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Logic of National Clear Channel Deal ?!?

T

Tibbs4

Banned
I know this is not as important as Dan and Demetria, and I should post this on a national board...

What is the logic of spending $20+ BILLION to buy 900 radio stations that are all as gutted on expenses
in a floundering economy in an industry that see decreasing customer bases year after year? Since
Dave Ramsey's our local superstar (granted, along with CR and Buddy) I would love to have his take
on this buyout. I admit I am not the sharpest tool in the shed for business deals, although I have had
more wins than loses over the years. I cannot fathom the logic of this deal other than somebody deciding
they had to have the biggest toy. We all know Dave doesn't do debt, so he wouldn't do this deal anyway.
But, even if it was all cash at closing --- this wouldn't be a house I'd buy. Any thoughts? Additionally,
if this deal eventually tanks in years ahead, look at how much worse the radio industry will be. As if
Citadel, Radio One or 99% of the companies can faulter any more.

Is there a bright side I am missing? Thanks in advance for what will be hopefully be an interesting discussion.
I just don't get this one!
 
If I'm not mistaken (and I usually am) after this deal they will be a privately held corporation rather than a public one. As anyone in corporate radio will tell you, somewhere in th late 90's or early 00's the paradigm shifted. Public corporations are no longer about making money,,, they're about NOT SPENDING MONEY. Money spent reduces shareholder dividends and they apparently hate that. The stock can go up if youn reduce soending and make no money.

A private corp can go back to making money.
 
As a stockholder, I can tell you from my own bank account that the dividends don't make up for the loss of share price. The real story is when growth came to a halt about 3 years ago, there was no point in keeping them as independent public companies. What CC did was right, and best for the company. All of the other radio companies should have done the exact same thing two years ago. Now it's too late. The best you can hope for is another public company coming in and buying you.
 
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