Some of you know I used to work for NASDAQ. What Dial Global did is pretty odd – they voluntarily are going to delist themselves from NASDAQ. Normally when companies are falling apart, they fight to try to stay listed.
Dial Global has a syndication business – music, sports (NCAA, NFL) and talk (Neal Boortz, Clark Howard, Dennis Miller and most of the Progressive talkers), News (Dirk Van, Jim Bohannon) and is starting up the NBC Sports radio Network. Other than Talk Radio Network, they are the only other significant radio syndicator that doesn’t own their own stations.
DIAL had to take an impairment charge of over $60 million dollars in addition to losing about $10 million from its ongoing operations (after interest expense). None of that is good news if you care about radio.
With the news of delisting, Dial Global stock lost 77% on Friday, and finished at $.37 today on extremely heavy volume. Last one out the door pays for Obamacare.
Wikipedia reminds me that in August, Talk Radio Network filed a lawsuit against Dial Global, charging them with steering stations to Dial Global products instead of representing TRN at an arm’s length – Dial Global was actually handling station relations for TRN. Perhaps this is related.
So, if TRN is looking to squeeze money out of Dial Global what are the odds that Dial Global has no money, and instead just ends up in bankruptcy?
My reliable source suggests that is probable. Almost everyone in the radio business who got into the bidding wars around 1999 has wound up in bankruptcy or the more polite “financial restructuring”
Dial Global is one of the business ventures of Oaktree Capital, along with some folks named the Gores Group – the Gore Group tried to save Westeood One, and that’s why they have a stake in the merged company.
If you like accounting, here is the scoop
http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0000771950%2D12%2D000036%2Etxt&FilePath=%5C2012%5C11%5C15%5C&CoName=DIAL+GLOBAL%2C+INC%2E+%2FDE%2F&FormType=10%2DQ&RcvdDate=11%2F15%2F2012&pdf=
It doesn’t take long to notice they moved $240 million from long term debt to current liabilities. That’s a marker they broke the terms of that debt and the lender can now force the company into receivership. Their 10-Q includes a “going concern” warning – which says they could be out of business as soon as December 14th. They are, in part, blaming Rush Limbaugh (who they don’t syndicate) for their failure due to a general boycott of talk radio by national advertisers.
The $68 million write down of their investments brings the equity ownership of the stockholders to -$14 million, which is essentially defacto bankruptcy.
Rush Limbaugh is also partly responsible for the sudden surge in the # of stations going to a sports format, which occurred suspiciously soon after Rush announced he just was not all that interested in pro football any longer and stopped talking about pro football.
So you’re saying they went with Rush’s head fake?
Yeah, the man is crafty.
Rumors are that he shorted Dial Global stock and is raking in lots of dough, plus he is cutting the competition off-at-the-knees.
You can’t short stocks under $5 a share.
I do get some pleasure from the idea that Mike Malloy will be unemployed and when he looks around to find the sonsabitches that killed his job, he’ll realize he did.
I hope Neal Boortz has his retirement funds in his own accounts and not assets of Dial Global
Following on your “we loves sports”TM theme Art — I have noticed recently on the Jim Bohannon Show that he now devotes several minutes at the end of his show promoting the upcoming Dial Global sports schedule (“over most of these same stations”) — this week including 3 big games of the NFL on that day that we set aside to eat turkey while watching football.
Maybe I am reading into it, but Jimbo sounds less than enthused about promoting sports — he sounds like he is just reading a cue card and closes with a less than enthusiastic “Dial Global, proud to be a leader in sports broadcasting” or some such drivel.
Also, I have noticed something interesting by listening to Jimbo directly from his website — for one thing there are far fewer commercials and they often play classical music during the breaks — however the one national spot that plays over and over again is for a breath mint that ‘enhances’ a man’s pleasure when used by his lady. I’m sure Jimbo is proud to have this product be his (apparently) national sponsor. Pretty much shows the state of the radio business.
Unfortunately, I think Jimbo’s life is going to change soon. He!s a workaholic. He does the nightly show (10 PM – 1AM ET) then starts preparing for the 5 AM America In the Morning show. I don’t remember him taking a vacation. He’s been doing the show since Larry King left radio in 1993. He is 68 years old.
Dial Global had two competing morning shows, which is a little odd – Dirk Van has FirstLight doing almost the same show at the same time. The reason is first Light was originally an NBC Radio show until GE sold NBC Radio to Westwood One. That show was protecting the NBC Radio trademark and continued to sign off the show saying it was an NBC Radio production. Jimbo used to be the Westwood One competitor. He also used to do Westwood One Week in Review, but that might be defunct.
“You can’t short stocks under $5 a share.”
With all due respect, there are many things, perhaps too many things, that go against what is allowed, but we have come to the point in history where it is more like “Rule by Proclamation” instead of “Rule by Law”.
Dig-in to what happened to the investor deposits in the failed MF Global. Just be happy you were not among those who deposited the money into a so-called, well protected account.
The reason for that rule is that if people could short penny stocks, pump and dump schemes would fall apart. Did that sound cynical?
Yep, just a tad bit cynical. I guess we’re part of the ‘In Crowd’ these days.
Good Lord!!! I’m giving away my age since I just remembered, that was a hit song by The Momas and The Papas.