if Townsquare is going to assume Millennium's crushing debt what are they going to do differently that Millennium failed to do to get out from under this debt?
After the financial transaction goes through, Townsquare will not have the same crushing debt. That is the point of the exercise.
People currently financially involved in Millennium are likely to be taking some kind of "big haircut" and it will depend on how the deal is structured who loses and how much. Townsquare is only buying because the price is very cheap.
Townsquare's biggest shareholder is Oaktree Capital Management LP, which manages about $80-billion in investment funds. It has a distressed debt unit that says this about what it does
Our approach seeks to combine protection against loss, which comes from buying claims on assets at bargain prices, with the substantial gains to be achieved by returning companies to financial viability through restructuring.
By the way, Oaktree is private and gets its money only from institutions and other entities. It takes huge bucks to put your money there, but it can be both flexible and creative in how it makes that money grow. It obviously sees great opportunity in radio stations with huge debts or in bankruptcy because the owners bought at the price peak.
MedianJ, you certainly have the right basic idea about cutting expenses and increasing revenue, but I think we differ on what kind of numbers are significant in restructuring of what started as much more than $100-million of debt.
You asked, "do excellent news people make more than jocks and talk show hosts at Millennium?" The ones who can read news cold for a full hour and keep the audience do. As I mentioned, 20-years ago AFTRA minimum scale at WCBS and WINS was already almost $100,000 a year. Back in the 1970s, WCBS had a morning anchor team that each made $330,000 a year, when that was really big money.
I have no idea of what Raquel Williams makes now, but if she becomes the afternoon star who successfully holds down the mike for several full hours every day, she will deserve more than what she gets for reading a couple of minutes an hour. And she would need an expensive support team to write, edit and produce her full hours.
As far as music licensing fees go, both ACAP and BMI now have to be paid for weekend use only. The BMI fee is less than 2% of net revenue for that period. ASCAP can't be that much different. We "might" be talking tens of thousands, not hundreds.
And Big Joe's salary, (and he is worth every penny) is not that big a deal at a station that brings in tens of millions.
Again, this all news thing is rumor, speculation and hypothetical, although if done right for the entire state does have the potential to create one of the highest grossing radio stations in the country. Certainly the current weekly cume of NJ-101.5 listeners, which is already impressive, could be increased substantially.
Remember, I don't expect such a harsh change, although I do see the potential of increasing the audience and ad revenue by upping the "intelligence level" for most of the day.
I think radioguy39nj's idea of a news based talk station makes a whole lot of sense for a whole lot of reasons. It gets the all news benefits in drivetime when it really helps ratings and revenues, and keeps the full station costs down by using cheaper talk shows at other hours. It also brings in all those potential listeners who think the current talk is "a little stupid" and like radioguy39nj, I agree Jim Gearhart and the morning team don't fit that description, and I think Big Joe is about as good as a music jock gets on weekends.
Since this is all speculation and hypothetical, we'll all have to wait and see what actually happens. It's going to be interesting!
