Parent Companies Crashing

[Davie123]

I read the financial trades more than the radio trades nowadays, and I am alarmed at the number of media companies in trouble, especially parent companies of our local stations. Most recent is Lincoln National (aka Lincoln Financial) that owns WLYF-WMXJ. Stock has plummeted this week, and company has been downgraded by two major rating services. Clear Channel has been downgraded below junk bond status by Moody's and the rating service has expressed concern about the company's ongoing operations.
Will this be the "Summer of Bankruptcy" in the media business?

 

[Goat Rodeo Cowboy]

The possibility is certainly there. I am amazed and all the interlocking relationships that bubble to the surface as individual situations come to our attention.

It wasn't until yesterday that I realized who is apparently a big player in the purchase of The Weather Channel by NBC-Universal. Some group called Bane Associates.... as in the money/credit that made the current Clear Channel circumstances possible.

I wonder what else Bane has on their plate.

 

[Davie123]

The company name is actually Bain Capital. And you are correct, it is one of the private equity firms that financed the Clear Channel deal....just before the economic crisis hit. Great timing, huh?

 

[radioman148]

I read the financial trades more than the radio trades nowadays, and I am alarmed at the number of media companies in trouble, especially parent companies of our local stations. Most recent is Lincoln National (aka Lincoln Financial) that owns WLYF-WMXJ. Stock has plummeted this week, and company has been downgraded by two major rating services. Clear Channel has been downgraded below junk bond status by Moody's and the rating service has expressed concern about the company's ongoing operations.
Will this be the "Summer of Bankruptcy" in the media business?

It doesn't look good to say the least.

 

[Grk_ScorpioInTheMIA]

Think of it this way, if these companies went belly up, there is a chance the stations they own will be put up for sale, and hopefully those stations can finally fall in the hands of those who actually care about and have a passion for radio.

 

[Goat Rodeo Cowboy]

Think of it this way, if these companies went belly up, there is a chance the stations they own will be put up for sale, and hopefully those stations can finally fall in the hands of those who actually care about and have a passion for radio.

Then again.

I am reminded of McGillicutty's Anotation. I quoted "Murphy's Law" to someone one day and he asked if I knew about McGillicutty's Anotation. No.

McGillicutty: "Murphy? Yeah I know him. I think he is a bloomin' optomist."

I think a lot of us have this dream that widespread financial chaos in radio will put all these wonderful stations on the market and that there is this army of "Prince Charming" kind of fellows who will just gobble them up and "we will live happily ever after."

Here is what is likely to happen to some of them: Today's conglomerates were started by people THOUGHT they knew something about radio, and I am sure some of them were convinced they would go down in history as great innovators and the salvation of a dying, olf-fashioned radio world.

How much money can YOU come up with during the "fire sale"?

What if a bunch of people who know nothing about radio, and know that they know nothing about radio, and have no affection for "the disease" are the only people standing around with available money, and they buy all the radio stations simply because they ar a bargain.

What kind of owners would these peope be? Would they seek out "real radio people" and appoint them as stewards over their newly acquired treasures..... or would they turn out to have even tougher, meaner bean-counters than the present breed of owners.

Be careful what you pray for. Your prayer may be answered.

 

[Davie123]

I fear an even worse future. Commercial radio frequencies will be re-allocated to
other wireless services which consumers will value more than radio. Some of my
friends in Europe are amazed at how much spectrum is allocated to broadcast radio
in the U.S. Why is it wasted on such an outdated application, they ask? In the U.K.
the government has actually taken back frequencies and resold them to other wireless
services.

 

[davideduardo]

Some of my friends in Europe are amazed at how much spectrum is allocated to broadcast radio
in the U.S. Why is it wasted on such an outdated application, they ask? In the U.K.
the government has actually taken back frequencies and resold them to other wireless
services.

The AM* and FM bands are the same in Europe. In addition, Europe places AM stations every 9 kHz instead of every 10 kHz, so there are more "usable" channels. On FM, the channels are allocated in 100 kHz increments, not 200 kHZ as in North America, so in many cases there are more channels in the band.

*Europe does not use 1610-1700 at present, but uses the longwave band still.

 

[Goat Rodeo Cowboy]

I read the financial trades more than the radio trades nowadays, and I am alarmed at the number of media companies in trouble, especially parent companies of our local stations. Most recent is Lincoln National (aka Lincoln Financial) that owns WLYF-WMXJ. Stock has plummeted this week, and company has been downgraded by two major rating services.

You are reading their financials and I am not so there is a question you will have to answer. From my days as a Hoosier I remember Lincoln National as a pretty substantial company. Maybe they "split their pants" by paying too much to acquire Jefferson Pilot and they are in the same boat at a lot of other financial companies. Is broadcasting that big a percentage of their balance sheet? Is their stock running cheap today because broadcasting has drug them down, or is their stock running cheap because to paid too much to be come a conglomerate or bought too many flaky "financial derivatives" as part of the investment philosophy?

I honestly don't know the answer so I am not picking a fight. I just find it hard to believe that the broadcast properties alone have created whatever problems they might have.

 

[davideduardo]

I read the financial trades more than the radio trades nowadays, and I am alarmed at the number of media companies in trouble, especially parent companies of our local stations. Most recent is Lincoln National (aka Lincoln Financial) that owns WLYF-WMXJ. Stock has plummeted this week, and company has been downgraded by two major rating services.

Lincoln National is in the financial sector, and last week the government announced they may have to afford bail-out protection to insurance companies. This is because much of the reserve of insurance companies takes the form of securities, and most insurers have been hit by market declines.

This is not a radio issue, since the former Jeff-Pilot stations are pretty decent performers and able to weather the economy better than most.

Lincoln is not a media company, and radio is a tiny,t iny percentage of their operations.

 

[gr8oldies]

In the "good old days" that we're all fond of, insurance companies owned a lot of big stations. I'm definately aware of Lincoln Financial, they are in big name in Ft Wayne, IN whee I once lived.

 

[Davie123]

Lincoln National is in the financial sector, and last week the government announced they may have to afford bail-out protection to insurance companies. This is because much of the reserve of insurance companies takes the form of securities, and most insurers have been hit by market declines.

This is not a radio issue, since the former Jeff-Pilot stations are pretty decent performers and able to weather the economy better than most.

Lincoln is not a media company, and radio is a tiny,t iny percentage of their operations.


You are correct,David, but if the mothership goes down, all divisions go with it. Most of these companies have problems with their "securities" investments...more specifically "derivatives". Remember the "D word" in the coming months. They will be bringing down some bastions of financial power.

 

[otherradioboy]

Lincoln actually had most of their stations up for sale. In fact, Atlanta was nearly sold. They pulled the plug the last minute because they wanted to hold out until the market got better and they could get more money for Star 94 and 790 (which is LMA'd as sports). In Miami, there was word that Beasley wanted to buy 790 - presumably to get rid of the sports format, but that sale died too.

Lincoln does NOT want to be in the media biz, but when they bought Jefferson Pilot, they got radio and TV stations.

 

[Red78]

Just let me know when they cut that incompetent pee dee at that miami country station... He can't even say 'kiss' right.

 

[davideduardo]

Just let me know when they cut that incompetent pee dee at that miami country station... He can't even say 'kiss' right.

That's a Beasley station.

 

[Red78]

Just let me know when they cut that incompetent pee dee at that miami country station... He can't even say 'kiss' right.

That's a Beasley station.

OK. When they kick his incompetent a-- out, watch for the economy to improve.