Regent Communications digs a deeper hole. Regent told the SEC they missed a year end payment and have not made a required payment on an interest rate swap that is required by their banks and not paid about $1 million in professional fees (probably accountants and lawyers) related to renegotiating their debt.
Regent was a 9 out of 10 on my internal list of who is going to fail next… The only thing in their favor is their list of rust belt stations are so depressed that nobody wants to acquire them. My instincts are they might even go right to Chapter 7 with nobody willing to fund Debtor in Possession (DIP) financing to try to save something.
Looking over their 10-Q in September, because their auditor forced their credit facility into default, the company has lost access to their revolving credit facility and has to pay its bills all from cash on hand, which really puts them in a vulnerable position. They had about $6 million on hand having stopped paying the banks. Bank of America possibly is not all that interested in trying to run radio stations in Michigan and Buffalo
Ah, Regent. I remember when they bought into the Buffalo market (taking the stations off CBS’s hands). $125M for a cluster of 4 FMs and one AM. They spun off the AM station for a mere $2M. That’s about $31M per FM station.
Regent’s lucky– the Buffalo stations are some of the most popular stations in the market (all four are in the top 10 stations according to Arbitron, even on-the-cheap Jack station WBUF). However, I don’t care how highly rated those stations are, they’re not worth $31M. Part of the problem is that the benchmark for FM had been set about four years prior when WNSA (107.7, a rimshotter that was all-sports at the time) got bought from Adelphia for $10M– by WNSA’s rival, just to get it off the air. (That signal runs classic alternative right now as WLKK.) The other part is that on the other side of the border, Canada’s been trying to squeeze signals in on the Regent stations’ frequencies, cutting off the Toronto audience that a lot of these stations had.
For perspective… the going rate for FM stations just to the south, in the Twin Tiers/Olean market, is a mere $300,000. AMs run about $100,000. Did Regent overpay a bit much? I’d definitely say so.