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WSJ: Citadel Bankruptcy Near

BossRadioDJ

BossRadioDJ

The Wall Street Journal reports that Citadel Broadcasting is ready to file bankruptcy:

Citadel Broadcasting Corp., the third-largest radio broadcaster in the U.S., is preparing to file for bankruptcy by the end of the year, according to people familiar with the matter. ... Under the deal presented to lenders this week, Citadel would file a "prearranged" Chapter 11 bankruptcy plan.

Citadel owns talkers KGO (810 AM) and KSFO (560 AM) here.
 
This isn't "The Death Of KGO," as has been rumored elsewhere. It's just a means for Citadel to restructure its debt and remain in business.
 
BossRadioDJ said:
This isn't "The Death Of KGO," as has been rumored elsewhere. It's just a means for Citadel to restructure its debt and remain in business.
Click to expand...
Yeah - there's a reason the term is bankruptcy "reorganization. " KGO and KSFO aren't going anywhere - though further budget cuts can be expected. An obvious place to cut is the KGO news department - let's face it - the station is primarily in the talk show business. My personal (long held) opinion is that the the two daily news blocks are ultimately a losing proposition - the territory is covered better by NPR (KQED) and KCBS. We'll see what happens, but I expect the worst case scenario is that another corporation might pick up the 2 stations at fire-sale prices, but "going dark" is not going to happen.
 
All the stockholders lose the value...oops Citadel closed at 1 cent a share down from 4 cents.
Already gone!
The value of Citadel went form $2 billion in '04 to $12 million today. I know the economy is bad but the CEO stays after taking a company down like that?
Talk about failing up.
 
Is Citadel a privately held company?

You'd think, if it is public, there would have been a lynch mob mentality at the last stockholder meeting.

Or is the stock fall-from-grace a more recent event?
 
My personal (long held) opinion is that the the two daily news blocks are ultimately a losing proposition - the territory is covered better by NPR (KQED) and KCBS.
Click to expand...

And that, as you said, is a matter of opinion. I think one of KGO's strengths is that they have both news and talk. Besides, I happen to like KGO's news much more than the others; KCBS is a good station but they're a bit dry, for example. KGO has had long-term success because of the formula they've had, and their news being a part of it.
 
So the Banks WILL NOW OWN the company...I think they do/did anyway based on the debt.

Now they may want to get some money out, so I would think everything is in play.
Hello Cox! Hello Bonneville!

BTW, for those who think Disney still has a part of the ABC Stations and Radio Net. They don't. They were the folks who got the 2.7 Billion from the banks that will now own us. The Disney Shareholders Did get Citadel stock after the sale,
but most of them dumped it. The Company got the cash.
 
There is no doubt they will sell, but not right away. They won't want to take multiples of 2 or 3, and that's likely all they'll get right now. I will be surprised if Bonn Int doesn't take a swing at the great old ABC properties at some point, either ala carte or as a package.
 
1069_KIFR said:
Disney ought to come in and scoop them back up for a huge discount.
Click to expand...

There was a reason they sold that package, and they won't be buying it all back, regardless of the price.

Their next step will be to sell the TV properties. If they can find a willing patsy like they did two years ago, they'll jump.
 
Yes the Mouse has been trying to sell off the TV stations for the last 2 years...they won't Buy back Radio. They have even been selling off
a few of the Radio Disney and ESPN radio stations of late. About 4 years ago, Bob Iger spoke to KGO TV & Radio he stated then that Disney wanted to be a "Content Company" NOT a Platform Company...2 months later he put Radio up for sale.
 
BossRadioDJ said:
This isn't "The Death Of KGO," as has been rumored elsewhere. It's just a means for Citadel to restructure its debt and remain in business.
Click to expand...

Oh indeed the company will survive, though they may have to sell off some stations or perhaps the network. What gets me is that they're planning on keeping the present management in place. Usually when a company declares bankruptcy the creditors bring in someone who has some experience at bringing a bankrupt company back to life.
 
In the case of GM, it didn't work. They brought back a previous company executive, and he wasn't much better.

This isn't about justice, and blaming a CEO for driving a company off a cliff. That's a different process. The stockholders will probably do that if they sue. This is about getting the money back to the creditors. It's a very tangled web that was woven, and only a few people know all the details. To get it done quickly, they need the people who wove the web. But they will have some very careful supervision. And if they didn't want him there, and thought he was the problem, they could get rid of him.

My sense is that the real problem at Citadel was Forstmann Little. That investment company was a majority stockholder. And from what I can see, those folks are out, and got left with nothing. They were the ones who wanted to buy ABC Radio. Farid just did what they wanted, and found ways to get it done.
 
TheBigA said:
In the case of GM, it didn't work. They brought back a previous company executive, and he wasn't much better.
Click to expand...

Huh? GM is out of bankruptcy and on its way to becoming profitable. They changed CEOs again because the one they brought in was a specialist at turnarounds, but not in long-term operations. Companies require people with different skills at different times. This is why most company founders bring in CEOs to run things -- think Google.

To get it done quickly, they need the people who wove the web.
Click to expand...

That's the argument all the bankers are using. "We got us into this mess, so you need us to get us out." There are plenty of skilled CEOs out there, certainly people who have better vision. Heck even I knew that the economy was about to go off a cliff, which is why I sold my stock and pulled in my horns for a year.

Farid just did what they wanted, and found ways to get it done.
Click to expand...

Farid was the majority stockholder of the old Citadel. He wasn't just a hired hand.
 
DavidKaye said:
They changed CEOs again because the one they brought in was a specialist at turnarounds, but not in long-term operations.
Click to expand...

They've had now several CEOs this year; the most recent left after a few months because of what the financial press indicates has to do with the impossibility of government intervention; the salary caps mean the best people are leaving... such as the Buick manager a few weeks ago. There are serious doubts that the company can make it in the long run by many. If there is a turnaround there, it will take years and require an almost total remake of the company and its mostly dreadful cars.

Farid was the majority stockholder of the old Citadel. He wasn't just a hired hand.
Click to expand...

Farid has about 3% of the shares. With the filing, they will be essentially valueless.
 
DavidKaye said:
What I meant to say was that at one point he had the most shares rather than the majority.
Click to expand...

You need to read the chart more carefully. He owns the most shares of any company employee. That's obvious. But there are non-employees and non-financial institutions that own more. Hoover says as recently as a few months ago Forstmann Little still owns 27% of the company. That of course would change under this new deal. Ted Forstmann is the one who sought out and hired Farid.
 
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