Radio Owner Profile – Clear Channel

Nothing in this or any of the station owner profiles should be construed as investing advice.   They are here to provide information to get better understanding of who own’s America’s Radio stations, and how they may be affected by the Global Economy problems in 2008/9.

Any way you look at it, Clear Channel is the 900 pound gorilla of Radio.  It is by far the largest radio company in America.  It spent 4 years eating up every radio station in sight, and now has a horrible case of indigestion.

Clear Channel’s privatization transaction may well have been the wakeup call that started pushing over the dominoes in 2008.  To pull off the privatization transaction, they needed to borrow $20 billion at a time when radio station licenses values were starting to implode.  Only threats of lawsuits get the deal finally done.  Had the deal failed to close, the damage would have been even faster and more damaging.

The company that is left shed its TV stations, got rid of about 400 small market radio stations, fired most of its local programming and sales staff, and is now begging the banks not to pull the plug on them completely.   They have owner’s “equity” of negative $3 billion, and $18 billion in debt.  They are still holding $6 billion in “intangible goodwill” on their books for what they probably overpaid during the acquisition/merger binge from 1996-2000.

The only thing really propping up the balance sheet at all is the hard assets of the outdoor advertising business (when you walk through airports, those signs in the halls are probably Clear Channel Outdoor signs, as well as ads on bus stop seats, train stations in Europe, etc…).   CC Outdoors is currently building a network of bus and trolley shelters with solar powered signs for the City of San Francisco.  So there is still Hope.

It’s hard to imagine that Tim Geithner is not directly involved in coming up with the solution for Clear Channel’s Toxic Debt once he has “fixed” GM.   Did I mention Clear Channel owns Rush Limbaugh’s contract?

The company profile is available [here].  The profile was “finished” a couple weeks ago, but I was holding off announcing it until I finished the other big ones in case I had the story wrong, but it all looks pretty solid now.

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