Winter 2015

[SirRoxalot]

The Dickeys own a fraction of Cumulus. They serve at the behest of the major shareholders. Crestview Partners has 15 times more shares than Lew Dickey. Crestview has 12 times the number of shares than Lew and John Dickey combined. They could be out in a heartbeat if Crestview decides they're not doing the job. Crestview ended up with the company because the Farid-led version of Citadel went bankrupt. The Citadel/Cumulus merger was determined by Crestview's decision, not the Dickeys.

iHeart is privately held because there's no way that they can sell off their assets, or generate enough money from an IPO to offset their massive debt. They may as well operate and put off the bankruptcy for as long as possible so they can reap some profit while they can. Their exhorbitant refinancing terms and the sell-off of tower properties give you a clue as to where they expect to be in the future. Bain Capital, LLC and Thomas H. Lee Partners will do their best to get their money out of iHeart before the eventual collapse. If it survives, they'll have already made their money, and will be happy to part with it. Bain and Lee essentially got stuck with the company in 2008 because Clear Channel had borrowed so much money from them. There's a reason that the Mays family is no long part of the management.

 

[TheBigA]

The Dickeys own a fraction of Cumulus. They serve at the behest of the major shareholders. Crestview Partners has 15 times more shares than Lew Dickey.

That's what I'm talking about. There are a dozen companies just like Crestview, and none of them expect to make their money back quickly. If they did, they wouldn't be in radio. Do you think Larry Wilson is using his own personal money?

iHeart is privately held because there's no way that they can sell off their assets, or generate enough money from an IPO to offset their massive debt.

You keep saying that, but it's not true. The IHeartRadio platform alone has been valued at over $10 billion. And they're enlarging their business into concerts, TV shows, and much more. That's why they're not spending a lot on broadcasting. That egg is never going to hatch. Any company that sees this as a radio-only business will follow Citadel and Regent.

 

[dand5780]

Dand5780, we've had to put up with your ill-informed opinions about WBFO. I will point out that WBFO today earned 13 nominations for news awards in the AP 2014 competition, the most of any radio station in New York State. Your favorite radio station had three. Yet, that's not the reason I'm writing. I take issue when you start criticizing someone of the integrity of my friends Bill Lacy. Who are you? You're probably a nothing who has no accomplishments on your resume. Bill is a Hall of Famer. So, crawl back into your right wing hole and spare the rest of us of your stupid analysis.

Someone here wanted to hear from someone who listens to more than talk, so I posted my take on most of the radio stations on the list, and then some.

I'm only going to respond regarding Bill Lacy. At no point did I ever criticize his integrity.

I am just stating my opinion on the station, which is one of my favorite stations. I go to 104.1 to listen to music, and then get his take of an article he pulled off of Yahoo (most of which I read the night before).

Is this Radio Discussions, or "Don't Criticize My Friend?"

If he didn't say anything, then I wouldn't have an opinion of him, just like I don't have one about the rest of the hosts/DJs/whatever they are on that station. I don't even know their names. I go there for the music.

If they summarize Yahoo articles (in their "own" words), that's fine by me. Because we all know that there is that particular demographic out there that wants to hear something absurd or ridiculous (whether it actually happened or not). But I can still have an opinion on whether I like that or not.

 

[SirRoxalot]

That's what I'm talking about. There are a dozen companies just like Crestview, and none of them expect to make their money back quickly. If they did, they wouldn't be in radio. Do you think Larry Wilson is using his own personal money?

Crestview loaned money to Citadel based on Farid's prospectus. They ended up with Cumulus because Citadel went bankrupt, and Cumulus was on the verge. The Dickeys avoided bankruptcy via the "merger". Crestview got snookered by Farid - and payed him $38-million to go away after he demanded even more. Owning was preferable to taking a beating on a sale in 2008.

The IHeartRadio platform alone has been valued at over $10 billion. And they're enlarging their business into concerts, TV shows, and much more. That's why they're not spending a lot on broadcasting. That egg is never going to hatch. Any company that sees this as a radio-only business will follow Citadel and Regent.

Valued by WHOM? iHeart is struggling to pay the interest on their debt, let alone reduce it. Pittman is selling Bain and Lee on the idea that he can use radio to drive people to their other business interests, and get them out of radio before the bottom falls out. His actions indicate that he believes that radio will be over as a medium by the time his tower leases run out in 15 years. His actions have a chance to make that prophecy come true. If selling off stations would eliminate the debt, they'd be gone. Prices simply aren't moving in that direction.

 

[TheBigA]

Crestview loaned money to Citadel based on Farid's prospectus.

What's your point? If they want to get out, there are lots of similar investment firms waiting to buy the debt. No problem. But they don't, and they seem to be giving the Dickeys a lot of latitude. And as I said in my earlier post, I don't see any other investment firms anxious to get out. And radio stocks haven't been exactly hot lately. That includes Pandora and Sirius.

His actions indicate that he believes that radio will be over as a medium by the time his tower leases run out in 15 years.

There are some who say it's over now. Once again, historically radio was in better shape when part of other businesses. Such as when the electronics industry owned radio. Or department stories. Or car dealers. Radio works best in partnerships with other businesses. CBS is a great example of that. We see that same thing with Sirius. It's in far better shape now as part of a major cable company. Pandora would be in far better shape if it was owned by someone who could leverage its assets better. As long as it's a stand-alone radio company, it will continue to lose money. IHeart is no different. IHeart will get to a point where the value of its other businesses will exceed radio. That's when they'll be ready for an IPO.

 

[SirRoxalot]

What's your point? If they want to get out, there are lots of similar investment firms waiting to buy the debt. No problem. But they don't, and they seem to be giving the Dickeys a lot of latitude. And as I said in my earlier post, I don't see any other investment firms anxious to get out. And radio stocks haven't been exactly hot lately. That includes Pandora and Sirius.

You might want to read that again. You contradict yourself. Nobody's lining up to buy new radio debt - at least not unless it's short-term and at ridiculously high rates. Look at what iHeart paid for its latest debt rollovers - over 10% when prime is just over 3%. They CAN'T get out.

There are some who say it's over now. Once again, historically radio was in better shape when part of other businesses. Such as when the electronics industry owned radio. Or department stories. Or car dealers. Radio works best in partnerships with other businesses. CBS is a great example of that. We see that same thing with Sirius. It's in far better shape now as part of a major cable company. Pandora would be in far better shape if it was owned by someone who could leverage its assets better. As long as it's a stand-alone radio company, it will continue to lose money. IHeart is no different. IHeart will get to a point where the value of its other businesses will exceed radio. That's when they'll be ready for an IPO.

Let's not confuse CBS with iHeart. Two completely different situations there. If iHeart follows the Pandora model, they've got a real problem:

"While Pandora’s bottomline performance was better than expected, its losses widened by over 67% year over year." To the tune of $48.3-million. They're still a long ways from profitability, in spite of gains in listenership. You might want to give this a gander:

http://www.trefis.com/stock/p/artic...n-wider-losses-future-remains-grim/2015-04-24

If that's where iHeart is headed, good luck with the whole enterprise, not just the radio division. Meanwhile, Pittman will line his pockets, jet around the country, and hit the best parties. He really ought to consider that every million he burns through in jet fuel costs 10-15 jobs for average schlubs in the iHeart trenches.

 

[TheBigA]

Nobody's lining up to buy new radio debt

Really? Someone is bankrolling all of these companies that are buying these stations. It's not coming from personal money. And they're not doing it for short term gain. You have to be in it for the long haul.

If iHeart follows the Pandora model, they've got a real problem:

Did I say IHeart is following the Pandora model? If I did, I'm sorry. They're not. Pandora should be following the IHeart model. Why? Because IHeart is negotiating directly with record labels for the music they play. Pandora is paying what three judges tell them to pay, and those royalty payments are eating up over half of their revenues. IHeart gets a better deal through their multi-platform model. Because IHeart negotiates directly, they get artists to appear at their IHeart festivals and their IHeart awards. Has Pandora been able to do either of those things? No. Festivals make money. The live music scene is perhaps the only place where music makes money. And IHeart is a player. Pandora is not. Investors can see that, and as IHeart builds its other businesses, it becomes more attractive to investors.

Townsquare is also in the multi-platform world. Their websites are generating millions, and are among the most-viewed music web sites in the US. They're using their IPO money to buy regional festivals, where they'll make even more money. They use their radio stations to promote the festivals and the web sites. As I said, it's the future of radio.

 

[Element9]

No real argument to your point. If radio stay on the platform and doesn't get on the train, they miss the ride, even if the train doesn't have too many paying passengers and runs off the tracks.

Speaking of running off the tracks, multiple sources report that Crestview Partners, the investment firm that truly owns Cumulus Media, Inc., pushed Lew Dickey out of the Chairman's seat in order to get a stronger handle on the company's decision making process. Dickey remains as President and CEO of Cumulus, no small feat, but it's clear that with the Cumulus share price at its lowest point in years ($2.37 at close of business Tuesday, 4/28/15), Crestview is making moves to protect its investment. Dickey's days may be numbered, despite the number of shares and voting power he may hold. Crestview controls the cash and wants an improved share price. Good luck with that. Analysts don't see good things happening to Cumulus, one of them commenting, "Hard to believe this company's bonds are trading nearly at par when the banks hold almost all the debt."