Radio and Private Equity: I've fallen and I can't get up.

The vibes the private equity firms are giving off are anything but good for Clear Channel. Radio’s fallen – and it can’t get up.

Expect Mark Mays to be summoned to the barber chair where reps from BainCapital and Thomas H. Lee will be waiting, straight-razors in hands, to give the number one son a haircut and a shave that’ll forever be ingrained in the annals of the broadcast industry.

If he wants Clear Channel go private, he’d better be ready to learn how to live without his parts.
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Markie’s learned of his haircut appointment on Tuesday following a news report by Reuters from the Super Return, a private equity conference in Munich, Germany.

That’s where Scott Sperling, co-President of Thomas H. Lee – the firm handling one-half of the $19.5 billion Clear Channel buyout deal, said, “The forces that have limited the liquidity that's available will continue to work in a negative way in certainly the next three to six months and maybe somewhat longer, and that needs to be washed out of the system." He added that any company for sale “…will look at the situation that we’ve confronted in the last year and say, 'I may need to change the terms of the deal.'” *

Don't confuse Scott with Sy. Sy puts hair on your head. Scott scalps.

Sperling also predicted that the billions of dollars in debt left by the credit crisis will freeze large leverage buyout deals.

Read between the lines.
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There’s more. Reuters reported that Credit Suisse may back out of the Clear Channel-Bain/Lee deal by pawning…er…selling a share of its loans in the deal.

Firms are walking – in some cases running – from deals and banks are backing out of commitments. That means to get a deal done private equity firms will have to depend on hedge funds and mutual funds to pull off deal loans.

Translation: It’s not their pension fund whose money they’ll be using.

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The banks jumped on these deals because they got their piece by charging outrageous financing fees. If the deals got iffy – they’d just cut and run.

But the subprime mortgage scandal has left the banks with billions of dollars in debt, which puts them out of the running for getting their beaks wet in any large leverage buyout schemes.

There’s also that other predicament no one wants to talk above a whisper about. Should the credit market continue its tumble; they’ll be concerns on whether any over-leveraged company can ride out a deep recession.

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Mark, we know it’s been a rough week. You still can’t buy a clue on the if’s or when’s your deal to unload TV stations with Providence will clear – even following that expensive 10 percent haircut now that Wachovia wants out of anything to do with Clear Channel.

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Then there’s that new Clear Channel book.

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On Wednesday, Tom Taylor’s Taylor on Radio from Radio-Info.com broke the story on Alec Foege’s forthcoming book, Right of the Dial: the Rise of Clear Channel and the Fall of Commercial Radio, which will be released on April 15.

Question: Did the Mays family refuse to be interviewed for the book?

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Answer: Yes.

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Uh-oh.

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Don’t write this off as the tome of a disgruntled Clear Channel employee. Foege’s a former contributing editor of Rolling Stone – and has also written for the New York Times, Mediaweek, AdWeek, and Fortune, among others.

In the mid nineties, Foege wrote The Empire God Built: Inside Pat Robertson’s Media Machine. That’s the one the religious right tried to create book-burning rallies around.

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So how does Clear Channel plan to combat Foege’s book?

Do their own revisionist history version. Would you expect anything less?

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They hired Reed Bunzel to rush-write a complementary book to the slavish devotion to Saints Lowry, Mark and Randy of the House of Clear Channel.

You don’t get wealthy writing a book unless you’re established on the New York Times best-seller list– and this party line piece hardly appears to be of that caliber (Foege’s, on the other hand, does) - so the question begs to be asked. How much did Mark Mays pay you to write this book? Free tip: Hope it was cash up-front.

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Reed Bunzel. Name sound familiar? If you're in the radio biz - you may have read some of his stuff.

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Here’s his dossier:

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Bunzel's an unpublished mystery writer, who worked his way into the broadcast industry trade business, holding various editorial positions at media mags, including Radio & Records and Broadcasting magazine and was, for a time, editor-in-chief of Radio Ink.

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During the nineties, Bunzel was VP of communications at the RAB and did propaganda for the National Association of Broadcasters (NAB) in both their radio and public affairs departments. He was also president of the Bunzel Media Group, which published the now-defunct Radio Finance Weekly. He also authored the report, The State of Radio 2007, which he described as “a comprehensive presentation of the ‘state of the radio industry’ the way it should be portrayed.”

Sounds like a believable fellow.

These days he’s CEO of AMS-I, a division of American Media Services, a radio brokerage firm, which “provide(s) broadcasters with expertise in such areas as streaming onto the Internet and creating Internet radio sites that offer high-quality audio.”

His book titled Clear Vision: The story of Clear Channel Communications is described as “the only corporate history that is authorized by the company, and includes exclusive interviews with top-level executives.” It’s called “….a story of vision and foresight, the willingness to take a calculated risk on the unknown, of fiscal prudence, vibrant leadership and, at times, an almost breathtaking capacity to influence the dynamics of the media marketplace,” and “....the story of the entrepreneurial spirit and business acumen of the people who have helped make Clear Channel the media giant that it is today.”

File under fiction.