"Please change your radio dial now to 98.7 FM"

[BillBattle]

Citadull CEO solicited a lot of investors including his employees to buy the stock. They got nothing and you praise him. The people he sold the debt too wanted to get a interest return and their money back. He paid too much for those ABC station 2.5 billion and had to write of his investment in the same year. He screwed a lot of people and will go down as the worst broadcast CEO in the industry. Somebody should ask his old boss Mel Karmazian what he thinks of Faried performance.

 

[Tennessee Cowboy]

Tibbs2, thank you for the kind words and the compliment.

Although I don't know the exact details relating to 100.3, my best guess is Citadel may be using the 100.3 loss as a trade-off of some sort. In any high finance, or even in smaller situations, it isn't necessarily how many pluses and minuses you have on the Balance Sheet that determines success or failure, but rather how you play the pluses and the minuses. In other words, a minus isn't always a loss. Played correctly, a minus can actually be a plus.

Say what?

In accounting terms it is refered to as Debits and Credits. Using Generally Accepted Accounting Principles (GAAP) there are tradeoffs, mostly for tax purposes, but there can be other advantages. Any competent CPA will tell you the same thing.

Citadel is no slouch company when you consider all the facts. They may have lost the 100kw 100.3 in Knoxville, however, at the same time, Citadel also wiped out billions in debt while its executive team has maintained control of the company and kepted its prized ABC station portfolio. In Knoxville, Citadel is still a major player with its prized WIVK, even without 100.3.

Ahhh... The Mamma Carlson tax strategy...

Kinda like quitting your $100k/year job to keep from giving the government $25k

Kinda like marrying a prostitute for companionship at night

Kinda like firing one of the country's most talented GM's because you don't like how much you pay him

Kinda like blowing a couple million a year in profit to... to... to... Sorry. Got nothin'.

If it works on that scale, it should be even more beneficial to swap Johnny 107.7 even for 100.3. That would be an even LARGER tax benefit.

Or they could just give WIVK to me. I'll even rent 'em a helicopter this November for the 98.7 Oliver Springs Giant Turkey Drop.

 

[jmtillery]

Citadull CEO solicited a lot of investors including his employees to buy the stock. They got nothing and you praise him. The people he sold the debt too wanted to get a interest return and their money back. He paid too much for those ABC station 2.5 billion and had to write of his investment in the same year. He screwed a lot of people and will go down as the worst broadcast CEO in the industry. Somebody should ask his old boss Mel Karmazian what he thinks of Faried performance.

I had to really look to find your response as it was mixed with previous quotes.

First off let's make a one thing completely and perfectly clear. I have no ties with Citadel nor any other broadcaster in Knoxville. I happen to like the Knoxville radio market and the market in general. I think there are very good people there in addition to good radio in Knoxville.

Now with that said, I'll move on to point two.

I have nothing to gain nor lose regardless of what happens with Citadel nor any other radio group in Knoxville. I'm not in any way connected to nor praising anyone. I am, however, pointing out a few facts.

As for Citadel paying "too much" for the ABC stations, that is a matter of opinion. Basic economics dictates that anything is worth as much as anyone is willing to pay for it. Since Citadel was willing to pay $2.5 billion for the ABC radio portfolio, that makes the ABC radio portfolio worth $2.5 billion. That does not mean those stations are worth that much to you and I, but they were to Citadel.

Hopefully things will get back to "normal" in Knoxville and back to everyone's liking within a short period of time.

 

[jmtillery]

[/quote]

Ahhh... The Mamma Carlson tax strategy...
[/quote]
Regardless of where you may have heard the strategy from, even "Mamma Carlson", doesn't make the strategy any less valid.

 

[jmtillery]

Citadull CEO solicited a lot of investors including his employees to buy the stock. They got nothing and you praise him. The people he sold the debt too. He screwed a lot of people

Also, I'd like to add that my original statement regarding Citadel was in reference to a comment from someone who said Citadel managemet was not very smart. I don't call what Citadel pulled off as anything but brilliant (agree with the tactics used or not, it is what it is) although I totally and completely disagree with the unethical, yet legal, methods used to accomplish what was accomplished. I, for one, have morals and ethics in my business dealings and practices, and I believe most, if not all, on this board feel the same way regarding ethical behavior.

I also acknowledge that some very good and talented people in Knoxville were profesionally hurt in the process. Believe me, I feel for each of them. However, we need to consider that something is what it is, so the best thing anyone can do is pick up the pieces and move on, and if you don't like Citadel, don't do any business with them due to your own personal convictions.

Again, I'm not praising anyone. I'm only recognizing the facts of the matter, so don't "shoot the messenger" in the process simply because you don't necessarily like what you are reading.

 

[Tennessee Cowboy]

Ahhh... The Mamma Carlson tax strategy...
[/quote]
Regardless of where you may have heard the strategy from, even "Mamma Carlson", doesn't make the strategy any less valid.
[/quote]

Citadel has hundreds of millions in write-offs thanks to the bankruptcy. The most pessimistic estimate by the 'experts' here says that 100.3 was generating a couple million a year in profit. The last thing they need right now is more lost revenue. And if so, wouldn't they get even more benefit by getting rid of their big cash cow in Knoxville instead of their second biggest?

Much obliged if you'd shed any light on why they'd welcome less cash flow these days.

 

[knoxside]

There is no way that WNOX was generating 2 million in cash flow. They had a $720,000 per year LMA payment before they even got around to paying the normal day-to-day bills. At best, they may have generated somewhere in the neighborhood of $500,000. They would have been hard pressed to do any better than that.

I wouldn't say that Citadel is the best run company, but it doesn't take a genius to figure out why they got out from under the LMA. It obviously wasn't making any (or enough) money for them. That' the only reason a company moves away from an asset like WNOX. That coupled with the fact that they were putting a lot of effort into something they don't own.

I have no love lost for Citadel. However, I have to say to all their critics that it's easy to be an armchair CEO when you have nothing at stake. Maybe, just maybe, when all the facts were taken into consideration getting rid of WNOX might have been the best strategy. Regardless, Knoxville benefits by now having a locally owned and operated radio station. Hooray for that!

 

[Tennessee Cowboy]

There is no way that WNOX was generating 2 million in cash flow. They had a $720,000 per year LMA payment before they even got around to paying the normal day-to-day bills. At best, they may have generated somewhere in the neighborhood of $500,000. They would have been hard pressed to do any better than that.

I wouldn't say that Citadel is the best run company, but it doesn't take a genius to figure out why they got out from under the LMA. It obviously wasn't making any (or enough) money for them. That' the only reason a company moves away from an asset like WNOX. That coupled with the fact that they were putting a lot of effort into something they don't own.

I have no love lost for Citadel. However, I have to say to all their critics that it's easy to be an armchair CEO when you have nothing at stake. Maybe, just maybe, when all the facts were taken into consideration getting rid of WNOX might have been the best strategy. Regardless, Knoxville benefits by now having a locally owned and operated radio station. Hooray for that!

How much do you think 100.3 was billing under Citadel? Just curious as to what you think it was sending home to Vegas after it paid Johnny.

 

[knoxside]

How much do you think 100.3 was billing under Citadel?  Just curious as to what you think it was sending home to Vegas after it paid Johnny.

As I'm sure you know, billing and what you send home are two different things. I would guess they were billing around $3.5 to $4.0 million and after LMA they could have been sending as little as $100,000. All speculative, but reasonable assumptions.

For Pirkle, if he can get the billing up to the same level WNOX was before the plug was pulled, he can probably keep his costs lower and without the LMA payment maybe generate $1mil in cash flow. Once he gets the station to that point it should be easy to find a buyer, if that's what he wants.

 

[MN Maniac]

FWIW, I went to the Smokies yesterday and conducted an unofficial signal strength test:

98.7 is barely adequate in the city of Sevierville. From where I was sitting, WTFM/98.5/Kingsport had equal or slightly better signal strength. Weaker still in Pigeon Forge...marginal in Gatlinburg...gone completely once you get into the National Park.

By comparison, 100.3 was solid (albeit with the expected terrain shadowing) throughout the entire region.

Call me crazy, but I don't think this plan is going to work very well for Citadel.

 

[gr8oldies]

I suppose somewhere on a balance sheet it shows that even with less coverage and the loss of advertising or lower ad rates, Citadel still comes out on top after dumping the LMA payments. They probably didn't count on Pirkle doing a competing talk format on the signal, and destroying their claim to the WNOX brand. Citadel can cut their losses by abandoning talk, selling the intellectual property to Pirkle, and putting the True Oldies chanel back on 98.7.

 

[Fiveahead]

How much do you think 100.3 was billing under Citadel? Just curious as to what you think it was sending home to Vegas after it paid Johnny.

As I'm sure you know, billing and what you send home are two different things. I would guess they were billing around $3.5 to $4.0 million and after LMA they could have been sending as little as $100,000. All speculative, but reasonable assumptions.

For Pirkle, if he can get the billing up to the same level WNOX was before the plug was pulled, he can probably keep his costs lower and without the LMA payment maybe generate $1mil in cash flow. Once he gets the station to that point it should be easy to find a buyer, if that's what he wants.

If your figures are correct I would venture a guess and say they were putting around 1.4m on the bottom line and in the bank with 100.3. That's nothing to sneeze at and certainly nothing to walk away from considering they were putting just a spoonful less than that in the bank with Oldies 98.7 to begin with.

The current management team for 100.3 will not have the same overhead and they're the "good guys" in this whole ordeal so it wouldn't be outrageous to expect them to generate similar revenues while piling the cash up.

If Pirkle wanted to sell I'm sure he would have sold a long time ago. He's in it for the long haul.

I suppose somewhere on a balance sheet it shows that even with less coverage and the loss of advertising or lower ad rates, Citadel still comes out on top after dumping the LMA payments. They probably didn't count on Pirkle doing a competing talk format on the signal, and destroying their claim to the WNOX brand. Citadel can cut their losses by abandoning talk, selling the intellectual property to Pirkle, and putting the True Oldies chanel back on 98.7.

Citadel thought, as did every broadcaster in America, that the Pirkle/Brantley team was putting on a "Frog Killer" format to go head to head with WIVK. Seeing that they're making possibly the smartest move in history by keeping the format in place as News-Talk Citadel could do the second smartest move in history and bring back the Oldies format sometime around "football time in Tennessee" and make a lot of displaced listeners very, very happy.

 

[gr8oldies]

The Pirkle version of WNOX is posting on their Facebook page again. They've signed Dave Ramsey to the 12-3 slot, instead of the double-run of Savage.

http://www.facebook.com/profile.php?id=1559772428&v=wall&story_fbid=144983878851379&ref=notif&notif_t=feed_comment_reply#!/pages/West-Knoxville-TN/WNOX-News-Talk-1003/124876570888561?__a=16&ajaxpipe=1

 

[MN Maniac]

Looks like now, we're going to have the Battle of the Facebook Fan Pages as well! New WNOX pages vs new News/Talk 98.7 pages. This just keeps getting better and better!

"WNOX debuts August 2010. The One you can trust."

 

[knoxside]

If your figures are correct I would venture a guess and say they were putting around 1.4m on the bottom line and in the bank with 100.3. That's nothing to sneeze at and certainly nothing to walk away from considering they were putting just a spoonful less than that in the bank with Oldies 98.7 to begin with.

I'm saying that they were only putting about $100,000 to the bottom line after LMA payments.

 

[Tennessee Cowboy]

If your figures are correct I would venture a guess and say they were putting around 1.4m on the bottom line and in the bank with 100.3. That's nothing to sneeze at and certainly nothing to walk away from considering they were putting just a spoonful less than that in the bank with Oldies 98.7 to begin with.

I'm saying that they were only putting about $100,000 to the bottom line after LMA payments.

How do you allocate expenses to come up with a $9,000 a month profit from $250k or more in monthly billing?

 

[gr8oldies]

Pirkle starts a Facebook page and Citadel dumps Dave Foulk's social media efforts.
o...k.

 

[jmtillery]

Citadel has hundreds of millions in write-offs thanks to the bankruptcy. The most pessimistic estimate by the 'experts' here says that 100.3 was generating a couple million a year in profit. The last thing they need right now is more lost revenue. And if so, wouldn't they get even more benefit by getting rid of their big cash cow in Knoxville instead of their second biggest?

Much obliged if you'd shed any light on why they'd welcome less cash flow these days.

There are other advantages besides simpy a tax write-off which I will not go into on this board.

 

[Fiveahead]

If your figures are correct I would venture a guess and say they were putting around 1.4m on the bottom line and in the bank with 100.3. That's nothing to sneeze at and certainly nothing to walk away from considering they were putting just a spoonful less than that in the bank with Oldies 98.7 to begin with.

I'm saying that they were only putting about $100,000 to the bottom line after LMA payments.

I got that. I'm saying you're about a million and change low ($1 million +).

 

[boogiecheck]

A quick drive this evening shows that Citadel has taken all of the vinyl off of their "Newstalk" remote truck. Their traffic car is parked so far back in the lot it's just almost at the Ice Chalet.