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