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WBLS Sale Appears Likely

DavidEduardo said:
badjef said:
Then if it wasn't radio-related, what was Innercity's other business that took down the profitability of their radio stations to a point that they had to liquidate the profitable arm of the company?
Click to expand...

All I said was that the current issues have to do, as has been explained, with other debt. The approximately $250 million in debt does not come from some minor technical costs nearly 20 years ago.

The root cause of the problem is that Inner City expanded via debt-financed station purchases, couldn't make enough to pay for them, did not cut expenses enough, and then kept trying to refinance, sometimes capitalizing the missed interest payments.

The debt comes from radio... I don't know why you think it is not radio related... and it is probably 100 times what the minor matter of upgrading WLIB cost. Further, the WLIB upgrade was likely, even if capitalized, amortized before we were more than a few years into the 21st Century. Many stations have to make transmitter moves or are faced with a major rebuild of a transmitter site, and it does not bankrupt them. All we are talking about with WOWO is a purchase, followed by a downgrade of the signal, and then a resale at almost the same price plus some relatively simple re-engineering costs.

You say "the part that was profitable" but the issue is that while there may have been some decent cash flows from operations, there was not enough to pay down the debt.
Click to expand...
Well, that was what I got from you when you said, "The $400 k loss is pocket change, if you consider WBLS grosses that much a week." My apologies if I misunderstood that statement.
Sort of like having the money to pay the water and electric, but not the mortgage.
Click to expand...
Yea, similar to the Clinton Administration's fun and games with terms such as "off-budget" to "create" a "surplus".

Back on topic: Somebody said Innercity was only in business since 2006. I remember Innercity long before that and Percy Sutton being involved.
Did this (bancrupcy) have anything to do with Percy Sutton, or was he retired from Innercity before he died?

Some of my gray cells have gone away to connect the dots from Long Island Broadcasting (the L.I.B. of WLIB) to Innercity.

Jeff in Sa-ra-so-ta!
 
badjef said:
Back on topic: Somebody said Innercity was only in business since 2006. I remember Innercity long before that and Percy Sutton being involved.
Did this (bancrupcy) have anything to do with Percy Sutton, or was he retired from Innercity before he died?
Click to expand...

Percy Sutton co-founded Inner City in 1971, and made the purchase of WLIB the next year. That was, IIRC, the first major market Black owned station... of course, ones like Leroy Garrett's WEUP in Huntsville were Black owned some time before that.

Mr. Sutton was involved with the company until very shortly prior to his death... and he certainly was responsible for the expansion, particularly after consolidation. He also had investments in the Apollo Theatre and the New York Amsterdam News, which I believe he sold... and I'm not sure if those were part of Inner City.

The statement was that Inner City disposed of non-core assets in 2006, not that it was founded then. They bought KBLX in San Francisco back in 1979, in fact. WBLS and WLIB account for over half of the company revenue (17 stations). WBLS, WLIB and KBLX account for 75% of the gross income.
 
According to InsideRadio and other publications, the U.S. Attorney's office has filed a request with the bankruptcy court to prevent the sale of Inner City's assets. It alleges that the way it is structured, the proposed sale is primarily a tax dodge.
 
Barry said:
According to InsideRadio and other publications, the U.S. Attorney's office has filed a request with the bankruptcy court to prevent the sale of Inner City's assets. It alleges that the way it is structured, the proposed sale is primarily a tax dodge.
Click to expand...
If true,
...BUSTED!

Jeff in Sa-ra-so-ta!
 
We may learn more about the fate of WBLS/WLIBandthe other Inner City stations very soon.
Radio Business Report has an article stating that a hearing to approve the sale of Inner City and to rule on the objection by the U.S. Attorney's office is scheduled for next Tuesday, 2/21. The article states that a group of creditors made a "stalking horse" bid for the Inner City radio properties, for $180 million. Anyone else that wants them would have had to offer a higher bid by now.
 
As expected, YMF media, a consortium of creditors, has been given the go ahead in bankruptcy court to buy WBLS and all other Inner City Stations. This is according to a new RBR article linked below. It states that the court dismissed objections from the IRS, and others. No other party materialized to make a bid higher than their $180 million dollar offer.
The article indicates that in actuality, they will get the stations for considerably less than $180 million, which is said to be quite a bargain.
The RBR report states that one station in another market will eventually need to be sold due to market limitations. I wonder whether YMF intends to operate all the other stations, or to sell some of them.

RBR Article on Inner City Sale: http://www.rbr.com/radio/inner-city-sale-to-ymf-media-approved.html
 
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