Cox Radio (Website) is a publicly traded (NYSE: CXR) corporation (at least for now) that owns 15 AM and 71 FM radio stations, mostly in the Southern United Stations. Cox also plays a minor role in syndication of radio programming, producing the shows of Neal Boortz and Clark Howard, who are distributed through Dial Global (formerly Mother Jones Radio). As of the end of 2008, Cox Radio had 1,375 full time and 651 part time employees. The company is headquartered in Atlanta, Georgia.
Cox’s radio heritage originates with 1920 Democratic Party Presidential candidate James Cox. Mr. Cox lost the 1920 election to Warren G Harding (FDR was Cox’s VP candidate). Mr Cox was the owner of the Dayton Evening News at the time. In 1934 (during the Great Depression), Mr Cox started radio station WHIO in Dayton, Ohio. in 1939 (still during the Depression), Cox acquired the Atlanta Journal newspaper, which owned WSB, a 50 kw clear channel AM station located in Atlanta, Georgia. [makes you wonder if his political connections with FDR paid off, doesn’t it?] In 1964, the Cox Communications (TV, Newspaper, Radio) began trading on the New York Stock Exchange. In 1996, when the FCC national ownership cap was removed, Cox Radio was spun off from Cox Communications and began the process of acquiring Radio Stations. While Cox Radio is publicly traded (currently), the parent Cox Enterprises (the ultimate parent ownede by the Cox family) has almost complete voting control of the company. In 2004 (following the passage of Sarbane Oxley), Cox Enterprises privatized Cox Communications and repurchased the publicly traded portion of the company. In October 2008, Cox Enterprises began a process of buying back the publicly traded portion of the Cox Radio. In 2008, the company spent $108 million on repurchasing Class A stock. As of May 2009, Cox Radio is trying to buy back the final publicly traded shares via a tender offer and return to being a privately held company (and not be subject to Sarbane Oxley). Parent company Cox Enterprises owns newspapers and TV stations, but they will not be discussed in this radio owner profile.
Major Stations – top 25 markets
- WSB-AM (News/Talk) *Flagship*
- WSB-FM (AC Music)
- WALR-FM (Urban AC)
- WBTS-FM (Rhythmic Contemporary Hits)
- WSRV-FM (Classic Hits)
- KHTC-FM (Classic Hits)
- KKBQ-FM (Country)
- KTHT-FM (Country Legends)
- KHPT-FM (80s)
Cox Enterprises owns 77% of Cox Radio’s stock (Class B), and controls 97% of its votes. Class A stock stock has 1 vote per share. As of end of 2008, there were approximately 21 million shares outstanding. Class B stock has 10 votes per share. The Class B stock is 100% owned by Cox Media Group, a subsidiary of Cox Enterprises. There were about 58 million shares of Class B Stock (or 580 million votes) outstanding.
The President and CEO of Cox Radio is Robert F. Neil. Mr Neil is a “radio guy”, not a bean counter. From 1983 to 1986, he held various radio jobs. In 1986, he joined Cox as General Manager of WSB. In 1992, he became Executive Vice President of Cox Broadcasting and in 1996 became the CEO and President of the newly created Cox Radio. Marc. W. Morgan is the Chief Operating Officer (COO) of Cox Radio. He is also a “radio guy”. He became the General Manager of WSB in 1992, replacing Mr Neil.
(most current report as of May 2009) 84.5% of the publicly traded Class A stock is held by Institution investors. Since the stock price has fallen below $5/share, many institutional investors are prohibited from investing in the stock.
|Class A Owner||Location||Approx# Shares|
|Buckhead Capital Mgmt||2.6 million|
|Dimensional Fund||2.5 million|
|Towerview LLC||1.1 million|
|Barclays Global Investments||1.1 million|
|Foyston, Gordon and Payne||Toronto, Canada||696,000|
|State Street||Boston, MA||469,000|
Financial Condition as of 2008 (10-K)
Key Balance Sheet Items: (2008) Total Assets: $1,292 Million ($1.292 Billion)
- Value of Radio Station licenses: $928 Million
- Goodwill and other intangible Assets: $190 Million
- Cash: $603,000 – Cox Radio essentially has no cash. It sends all the cash to its parent company, which pays its bills.
- Accounts Receivable: $73 Million (64 days of revenue)
- Land, Buildings, Equipment (net) $72.56 Million
- Current Liabilities: $37 million
- Long Term Debt: $400 Million
Stockholder Equity: $646 Million
The company has a $600 million credit facility (which included $8.7 million participation from the now bankrupt Lehman Brothers investment bank). At the end of 2008, the company had $400 million outstanding on the credit facility. (By March 31, 2009, the balance is down to $380 million) The interest rate (at the option of Cox) is Prime + 0.5%, LIBOR+ (based on the credit rating) or Fed Funds + (based on Credit Rating). As of the end of the year, the floating interest rate on the balance was 1.8%.
The company had one LIBOR/Fixed interest rate swap instrument for $25 million value that expired in September 2007 and was not replaced. The entire $400 million credit facility is completely unhedged against future increases in LIBOR, so each 1% increase in LIBOR would cost at least an additional $4 million/year in interest expense.
|All figures in $million||2008||2007||2006||2005||2004|
(with no impairment)
|Debt Service Cost||13.7||21.1||25.3||27.4||30.4|
- 2008: $
Net Operating Profit/(Loss)
- 2007: $25
- 2008: ($627) [Including the $749M impairment charge]
10 years ago (May 1999), Cox Radio (NASDAQ: CXR) was trading at approximately $17/share. The stock hits its peak at $35.67 on December 29, 1999. Over the years, the stock drifted down to about $10 a share, and fell to about $5/share during the September 2008 financial market collapse. As of May 15th 2009, the stock closed at $4.75 a share, reflecting the price range of the tender offer to end public trading of the stock. If you had invested in CXR in May of 1999, your 10 year price return was a loss of 72%. If you bought the stock at its peak, your loss has been 86%. Nothing in this document should be construed as financial or stock investing advice.