Clear Channel files Chapter 11 (finally)

It is important to note that the description says some of the lenders are on board. It reads like this will be a contested bankruptcy. After the group supporting the plan pins down the details, there is a period during which the dissenting creditors can offer an alternative plan (like John Malone’s plan)

Radio Ink is in serious denial – Entravision reported a 15% drop in quarterly Radio revenue, yet they spin that as a sign of the health of Radio. Entravision is a Spanish language radio and TV operator.

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Revisiting the “trail of tears”

Over in Cherokee, North Carolina, there is a pageant called “Unto These Hills” that tells the story of the Cherokee people, from their initial contact with Europeans through their forced resettlement to Oklahoma during the Presidency of Andrew Jackson.

By 2006, attendance was dwindling because the story being told was not an accurate statement of the actual history. The play was written by a white man paid by the tribe to construct a positive narrative of their tribal history as victims of the European invaders.

Now the Smithsonian bravely has reopened a subject that you might find shocking – the enslavement of blacks by the native Americans.

Non-Indians like Ward Churchill and Elizabeth Warren who spin the narrative of the spiritual purity of the first migrants into the Western Hemisphere have some explaining to do. Many black descendants of slaves know they have a mixed genetic makeup that includes Native American tribes. When you think of plantation owners holding slaves in the South, you probably don’t picture a Cherokee Indian standing at the front door.

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March Madness

Nothing says Spring like a long March

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How would a combined SiriusXM / Clear Channel work?

And add in Pandora…

First, it helps to know who John Malone is, since he would be making the decisions.

(The Wikipedia article is very incomplete)

John Malone’s education was in industrial and electrical engineering, and he got a PhD in the then expanding field of Operations Research. OR is based on applying mathematics to business operations rather than operating based on instinct. The concepts of OR became prominent in the United States when Robert McNamara took what he learned working in the Air Force in World War II and applying it to the Whiz Kids at Ford. Decisions are based on data and mathematics. This is roughly what today I call “management by Spreadsheet”

Malone initially worked for Bell Labs, then for 23 years worked for and ran the Jerrold division of General Instruments. Jerrold was founded by former Pennsylvania Governor Milton Shapp – the company pioneered making cable TV gear. He then moved to run TCI, the cable TV company. He acquired a large stake in News Corp as a result, a stake big enough that Rupert Murdoch thought he would lose control of his company – and gave Malone control of DirecTV so he would go away.

TCI was acquired by AT&T in 1999, and Malone’s investment in Sprint had to be divested. At that point Malone’s Liberty Media had about $5.5 billion in cash to go “buy stuff” and was merged into AT&T. Liberty Media was spun back off from AT&T in 2001.

In 2009, Malone’s company bailed out SiriusXM, which was facing bankruptcy due to overspending on talent (see: Howard Stern) and its entanglement with Clear Channel, which had been a cofounder of XM, that had been merged into Sirius. Under Malone’s control, Sirius Founder Mel Karmazin was forced out, and Clear Channel sold its interest in XM – freeing up the Clear Channel channels. As of the end of 2017, SiriusXM has over 32 million subscribers, of which 27 million are paying subscribers. That is up from about 18 million in 2009.

SiriusXM carries the legacy of the two incompatible technologies from Sirius and XM. It would seem an obvious possibility to convert the XM Satellite license to carry the iHeartRadio content as a paid subscription service. After moving the terrestrial users to IHeart Satellite Radio, the terrestrial radio business becomes expendable. I could see the stations spun off and the behemoth collection of stations sold off piecemeal. K-Love would love to acquire a few dozen major market FM stations. Mexican interests and China would gladly buy up the AM stations.

There is less than a week until the lenders have to decide if they pull the plug on the proposed pre-packaged bankruptcy. If I was a betting man, I think this is going to happen. Bringing in a competent third party will break the current deadlock.

John Malone’s history is that he operates as a minority owner, not running operations himself Day to Day, but looking for ways to organize the operations more efficiently, and spin off non-core businesses. His entire career weaves in and out of deals with AT&T. He’ll figure out a way get AT&T into the Radio business.

The single biggest clue about Malone’s politics is that he previously sat on the board of directors at the libertarian Cato Institute, along with David Koch

Cato is currently run by the retired head of BB&T bank.

Malone also sits on the board of Bank of New York Mellon, which has deep pockets to invest in projects. Malone donated $250,000 to the Trump inauguration and plays golf with Rush Limbaugh.

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My pal Alexa

The Countess and I are sorting out our technology choices, and experiencing the crossfire among Amazon, Google, Microsoft and Roku, among others.

Countess has been getting comfortable with the Amazon Fire 8 HD tablet I bought last year. It is lighter than her laptop and the batteries last much longer. However, it lives outside the Apple iFortress.

We were “that close” to ordering an Amazon Echo – as the app on the device seemed to be doing most things she wanted it to do. “Play Mack the Knife” and it started playing, listen to WFAE and it started up in the Tunein App. Then we pushed a little harder – only then realizing that Alexa was playing only 30 second clips of songs, that only unlock with the Music unlimited account. It wasn’t the issue of paying for music as much as the deception that bothered me.

Then we learned just how bad the integration with Tunein and iHeartRadio is. Others have pointed out how inaccurate, incomplete and unreliable Tunein is – something I avoided commenting on while I was nominally a competitor. Asking iHeartRadio to play classic country music just gave me a classic soul station. There was nothing in the iHeartRadio Android app to even tell me the call sign or a link to visit the station website it had selected.

I have the impression that newer cars come with this junk loaded into the entertainment console. Some people probably wish their old 8 track player had Bluetooth capability…

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Billy Graham dead at 99

Just last week, on our way to the Carolinas Aviation Museum, we made a brief detour to visit the Billy Graham library, on the Billy Graham Parkway, about half way between Uptown and the airport, in a largely undeveloped area. On some lists, this is the top attraction for visitors.

We had a lengthy conversation with the affable security guard at the front gate. He mentioned that Mrs Graham is buried on the property, and they have the location for Mr Graham prepared for “when he passes”. Little did we know how soon that would be.

My mother was leary of television preachers, but she made an exception for Billy Graham. I think she especially enjoyed George Beverly Shea. I have a memory of her going to Forbes Field in the 1960s by herself to attend a Crusade.

Billy Graham never considered himself a competitor to established churches, but rather the shepherd leading the sheep to the door.

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Visiting CLT

This got busy enough that I’m going to drag the comments here, I hope

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The Clear Channel bankruptcy plan

As pointed to be Tom Taylor’s news letter:

SEC Filing

This is proposed pre-packaged bankruptcy. In a Chapter 11 bankruptcy, normally there is an entity called the “Debtor in possession”. The DIP agrees to put up the money to keep the company running while the bankruptcy process is negotiated.

In return for putting up their short term loans and priority debt, for $5.55 billion, that group will get all of Clear Channel’s assets, including the outdoor advertising business and transit advertising in Europe. They will get about 95% of the “New” Clear Channel stock.

The junior debt holders will get $200 million in debt, 5% of the new stock, and warrants that would be valuable if/when the new iHeart stock takes off.

The reality is that iHeart is cash flow positive if the interest on the debt is not paid. The DIP is mainly a formality to manage the process.

I am not a bankruptcy attorney, so do not take any of the above as advice. It is not certain this will be the actual plan until it goes to a judge, but the SEC being informed suggests this will really happen.

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Website Status

Most blog readers (all ~6 of you) know that about six months ago, I turned off the streaming radio guide that is the progeny of The amount of work was excessive and incompatible with the obligations of being a husband.

About two weeks ago, one of the surviving streaming companies (hosting around 1,200 stations) approached me about “taking over” the website. It was a very preliminary exchange, and I indicated I needed to discuss it with my wife (Countess). I have explored both the option of letting the site be acquired or bringing it back in some limited form. Neither discussion was fruitful.

The observant amoung you may have noticed the absence of the Countess here. She has been fully occupied with things that are apparently more important than the Radio directory or the blog. Her support is necessary in any decision I make.

Perhaps she will give me a stronger opinion soon, but it is safe to assume that change is in the air…

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February Thread

The days get longer as the month gets shorter

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