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Latest on Clear Channel Buyout

You don't have to be an MBA to know that the entire communications business is a house of cards, ready to blow over if the wind picks up. Apparently, the banks know the Clear Channel deal with Bain & Lee is rotten too.

Inside Radio said:
Bain, THL Partners sue lenders.
The private equity firms have filed a lawsuit in Texas State Court against the lenders backing their $19.5 billion buyout of Clear Channel, demanding they finance the deal as agreed to last Summer. In a joint statement, the firms say "We regret the banks have left us no choice but to notify them that they are in breach of their obligations under their financing commitments. We continue to believe our investment in Clear Channel will be rewarding for our investors over the long term" adding "We want to do this deal." Clear Channel has joined Bain and THL Partners as a plaintiff in the complaint.
Click to expand...
Now the attorneys will sort it out in court, if it gets that far. There's a man named Charles Morris who believes the mother of all economic meltdowns is due this summer. If this happens, we're all in for a swim in the dunktank o' s*it, commercial and public radio alike. Of course, the guys in the corner office on the seventh floor will be wearing wet-suits and life jackets.

-9-
 
DO NOT CLICK ON THAT CHARLES MORRIS LINK.

It will freeze your system up. I don't know what kind of junk that site is trying to download onto your PC, but if you have a spam blocker that's worth anything, it will interfere GREATLY with your ability to access that link, probably for good reason.
 
Steven21 said:
DO NOT CLICK ON THAT CHARLES MORRIS LINK.

It will freeze your system up. I don't know what kind of junk that site is trying to download onto your PC, but if you have a spam blocker that's worth anything, it will interfere GREATLY with your ability to access that link, probably for good reason.
Click to expand...

Link worked fine for me, but I really only skimmed the article.

As for CC, what comes around goes around I suppose. This is directed at the Mays, not to any CC employees.
 
I appreciate the heads up on links that might be open doors to disaster, but the link worked OK for me. Nonetheless, after seeing your advisory, I re-ran my anti-virus and XoftSpy. Can never be too careful in the ether jungle.
 
Thoughts on the Clear Channel Buyout

First of all, there's a lot of money at stake in this deal. No, I'm not talking about the $19.5-Billion buyout, I'm talking about the lawyers who are tripping over each other to represent somebody in this collosal cluster-fu -uh realignment.

In truth, I'm not sure how disappointed Clear Channel will be if the deal craters. They'd get at least a chunk of the $500-$600-Million in penalties if the banks back out of the deal. They've already divested themselves of their TV stations, and a bunch of small-market losers. They could end up with a leaner company, focused in bigger markets, and a pocketful of cash left over after the lawyers get done submitting their billable hours. In the meantime, they've blamed Bain & Lee on the hatcheting of hundreds of employees, so they can now put on the white hat and hire some of them back - at reduced salaries, of course.

Meanwhile, some lawyer somewhere is reading this, and putting it down as "billable hours" because they're "keeping up with industry reaction to the situation".

Cha-ching!
 
Good points, Rox. Yet it seems to be that the banks can't be totally faulted for looking at the potential mess they'd inherit by underwriting this deal. Seems they got very cold feet once they found out the water heater wasn't working and the pool was ten feet deep, rather than three feet deep.

The banks have a fiduciary responsibility to their patrons and given the nature of the economy (the "R" word keeps coming up from the likes of Warren Buffet and Michael Bloomburg, no lightweights they when it comes to matters of finance.)

As to the lawyers, there are mortgages to be paid, bills for othodontist and maybe even tuition at Cornell. A barrister has to make a livin'.
 
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