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WRIF PD Out & Other Beasley Cuts

U

umfan

https://www.allaccess.com/net-news/...detroit-pd-mark-pennington-is-out-plus-wrif-m


https://theenterpriseleader.com/201...s-significant-increase-in-short-interest.html


Mark Pennington losing his job could not have been performance based. He guided WRIF through the transition from Drew & Mike to Dave & Chuck (The Freak) and has kept ratings high in both cume and within the demo. It appears as if the company is making cuts in many markets. The article indicating an increase in short interest likely is due to concerns with maturing debt and at least some thoughts that the company may not be able to refinance it. I suspect that Mr. Pennington will be able to find other work, but he came to WRIF before the industrywide crash in billings and likely would have to take a significant haircut in compensation. Anne Carlini is likely to quickly find other work, maybe even in the Detroit market.
 
It's the possibility of a financial covenant default in the not too distant future (First Lien Leverage Ratio) that has equity investors in BBGI worried.

The company in its SEC financial filings purposely seems to avoid discussion of EBITDA and financial covenant headroom, both ominous signs.

If the company can broker a deal with its lenders to modify the existing Credit Agreement and to loosen financial covenants, it should be in-the-clear until at least 2022. Most of Beasley's LT debt does not mature until 2023.

What will be interesting to see is whether or not any prospective Credit Agreement modification requires to the company to reduce or completely suspend dividend payouts to shareholders. For a company in a declining industry, Beasley's debt load is high. Leverage ratios are near 6x based on unadjusted EBITDA.

BBGI has been making some side investments in E-Sports (competitive video gaming) ventures. This appears to be a hedge of sorts against radio's declining appeal among the younger segments of the population.
 
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