Archive for the ‘IHeart Media’ Category

“Going concern” warning expected for IheartMedia

Saturday, April 22nd, 2017

Marketwatch Story

In the accounting business, one of the obligations of auditors is to evaluate whether the business has the resources and income to sustain itself as a business in the future. When the auditor feels the obligation to issue a going concern warning, things are in bad shape.

This warning may be less that anything has changed at iHeart Media (formerly Clear Channel), but rather the standards have changed. In 2014, the Financial Accounting Standards Board (FASB), the non-governmental organization (NGO) that sets the standards upon which audits are based, added a requirement that companies include a going concern statement in quarterly reports. This change was to make US standards more consistent with international norms.

FASB rule change

Sears was the first big company to issue a quarterly going concern warning

Explanation

The fundamental principle of accounting is that a business is a going concern and will continue to operate in the future. If not, the assets of the company in a forced liquidation are likely worth a lot less.

In the case of iheart, the vast majority of the assets are “intangible”, meaning they have no physical presence – real estate, buildings, furniture, transmitters, vehicles, etc. What iheart owns is permission from the FCC to operate radio stations and the resulting income streams. $4 billion in assets is “goodwill”, which is essentially that Clear Channel overpaid during the bidding war in the late 1990s with the idea that the existing business relationships with advertisers will drive future income even in the absence of a tangible asset like a long term contract.

In the event of a forced sale, there is no other radio company that has the resources or legal ability to absorb 800 radio stations. The FCC has been expressing interest in relaxing the rule to permit foreign owners to own US radio stations.

Iheart also owns most of Clear Channel Outdoors, the billboard company, which does have substantial physical assets – but the parent has loaded up CCOH with debt and transferred the proceeds to the parent to avoid being crushed by the $20 billion in long term debt still outstanding from the 2009 transaction that made Clear Channel into a private company. CCOH has $5 billion in long term debt, resulting in a negative owner’s equity of close to a negative $1 billion. Close to $2 billion of their assets are intangible and close to another $billion is IOUs owed by iHeart

Clear Channel Outdoors 10-K annual statement

“Owners” of iheartmedia common stock have a negative owners equity of almost $11 billion, close to -$100 per share, of which 2/3 is held by the two private equity firms that put together the original deal. As of Friday, IHRT stock closed at $2.75 a share, and IHRT had a loss per share of more than $3 a share. I have no idea what people think they are buying.

Iheartmedia 10-K

In December, the so-called “board of directors” (controlled by the two PE firms) authorized 400 million shares a new non-voting class D common stock and 250 million shares of “blank check” preferred stock, without any limitations (interest rate, convertibility, priority over other owners, etc). Since an IPO seems unlikely, the logical reason one might do that is preparation for a debt for equity swap as part of a financial reorganization. Without the $1.8 billion in interest expense, the Preferred stock equity might be worth something. But the people owning the current class A common stock are along for the ride – the board of directors is not there to protect them.

Variety Magazine: Bob Pittman may not be able to save iHeart

Friday, March 3rd, 2017

Time is running out for iHeart / Clear Channel and Cumulus

iHeartMedia CEO Bob Pittman’s Efforts May Not Be Enough to Avoid Looming Bankruptcy

I await the rebirth of radio patiently. It may well just return to dust, but the patient is very sick.

Meghan McCain gets shown the door

Thursday, February 2nd, 2017

Countess spotted this before I did. Maybe I can add her to the staff as a hard news reporter. If I teach her how to use Google News, this could become a “go to” radio news site

So Meghan signed on with Premiere Radio, Clear Channel’s talk radio subsidiary. It was clear from the first hour, she had no interest other than providing free nationwide advertising to promote her father’s political agenda. She had replaced the forgettable America Now with Andy Dean.

When Andy Dean left, a lot of radio stations switched to carry Joe Pags.

She was let go immediately and Brian Suits is filling in temporarily. The permanent host is Buck Sexton, a member of the next generation that needs to be in place when Rush retires. Countess has made some observations and maybe can fill in some of the background.

The show seems very much in flux – JerseyDevil’s observation suggests to me that Premiere wants to retain a trademark on “America Now” without actively using it. The old web site is dead.

Another Progressive Talker throws in the towel

Monday, November 28th, 2016

WXXM-FM in Sun Prairie WISCONSIN (Madison) is switching to Classic Hits.

http://themic921.iheart.com/

Madison Wisconsin plans to secede from the United States and join Canada according to my Russian puppet masters.

IHeart loses $279 million in second quarter

Thursday, August 4th, 2016

That’s a rate that would be over a billion a year, enough to pay for a 9 mile Light Rail extension

http://www.mysanantonio.com/business/local/articleComments/IHeartMedia-s-second-quarter-loss-widens-to-9121976.php

IHeart just filed lawsuits against the lenders who tried to prevent paying off bonds held by one of iHeart’s board members.

Alex Jones has arrived

Friday, July 22nd, 2016

https://youtu.be/aG86XtPkJTY

The bigger world is starting to know who Alex Jones is. The Republican nominee knows who he is and doors are opening.

On Thursday’s show, he did most of an hour with Milo with a very warm and interesting conversation about a variety of topics. They talked about the Hillary for Prison meme, which did break out as a chant in the Convention.

Later in the show, he played the interview his staff did with Nigel Farage, the man who caused Brexit as leader of the U.K. independent Party (UKIP). Alex had dinner with Nigel and Roger Stone.

The incident where Alex Jones pushed back on the Communist demonstrators who were getting ready to burn an American flag brought him face to face with the Cleveland police chief who he initially shoved not realizing who was trying to restrain him. Not only did Alex not get in trouble, he found out that he was well known by the Cleveland police in a positive way.

Rush Limbaugh may have signaled trouble in radio paradise on his show on Monday. He is undergoing negotiations with Premiere to extend his existing contract which is running out. Alex believes Rush is going to lose his show and it is part of the same movement of Hillary’s people that just got Roger Ailes kicked out of Fox News. Since Fox went wall to wall anti-Trump, people are tuning out in droves. Rush said something like “I is willing to end my radio career if it meant that it would defeat Hillary”. A bit cryptic…

The “real” media started seeking out Jones. He knows why they are suddenly behaving friendly toward him and avoided them for the most part. As the real media are realizing that Trump is aware of and influenced by Alex Jones, they see Alex Jones as a way to “get to” Donald Trump, given Jones’ controversial views.

Alex Jones will be in Philadelphia next week. The Bernie supporters may well buy lots of the Hillary for Prison 2016 T-Shirts.

Rushing Home

Tuesday, June 21st, 2016

Has it been 8 years already? Tom Taylor reminds the radio world that Rush’s 8 year, $200 million contract with Premiere Radio (iHeart/Clear Channel) ends in the next few weeks, as the company is fending off lawsuits trying to pull the company into bankruptcy or reorganization of its debt.

Rush and Glenn Beck have similar but different deals. Both produce their own shows in their own studio paying their own staff. When it comes to the Internet, Beck owns his web site and archives and the related revenue streams. For Rush, Premiere owns RushLimbaugh.com, 24×7 Rush and the Merchandising. Some portion of that revenue goes to Rush, probably as an offset to his salary or maybe with triggers for incentives. Those kinds of details are not public.

One idea apparently being floated is to turn over the intellectual property to Rush in exchange for Rush taking less money. That makes sense – if iHeart does get dragged into a financial quagmire, if Rush owns his entire product, that keeps it away from creditors.

In my far out speculation, I could see iHeart spinning off Premiere to a third party. There was a time when Premiere might have been a hot standalone IPO, but I think that time has come and gone. Rush is pushing retirement age, Glenn Beck is getting tenuous, Bob & Tom have no Bob, Kidd Kraddick is dead, Fox Sports Radio lingers on, Sean Hannity is busy counting the days until we take the country back and George Noory is busy chasing his Shadow. I don’t see anything there global bankers want to buy.

Today is iHeart drop dead day

Monday, May 16th, 2016

It’s May 16th today – the day the trial starts on whether or not iHeart / Clear Channel is in default. The Texas state judge gave iHeart and the lenders time to negotiate the differences so she doesn’t have to be involved.

The rumblings via Tom Taylor’s newsletter is the lenders want to review the company’s finances and the company has said no. Even if the judge is sympathetic to the business, that attitude is hard to ignore.

Stay Tuned

iHeart’s time is up

Wednesday, April 6th, 2016

A month ago, creditors filed a notice of default for allegedly violating the terms of the loan agreements. A friendly judge in Texas gave iHeart 15 days to resolve the issue, and another 15 day extension. iHeart broke off negotiations and has not satisfied the creditor concerns.

That means the 60 day countdown to default has started. If this isn’t resolved, $12 billion will become immediately due, which will trigger the other $10 billion to also become in default.

Chicago Tribune coverage

The clock is ticking. Meanwhile CBS is moving forward with the idea of doing an IPO to spin off CBS Radio to shareholders.

KGOne

Friday, April 1st, 2016

This morning’s mailbag contained the news that KGO-AM has killed their entire lineup.

KGO is located in San Francisco and used to be a “progressive” talk station, long before Air America. One of its most famous alumni is Bernie Ward, a former Catholic priest. He went to prison on charges of distributing child pornography. He was released in 2014.

After Cumulus took over KGO, they dumped all of the liberal hosts except Ron Owens and switched to a mostly news format, which is very expensive and the ratings didn’t cover the cost.

Owens is moving to Conservative talker KSFO – Tom Taylor’s newsletter says he is replacing Mark Levin, but Owens this morning says he is replacing Glenn Beck.

Morning drive is picking up Armstrong and Getty, which is carried on several iHeart (Clear Channel) stations in California. I’m not yet clear if Armstrong & Getty are joining Cumulus on their network or just KGO.

A factor in this decision may be the lopsided politics in California. The Presidential race could by Godzilla vs Jesus and nobody is going to buy political ads in California, since the Democrat is going to win.