Townsquare Media to “go public”

Townsquare Media is owned by Private equity firm Oaktree Capital. After Clear Channel went public, many of the small market stations were sold off because they were not economically viable.

Over the years, Townsquare bought up a lot of other radio stations from bankruptcy sales – mostly in the “rust belt” around the Great Lakes. The concept seems to be like if you take string and wrap it up in a ball, if you get enough string it will become valuable.

According to their SEC filing, they own 312 stations and had $279 million of revenue. The company made a net profit in 2013 of $10 million

However, the finances radically changed as Oaktree (not Townsquare) unloaded Westwood One / Dial Global onto Cumulus in exchange for a bunch of similar small market stations. Townsquare added $285 million in new debt which hasn’t yet fully been reflected into the overall results.

SEC filings

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10 Responses to Townsquare Media to “go public”

  1. Nidster says:

    Well their financial situation can best be explained in the words of Scooby-Doo:

    “Ruh-Roh”

    • Art Stone says:

      Probably mentioned this before, but my analysis of radio station owners about 10 years ago opened my eyes. Even though I was working “on the inside”, I was unaware how the vultures had destroyed the “American Capitalism” I thought I supported.

      This “IPO” is completely “normal”. The PE firm will be selling only a small portion of the company. If you buy stock, you get 1 vote per class A share. The Class B shares get 10 votes per share. In theory, the vultures could only own 10% of the company but still control it. The class C shares have ownership but no voting rights – probably non-US entities that are not allowed to own US radio stations. By having a proxy manager and only being passive investors [uh-huh], their ownership interest stays non-public.

      With the IPO company being controlled by its parent, the real owners can loot it, load it up with debt, run it through bankruptcy and strip the Class A stockholders of their entire investment, then just do it again in a few years when a new croup of pigeons show up

      • Nidster says:

        So, is Goldman Sachs involved in this type of thievery, since it seems to fit their MO?

        • Art Stone says:

          Just to emphasize the point, this is not any one underwriter – this has become the defacto standard of what an IPO is

          In this specific case, the underwriters listed on the S1 form (link up above) are

          BofA Merrill Lynch
          Jefferies
          RBC Capital Markets
          (Royal Bank of Canada)
          Guggenheim Securities
          Macquarie Capital
          (Australia)

          ​The filing lists an address in Greenwich CT, I suspect GE Capital is indirectly involved.

          Keep in mind that even the American companies are lending money they got somewhere else. Blobs of Private Equity have no owner, carries no national identity and has no allegiance to any religion or form of government.

        • Art Stone says:

          The Townsquare HQ address on the filing is the local Bank of America branch in Greenwich.Townsquare HQ

      • CC1s121LrBGT says:

        I haven’t looked into it in great detail, but that seems to be the business model of airlines over the last few decades.

        The financial industry did much of the same, then they create new shares hand hand them to employees, diluting the earnings per share of the general public.

        The biggest one is to get on TV and talk your book- say what a great company you found after you bought it and then as the public buys and raised the price, you sell your shares to them.

        Honestly, this is probably the best book ever written on the subject. It is fictional biography based on fact and truly timeless. It should be a must read for everyone before graduating high school.

        http://www.amazon.com/Reminiscences-Stock-Operator-Edwin-Lef%C3%A8vre/product-reviews/0471770884/ref=cm_cr_dp_qt_hist_five?ie=UTF8&filterBy=addFiveStar&showViewpoints=0

        • Art Stone says:

          Part of this is also Congresionl meddling. The Dems are obsessed with CEOs making “too much money” – so laws that limit compensation that isn’t tied to performance caused companies to look to more creative ways to reward their management

          • CC1s121LrBGT says:

            Yes. And their push to limit executive salaries to a multiple of the company’s lowest paid employee had resulting in the outsourcing of the low skilled jobs to eliminate low paid employees.

            That outsourcing is often overseas where the wages are lower, but also often to US firms with shorter term contracts so that as their contract employees earn a pay raise over time, their employer loses the contract to a competitor that hires the same employees but at starting-over pay rates. Keep voting for those Democrats! lol

  2. Art Stone says:

    A little side note – you may find that Townsquare’s stations are somewhat unmaintained here. There is a reason for that – they made serious legal threats against the author of ooTunes to cause him to remove the stations from the iPhone/Pad app. Since I said as of a few years ago, that ooTunes is my primary schedule testing tool (no prestream ads), that prevents me from efficiently testing their stations, so I don’t

    If you look over their web site, Townsquare is also playing in SEO optimization (will 312 radio stations pointing at you improve google results?) and “reputation management” (drowning out criticism of a service or product with paid “noise”)

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