Radio Owner – Entravision

Nothing in this document or the web site should be construed as investment advice. It is intended to familiarize visitors with the companies that own radio stations in the United States and their situation as regarding the 2008/9 global economic problems.

Entravision is the stepchild of Univision.    Two former Univision employees created Entravision with money invested by Univision.  They mostly bought up TV stations  in smaller media markets with a significant Spanish language populations, mostly along the states on the Mexican border (and a few in New England).

Their story is pretty similar to all the other big TV/radio owners in trouble.  They were created in 1996 in anticipation of the FCC relaxing ownership limits, did an IPO in 2000 (a bit too late) and borrowed money to buy up TV and radio stations at unrealistically high prices.  They went on a buying spree (including buying up a network of radio stations) at the peak just before the Clinton era bubble started to burst in late 2000.  It’s been a steady ride downhill from there.

Unlike some of the others, their income stream is not profitable enough to have attracted the Private Equity buyout guys – so their LIBOR based debt (now down to about $400 million) is only completely crushing them rather than the worse alternatives.

In late 2008, there were forced to start doing things to avoid default on their credit facility, and in March 2009 the banks agreed to even worse terms for the company – but the changes prevented technical default – massive cost cutting, a much higher interest rate, and agreement that 75% of the cash flow will go into paying down the debt.  They won’t be buying any new TV or radio stations any time soon.    Univision retains a 10% ownership interest in Entravision, but has written off most of its investment.

If you’re keeping track of which radio companies will be in serious trouble when/if GM declares bankruptcy, this one needs to be on your list.

The company profile can be viewed [here].

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