Time to move into new markets as the old ones fall by the wayside

[musicloverII]

I think one could look at it this way:

Less overhead, billing stabilizes. Make it easier to sell off.

I believe Disney will be unloading their stations in the next year or two at most. I believe Bonneville will exit certain markets and I also believe that Infinity is pairing down station's payrolls to unload them all. After 2008, I don't think they'll be able to get more than what they paid for them all.

Firesale's possible. Just an observation as to what's going on.

 

[Seven_Costanza]

Interesting theory you have there..

If you take the sum total of recent descions, it almost seems that they are attempting to devalue their properties as much as possible.

Infin already knows they're never going to be able to sell their stations for what they paid for them - they've already taken a multi-billion dollar write-off on the goodwill they paid.

If they are for sale there are only three possiblities; sell for a profit (which we know they can't), sell at cost (what's the sense in that?), or sell at a loss and take advantage of possible GAAP benefits.

So if the corporate stategy is indeed the 3rd option, why bother even trying? Milk 'em dry.

But, it should be noted that they seem to be putting some investment into technology (HD & streaming) which would be an "easier" sell to a possible new owner than say a multi-year Howard Stern, Kevin Matthews, Johnny B., etc. contract would be.

As far as other radio companies go, I don't think anybody will make any moves until Infinity makes their intentions known.

 

[dave73]

Re: Interesting theory you have there..

> If you take the sum total of recent descions, it almost
> seems that they are attempting to devalue their properties
> as much as possible.
>
> Infin already knows they're never going to be able to sell
> their stations for what they paid for them - they've already
> taken a multi-billion dollar write-off on the goodwill they
> paid.
>
> If they are for sale there are only three possiblities;
> sell for a profit (which we know they can't), sell at cost
> (what's the sense in that?), or sell at a loss and take
> advantage of possible GAAP benefits.
>
> So if the corporate stategy is indeed the 3rd option, why
> bother even trying? Milk 'em dry.
>
> But, it should be noted that they seem to be putting some
> investment into technology (HD & streaming) which would be
> an "easier" sell to a possible new owner than say a
> multi-year Howard Stern, Kevin Matthews, Johnny B., etc.
> contract would be.
>
> As far as other radio companies go, I don't think anybody
> will make any moves until Infinity makes their intentions
> known.
>
It's anybody's guess what each company will do. I agree with Musiclover that Bonneville will exit certain markets, and believe Chicago will be one of those markets. I believe Infinity will stay in Chicago. I believe Disney will sell their radio division. I read on other boards that Entercom is the likely contender for ABC radio. Question is, if they buy ABC Radio; will they buy the entire cluster (Radio Disney included)? And then from there, sell off the stations outside of the top 50 markets. No one will know the actual story until news leaks out on that one. I wish I knew myself what is happening with ABC Radio. Emmis might gain Bonneville's cluster since they're the only company in the market that can acuire the remaining cluster before reaching their limit. Infinity and Clear Channel are at their limit in Chicago and with all of their signals in the city, they're not able to acquire the Chicago cluster. I highly doubt Crawford has the money for Bonneville Chicago. If Nextmedia had the money, they might try for Bonneville, but more than likely would have to sell nearly the entire suburban cluster to do it. Does Newsweb have the money for city grade signals? Maybe not. And I only mentioned companies in the market. There are other companies that want to enter Chicago and didn't mention out of market companies.

 

[musicloverII]

Re: Interesting theory you have there..

Does Newsweb have the money for
> city grade signals?

Gosh, I hope not.

 

[Seven_Costanza]

Re: Interesting theory you have there..

You have to remember that Bonne' is "privately held"...

Meaning if they were to get out of radio, they'd want their share in cash, not stocks. I don't think there's anybody out there with that kind of cash or credit facilities available right now.

The story on Fred E. in the Trib says he's worth about $500 million. That means he might be able to buy one of Bonneville's Chicago stations.

They've been known to trade in the past though (especially with Emmis).

I still contend that nobody is going to budge until Infinity moves. Then they'll fall like dominoes.

 

[dave73]

Re: Interesting theory you have there..

> You have to remember that Bonne' is "privately held"...
>
> Meaning if they were to get out of radio, they'd want their
> share in cash, not stocks. I don't think there's anybody
> out there with that kind of cash or credit facilities
> available right now.
>
> The story on Fred E. in the Trib says he's worth about $500
> million. That means he might be able to buy one of
> Bonneville's Chicago stations.
>
> They've been known to trade in the past though (especially
> with Emmis).
>
> I still contend that nobody is going to budge until Infinity
> moves. Then they'll fall like dominoes.
>
I still believe somewhere down the line Bonneville will exit Chicago, but in the short-term, I don't see it happening with The Drive possibly benefitting from the demise of Oldies 104.3 (or whatever WJMK was calling themselves). I doubt Fred has other stations that would be of interest to Bonneville. I don't know if he owns stations outside of the Chicago market besides WDEK and WKIF, and we know they're of no interest to Bonneville.