we're trying to find out is who is pulling the strings?
Well today was the earnings call, but all seems quiet on the western front so far.
I don't know where today's date came from but the 4th quarter call is coming up in March.
Audacy, Inc. to Report 2022 Fourth Quarter Financial Results, Host Conference Call on March 15
Audacy, Inc. (NYSE: AUD) will report its 2022 fourth quarter financial results before the market opens on Wednesday, March 15, 2023. The Company will
www.businesswire.com
That's not how the sources and uses of the debt issuance worked in this instance. CBS Corporation received cash from the parties who bought the debt. More specifically, CBS Radio as issuer conveyed the cash it received from the private debt placement to CBS Corporation. The debt was purchased by institutional investors. The debt was initially an obligation of CBS Radio (not to be confused with CBS Corporation) and that obligation was then assumed by Entercom (Audacy) upon completion of the merger with CBS Radio. Repayment is owed by Audacy to those institutional investors, not CBS Corporation.
Of course, what was "CBS Corporation" is now simply part of Paramount Global.
CBS Corporation Announces Pricing Of Debt Financing By CBS Radio Inc.
/PRNewswire/ -- CBS Corporation (NYSE: CBS.A and CBS) today announced that its radio business, CBS Radio Inc. ("CBS Radio"), has priced an offering of $400...
www.prnewswire.com
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Thanks for the clarification and the link which clearly differentiates CBS Corporation from CBS Radio.That's not how the sources and uses of the debt issuance worked in this instance. CBS Corporation received cash from the parties who bought the debt. More specifically, CBS Radio as issuer conveyed the cash it received from the private debt placement to CBS Corporation. The debt was purchased by institutional investors. The debt was initially an obligation of CBS Radio (not to be confused with CBS Corporation) and that obligation was then assumed by Entercom (Audacy) upon completion of the merger with CBS Radio. Repayment is owed by Audacy to those institutional investors, not CBS Corporation.
CBS Corporation Announces Pricing Of Debt Financing By CBS Radio Inc.
/PRNewswire/ -- CBS Corporation (NYSE: CBS.A and CBS) today announced that its radio business, CBS Radio Inc. ("CBS Radio"), has priced an offering of $400...
Apparently, if I understand this correctly, this was a way for CBS Corporation to make the Reverse Morris deal work by pre-arranging the financing via debt assumption: take my stations but assume their debt.
Exactly. This structure allowed CBS Corporation to monetize the radio division. They definitely weren't going to spin off those assets without receiving significant cash in return. The whole purpose of the deal was to de-risk their balance sheet relative to radio. Taking back a bunch of notes receivable (unsecured, to boot) definitely wouldn't have accomplished that objective.
Anyone can look at Paramount Global's 10K and 10Q reports if they wish. I'd be very surprised if they hold hundreds of millions of dollars of notes receivable from Audacy.
Anyone can look at Paramount Global's 10K and 10Q reports if they wish. I'd be very surprised if they hold hundreds of millions of dollars of notes receivable from Audacy.
Again, thanks for the explanation. I've read descriptions on the Reverse Morris procedure and never quite "got" how CBS employed it to their advantage. So, really, what happened is that CBS used its name to get financing that the pseudo-buyer might not have gotten or gotten so advantageously and then passed that debt on to the Entercom. I think I get the procedure and the logic for this specific transaction now.
Please jump in whenever you see a finance and corporate issue that needs explaining. I know I benefited from this discussion!
Many thanks for the kind words, David. I genuinely appreciate it.
In terms of stock ownership in Audacy, it appears former CBS insiders and the present day Paramount Global hold little if any stock in the company today.
m.marketscreener.com
(I edited my initial remarks here since I ultimately answered my own question.)
In terms of stock ownership in Audacy, it appears former CBS insiders and the present day Paramount Global hold little if any stock in the company today.
AUDACYPAR: Shareholders Board Members Managers and Company Profile | US05070N2027 | MarketScreener
AUDACYPAR: Company profile, business summary, shareholders, managers, financial ratings, industry, sector and market information | OTC Markets: AUDAQ | OTC Markets
(I edited my initial remarks here since I ultimately answered my own question.)
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I looked in my Morningstar subscription account, and could not determine that, either. I am guessing that they divested promptly. Or did not exercise the option to take the radio stock when offered.
Boiled down, it means CBS played David Field. They got out of the Radio game and passed the debt to Entercom. Too bad the US doesn't have Debtors Prisons like in the Charles Dickens stories...
The BlackRock Group just increased their ownership of Audacy stock to 6% this month, according to an SEC filing. That makes them the second largest shareholder, after Joseph M. Field.
Nobody was played. CBS looked for a cash deal, and they got the cash from their loan. They then spun off the radio division by having the "buyer" assume the loan.
I don't know I'd go so far as to say CBS "played" David Field. It is unclear if Entercom was already a stalking horse bidder for CBS Radio when the latter's debt issuance occurred. Only insiders at CBS, Entercom, and their respective professional advisors would know that info.
I will say CBS made a wise decision to exit radio ownership when it did.
I will also say I thought the pro forma opening leverage of 4.0x of the combined company post-merger was too aggressive given (a) broadcast radio's long-term status as a shrinking industry, and (b) broadcast radio's vulnerability to macroeconomic cycles. Heck, I think I mentioned that as early as late 2018 or early 2019 on one of these forums.
I will say CBS made a wise decision to exit radio ownership when it did.
I will also say I thought the pro forma opening leverage of 4.0x of the combined company post-merger was too aggressive given (a) broadcast radio's long-term status as a shrinking industry, and (b) broadcast radio's vulnerability to macroeconomic cycles. Heck, I think I mentioned that as early as late 2018 or early 2019 on one of these forums.
Remember, CBS left Buffalo long ago when they sold to Townsquare. At that time, they only wanted to be in big markets. Ultimately, they decided they wanted out of Radio altogether.
Even you have to concede that Entercom (Audacy) is not better off than they were before the CBS deal...
My understanding "from the floor of NAB" chatter was that Field wanted to be up nearer iHeart and Cumulus in station and market count and was looking for any kind of big group deal.
Never buy a station that has nowhere to go but down.
And they certainly paid for that high leverage in the pandemic period, just as a similar thing happened in the 2008-2009 recession.
But that is because they wanted, badly, to expand.
do u think there will be legal battles with National Amusments and Sharri Redstone
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