Friday, March 28, 2008

Radio: Clear Channel's Wall Street shuffle


*
We now join the telephone conversation in progress…

“After all the things our father did for you and your family...,” whines Mark in a high pitched voice that could cause pain to a dog’s ears.

“We swayed…er…positioned our newscasts in your favor, Mr. President. We even banned the Dixie Chicks and Bruce Springsteen when they dared to insult your vision for America.”

“Sorry, Mark. Believe me. I feel your pain. I have eight years collapsing before me. You have only Clear Channel. Have your dad call my dad. Maybe he can help.”

Translation: Go away, kid. You bother me.

They’re calling in all the chits at the San Antonio headquarters of Clear Channel.

We can only imagine.

“Hi this is Mark” (silence) “Mark Mays” (silence) “Please don’t make me say it…Mark Mays, President and CEO of Clear Channel.” (click!)

You’re Mark Mays and your new wake up time is 3 AM.

Yesterday morning, you orchestrated the press release blast, which told how your family friend (that part omitted) and Texas Judge John Gabriel issued a temporary restraining order against the banks that were backing out of your buyout deal with BainCapital and Thomas H. Lee. The order read that the banks involved would have to complete the deal based on terms consistent with their commitment letter.

“Unusual.” That’s what Lawrence A. Hamermesh, a professor of corporate law at Windener University of Law in Delaware called Judge Gabriel’s action. As a rule, a judge doesn’t issue a restraining order prior to holding a hearing to discuss a case.

So we’re sitting here in limbo until Tuesday, April 8 – the date of a hearing to determine whether this temporary restraining order should be graduated to a temporary injunction.

Translation: Only the lawyers are getting rich on this deal.

You’re Mark Mays and how about the call you got while working damage control.

“Mark, today’s Wall Street Journal. Front page. Above the fold: Clear Channel Warns Its Deal May Not Close.

That’s the front page of the most-read front page in the world. It’s the first headline that most decision makers read in the morning.

My favorite line in today's Journal: If it doesn't go private, Clear Channel will be relying on disgruntled employees to help drive growth in a tough economic climate.

Don’t fret over that front page story, Mark. By Monday, most will be wrapping their garbage in it.

What was that famous line your father was fond of?

"We are not in the business of providing news and information; we’re simply in the business of selling our customers' products."

You weren’t even that.

Don’t think that mentioning your outdoor business instead of radio makes Clear Channel look better. How many unsold boards are you stuck with right now? And what do your projections look like? Thought so.

Even if you manage to pull off a miracle and call in enough chits and peddle enough influence to get you out of this mess, the name Clear Channel will always bring to mind tarnished goods and damaged merchandise.

From Barneys to Big Lots.

How does it feel to want?

It’s like that depression era song by Bessie Smith that was number one seventy-eight years ago today: "Nobody knows you when you’re down and out.”

Remember those good ol’ days when you were buying up everything – whether you needed it or not? There was Katz, Premiere, AgriBroadcast, FoxSports, Inside Radio, Duncan, program and marketing consultants, concert promoters, and venues – and the list goes on. You were forced to sell off the concert business when you tanked it and you stop publishing Duncan when radio billing started going south.

Bet you never thought you’d read the word collapse in the same sentence as Clear Channel back in the days when you convinced yourself the party would never end.

You were what Larry Flynt was in the seventies.

Peter Guber and Jon Peters in the eighties.

Dieter Zetsche in the nineties.

Gerald Levin in 2000.

Buy it now and figure out what to do with it later.

Sure, you got conned by one of the best in the business…but now Randy’s hanging out with Sam Zell and calling the trades to spread rumors that he and Sam may pick through the pieces of Clear Channel just to bust your balls.

And you can’t blame him for taking advantage of you.

This Clear Channel collapse isn’t all bad news. In the weeks and months to come as Clear Channel properties are parted out as salvage for fair market price to smaller broadcast companies – emphasis on broadcast – those whose creativity has been stifled for the past decade – or those that were unwillingly forced out of broadcasting - will find new opportunities to restructure this industry.

In the end, Mark, you were just another empty tyrant in charge of an empire of straw men.

And the one's that got you where you are today are packing their golden parachutes as you read this.

You should’ve listened to the lyrics of that country song by your fellow Texan Kenny Rogers: "You got to know when to hold ‘em, know when to fold ‘em,/ Know when to walk away and know when to run /You never count your money when you’re sittin’ at the table /There’ll be time enough for countin’ when the dealin’s done."
*

45 comments:

Anonymous said...

"smaller broadcast companies – emphasis on broadcast – those whose creativity has been stifled for the past decade"

There you go again with your wishful thinking.

Like who?

As hard as it is for CC to get bank financing, it will be even harder for new companies to get money to buy broadcasting.

There is no small business program for radio. Radio isn't viewed as tthe kind of business banks want to take risks with. So that image will hurt small broadcast companies in their ability to raise money to buy stations.

But even if they WERE able to buy stations, what would they do?

Clear Channel was one of the best radio owners in the years before de-regulation. They were a well run company with highly rated stations. Then they exploded in size. You see what happened.

So let's say a few smaller companies buy some of CC's stations. All of a sudden, they have more people and facilities to manage, so they have to hire more managers, and next thing you know, they've recreated CC. Great idea.

Then again, why would anyone invest so much money in dying technology? The writing is on the walls. You don't need transmitters and antennas to raech audiences any more. So why pay for them? That's what Disney found out. That's what NBC is discovering. That's why they're starting to sell their TV stations.

No, the people who want to buy radio stations are people with political and social agendas, who have made money in other businesses, and now want to get a platform for themselves. Think about Dan Snyder in Washington. He's the guy who owns the Washington Redskins, and is buying radio stations so he can further his teams branding over the airwaves. Or what Bloomberg did with the once-great WNEW-AM in NYC.

These are not people who are likely to buy stations, hire creative staffs and let them do what they want. No, these new owners have specific purposes and goals in mind for their new purchases. And it's not to make money. They already have lots of that. It's about shaping minds.

Take as realistic look at who is likely to buy radio stations. One bit of advice: The devil you know is always better than the devil you don't know. There are a lot of rich devils out there. The FCC doesn't award stations to people on the basis of their creativity. They aren't going to require a new licensee to hire great air staffs or creative PDS. That's not going to happen.

If you want to get a taste of the future of radio, scan some of the stations on the AM band. That's where people were able to buy stations at fire-sale prices and use them to serve their own special interests. That's what we're likely to see if CC breaks up.

Ex-radio vet waiting in the wings said...

You should have listened to Diane Rheemes yesterday on NPR. She covered a lot of what you were saying especially about the prospects of creativity returning to radio. I pray that you are right.

Sick of Bashing said...

You could have left your politics out of it. What does Bush have to do with Clear Channel outside of being from the same state as their headquarters? Not everything has to have a Bush connection.

Anonymous said...

Lowry ran a tight ship. He was a no nonsense leader. He was not always right and made his biggest blunder by putting Randy Michaels in charge. He had a chance to undo the damage when he outsted Randy but chose to hang on to his subordinates like John Hogan and Tom Owens. That is when the problems got worse. Randy's well placed land mines started blowing up around them. Then Lowry fell ill and his kid did not know how to tie his shoelaces and the place went to pot. It was Lowry's fault for hiring Randy and Mark's fault for not sweeping the radio floor clean.

Anonymous said...

I was going to say that Clear Channel would retaliate by firing more staff except that I don't think there is anyone left to fire. Well, maybe the custodial staff. That and voice tracking can become one position.

Anonymous said...

Strange days indeed. I'd give a couple bucks to listen in to the phone calls going on over this. The hottest seats, of course, are those occupied by the bankers, who are pretty much silent. There's no really happy face to put on the fact that you've made a mistake that's going to cost $1 billion plus no matter what you do.

Someone should have told them that when you make your bets, it's customary to bring money to the table to cover your losses.

I see two ways this goes. Either someone gets everyone to the table over the weekend and this deal gets back on track, or the banks walk and figure they'll be able to delay the court judgment against them until a few years down the line when money isn't so tight.

As much as I feel for the CC employees, it would be a riot to watch management have to settle in and try to get the company on track. If that happens, I trust you'll keep us posted on all the fun since it won't be in the WSJ anymore.

Anonymous said...

John...Some of your readers need to buy themselves a clue or two. I agree with you that creative radio has a very good chance at being the end result of this Clear Channel bust.

A team of media experts on Diane Rheme's show yesterday echoed your recent thoughts on this blog.

I need to claify one comment here. Clear Channel was known as "Cheap Channel" long before deregulation. It was never a "great" company to work for.

Having experienced them before and after the Jacor merger I agree that the company went from bad to worse as the Jacor hillbilly bully mentality permiated the company. From that point on it was Randy Michaels's company. Lowry Mays put his trust in Randy and he took advantage of it.

talex said...

Randy Michaels + the sound you can't ignore = everyone did.

You have said it yourself. Fish stink from the head. No matter what Randy did it had to be signed off by Lowry Mays. Ultimately, he is the one responsible to his shareholders.

The kid (Mark) was / is a joke.

Anonymous said...

Hey Gorman

Thats what I liked about your stations. You know how to mix up the music.

You even do it here. Bessie Smith and Kenny Rogers lyrics in the same story.

Loved today's blog.

I hope you are among those that will buy stations when the prices come down. It sounds like you are ready.

Anonymous said...

John Gorman. One of your best. I hope this one makes its rounds to all broadcast companies and their employees. If for no other reason than a morale boost and an effort worth looking forward for.

Thank you.

THE ANSWER MAN said...

you know what? Screw you with your liberal themes and constant goading of the Mays family and others not of your political ilk. Radio is a BUSINESS. Get that thru your thick skull. You and your idiots can gloat all you want and deny that Clear Channel's predicament has NOTHING TO DO WITH THE WAY THEY OPERATE. CLEAR CHANNEL TURNED ONE PROFITABLE QUARTER AFTER ANOTHER UNTIL THE SUBPRIME CRISIS. Clear Channel should be commended for putting together a company that provides a wide variety of formats, the best nationally syndicated radio shows, well run television stations and a WORLDWIDE - HEAR ME GORMAN - WORLD WIDE OUTDOOR BUSINESS including EXCLUSIVITY IN CHINA! While all you other jokesters sell your CC stock at a loss I'M GOING TO BUY IT UP and make a fortune on your ASS. This is a targeted company at a time when EVERY MEDIA COMPANY IS FEELING THE PINCH. MARK MY WORDS. Take your liberal wishy washy readers and go listen to Eddie Vetter sing about how bad it is to be an American while he keeps cashing his checks. YOU ARE THE ONES WHO ARE PATHETIC.

Anonymous said...

Love it. I can hear Mark Mays on the phone. Love it.

I met him a couple of times. Empty suit. His father's son. Nothing there.

Anonymous said...

This is just another Gorman rant to remind us that everything evil in the world is not Al Qaeda. It's the Republicans. Go with your Obama/Osama and watch the United States turn into a welfare country.

Anonymous said...

All the pedigree, political connections, social connections and afflilations that can get you in the door cannot guarantee you success when forced to stand on your own two feet. That is the lesson learned by master Mark when he took over the family business from his father.

jan said...

John,you do realize that you just had Kenny Rogers "The Gambler" banned for life from every Clear Channel station.

Anonymous said...

Big Lots? You are too kind. I was thinking more in line of the Salvation Army or the Morgie.

Anonymous said...

Gorman He is calling in all the chits. This is in Fortune:

Clear Channel fight gets down 'n' dirty, Texas-style

A lawsuit against the banks funding the $26 billion buyout of the radio empire is just the latest episode in a long-running drama.
By Richard Siklos, editor-at-large

(Fortune) -- The sale of Clear Channel Communications, America's biggest radio station owner, has rambled and lurched along like some kind of pre-Wright Brothers flying machine - a bicycle with flaps trying to get off the ground. At every step of the sale process that began when a deal was struck in November 2006, there has been turbulence. Just last month, Clear Channel settled a dispute with private equity firm Providence Capital to complete the purchase of its TV businesses.

That seemed to clear the runway for two other private equity firms, Bain Capital and Thomas H. Lee Partners to go ahead with their $26 billion buyout of Clear Channel (CCU, Fortune 500), which also owns a big outdoor advertising business. Well, not so fast: on Tuesday, the flying cycle skittered toward the dirt yet again when, in a fairly striking development, Clear Channel and its private equity buyers sued the consortium of blue chip banks who are supposed to finance the buyout - a lineup including Citibank (C, Fortune 500), Morgan Stanley (MS, Fortune 500), Credit Suisse (CS), Deutsche Bank (DB) and Wachovia (WB, Fortune 500).

The market had been filled with rumors in recent weeks that the Clear Channel deal was on the skids because the PE firms could not arrange financing. On Thursday, Clear Channel warned in regulatory filing that the deal may not close because of the funding dispute.

In their lawsuits, filed in Texas and New York, the private equity shops contend that the financing is set in stone and that the banks want to wriggle out of putting up $22 billion in financing because liquidity troubles in the financial markets have given them "lenders' remorse" (as Bain and Thomas Lee put it in a release). For their part, the banks deny that they've done anything underhanded and are living up to the letter of their obligations.

The suits contend that what looked like a nice piece of business guaranteeing at least $360 million in fees to the banks was shattered by the realization that they would be down $2.65 billion out of the gate when they tried to resell the debt into credit markets that have seized up.

There's a sweeping, epic story here covering two industries being roiled by change: Media and finance. First, media. A decade ago the radio business was flying high in the United States when the market deregulated, allowing companies to scoop up several stations in the same market. No one did it with more gusto than Lowry Mays and his sons Mark and Randall, who built San Antonio-based Clear Channel into a goliath which today has close to 1,000 stations. Over the past few years, though, radio stocks have been clobbered because they are the cousin of two industries being roiled by the rise of the Internet - music and news.

On top of that, there is real prospect of the first advertising recession in years in the United States Clear Channel shares were wobbling at around $30 a share yesterday, more than nine dollars below the agreed buyout price, and less then one-third of their 1999 peak.

Then there's the crisis roiling financial markets. When the Clear Channel buyout was announced, there was pushback from some of the company's big institutional investors, who wondered if the private equity firms - then riding high like radio consolidators once did - were taking advantage of an overly pessimistic view in the stock market. (Indeed, in an atypical plan for a buyout, the Mays, who own 7% of Clear Channel, would continue running it after taking it private. And, despite the fact that its basic business of selling radio advertising isn't growing much if at all, it's a real business where scale can make a difference: more than 90% of Americans still listen to radio in any given week.)

Over the past few months, of course, the view that the PE folks were getting a bargain has evaporated as private equity firms have stumbled amid the credit crunch, and big buyout names like Blackstone (BX), Carlyle and Fortress have been singing the blues. The new storyline is that private equity is in limbo and can't pursue many new deals because financing has dried up. And, now, comes the latest iteration of the story: that even long-in-the-works deals like Clear Channel are in jeopardy because the banks want to walk.

The beauty of this latest twist in the Clear Channel saga is that the Mays are handling it in the best manner then know: Texas-style. That means that in addition to retaining all the fancy lawyers in New York to sue there for breach of contract, the company has also sued for "tortuous interference" in their home court in Bexar County.

And they've brought in a particularly big gun to their side, Joseph Jamail Jr. A billionaire himself, Jamail, 82, is called the "king of torts", and is perhaps best-known for getting an $11 billion jury judgment against Texaco in 1985 for his client, Pennzoil, which alleged that Texaco had sabotaged its efforts to merge with Getty Oil. (As a result, Texas filed for bankruptcy protection.) His personal web site says "He has been called a savior, a good ol' boy and and SOB." His suit against the banks is seeking at least $26 billion. Out of the gate, Jamail sought, and received a temporary "restraining order" against the banks, which sounds more theatrical than practical - but definitely puts points on the board.

One hopeful outcome, of course, is that some kind of compromise is struck, a trial is avoided, and the Clear Channel buyout finally takes flight. Clear Channel warned in the filing Thursday that "it is unable to estimate a closing date at this time and cautions the market that a closing may not occur." If it crashes, the legal tangle is only beginning. For now, though, it is all a harrowing reminder of how quickly the winds can turn against an industry and how hairy things can get when they do.

Clemaster said...

Does the hearing/trial have to take place in Texas? That would give Mays unfair advantage. Like everything else it will come down to influence peddling and who can do it the best.

Wonder who is backing what candidates in the presidential race.

None have made any comments on the state of media so far. At least that I am aware of.

Miss press clip said...

More stories coming out on their lobbying efforts:

Clear Channel lobbied on proposed buyout
March 28, 2008: 04:16 PM EST


Mar. 28, 2008 (Thomson Financial delivered by Newstex) --

WASHINGTON (AP) - Radio station operator Clear Channel Communications Inc. (NYSE:CCU) , whose proposed multibillion dollar buyout by private investors is reportedly near collapse, spent $2.5 million in 2007 to lobby on the buyout and on other issues.

Private equity firms led by Thomas H. Lee and Bain Capital Partners LLC are having difficulty reaching terms with the banks committed to financing the $19.5 billion deal, which was announced in November 2006. The lenders didn't show up to a meeting, even after a judge issued an order barring the banks from hindering or undermining the deal, the company said in a regulatory filing Friday. The company said the deal may not close.

Earlier this year, Clear Channel, which is the largest radio operator in the United States, agreed to sell radio stations in 42 markets in a deal reached with the Federal Communications Commission, which approved the sale of the company.

The San Antonio-based company also lobbied on other issues related to private equity firms, which are facing proposed higher taxes, according to proposed legislation.

Clear Channel spent nearly $1.3 million in the second half of 2007 to lobby Congress, according to a disclosure form posted online Feb. 14 by the Senate's public records office.

The company also lobbied on Sirius Satellite Radio Inc.'s (NASDAQ:SIRI) $5 billion buyout of XM Satellite Radio Holdings Inc. (OTCBB:XMSWW) (OTCBB:XMSRZ) (NASDAQ:XMSR) The Justice Department approved that deal on Monday and analysts expect the FCC to sign off on it as well.

Clear Channel and others oppose the Sirius-XM deal because it said that combining the nation's only two satellite radio companies would create a monopoly.

The radio operator, which also lobbied on royalty and other issues, spent $1.2 million in the first six months of 2007 to lobby on largely similar matters.

Lobbyists are required to disclose activities that could influence members of the executive and legislative branches, under a federal law enacted in 1995.

Anonymous said...

Is this blog about radio or about politics? I thought you were a programming consultant. Why not talk about programming instead of speculating on the business end and throwing your political rhetoric in.

When I read you I want to read about radio programming not the business end of radio. Leave that for the Tom Taylors and Jerry DelCs to do.

route out the coot said...

Gorman You ought to know that the Coot has been bad mouthing you every chance he gets. He calls you an angry man, a has been and someone who cannot get a job. I think that should be the description of the Coot. He is also the description of a consultant: a man that can tell you he knows a million ways to make love but doesnt know any girls.

His bedroom project was as dumb as they come. It was staged and everyone saw through it.

The Coot also blamed you for helping create the bad press for Clear Channel.

I think they did that one all by their lonesomes.

Malcom said...

Forbes on Clear Channel

Clear Channel's problems seem to get worse everyday, but the company keeps fighting to get bought out.

A new page of the Clear Channel Communications (nyse: CCU - news - people ) buyout saga was written on Friday when the media conglomerate said it can't offer investors a projection on when the $19.5 billion deal will close. In the same filing with the Securities and Exchange Commission, Clear Channel also warned that the deal may not even go through. Shares of the San Antonio-based company slipped 1.4%, or 40 cents, to $29.20, by the end of trading in New York on Friday. Shares had dropped as much as 5% in earlier trading.

The buyout of Clear Channel was supposed to go through by March 31, but the credit crunch led the bankers backing the company's would-be buyers to balk at the deal. A group of private equity firms have agreed to pay $39.20 a share for Clear Channel, but its shares price has fallen sharply on worries the deal will not be completed. (See: "Obstacles For Clear Channel")

On paper Clear Channel's filing is a non-statement--that the deal may fall through is not news. But on a more practical level the company's filing provides a new source of uncertainty. The filing comes in the wake of optimism on Thursday when a Texas judge ordered the bankers against interfering or blocking the deal's close. (See: "Clear Channel Gets Help Clearing The Way")

Acquisitions have been stalled, or even called off, because of frozen credit markets, which make it difficult to locate financing. Investors have grown wary of providing financing for risky deals since the subprime mortgage crisis blossomed last year. (See: "Alliance Stonewalled By Blackstone") The Clear Channel buyout remains the largest pending buyout in the United States, according to takeover tracker Dealogic. In addition to its radio holdings, Clear Channel is a major billboard company, with roughly 1 million signs worldwide.

Of note, the in the filing Clear Channel noted that while it and the potential-buyers met on Thursday, the other six banks, led by Citigroup (nyse: C - news - people ), didn't. Those other banks include Morgan Stanley (nyse: MS - news - people ), Credit Suisse (nyse: CS - news - people ), Royal Bank of Scotland (nyse: RBS - news - people ), Deutsche Bank (nyse: DB - news - people ), and Wachovia (nyse: DB - news - people ).

A court hearing in the case is scheduled for April 8.

Stanford Group analyst Fred Moran said there's some chance of a compromise as the court date approaches. The banks' failure to show up to the meeting Thursday doesn't necessarily mean the deal is doomed, he added.

"It doesn't necessarily mean there can't be compromise in the future. It just means the parties are at an impasse now," Moran said.

excc3 said...

Hey John,

You should mention in your blog about Clear Channel's enemies list of social security numbers. Radny Michaels devised a way to put all people he did not want to have hired by Clear Channel on a master list according to social security number. It was easier than having a list of names and in this business there are a lot of duplicates. Since everyone has only one SS number it made it easy to cross reference among all stations. That way if someone applied for a job that Randy or his club house boys didn't like or had beaten him in the past he would make sure they would not be hired. There were hundreds of names on the SS list at one point. If you don't know about it I can send you the information.

Anonymous said...

Shame on you for slandering the names Larry Flynt, Peter Guber,Jon Peters,Dieter Zetsche and Gerald Levin. Mark Mays is in a scumbag class all by himself.

Angry Guy said...

The mortgage industry is collapsing and is taking the economy down too because EVIL GREEDY BASTARDS screwed good people, an industry and shareholders.


Clear Channel is collapsing and is taking the radio industry down too, because EVIL GREEDY BASTARDS screwed over employees, an industry, advertisers and shareholders. Yes I understand radio is just a business, but when you have to EAT PEOPLE for a living you deserve to spend an eternity rotting in hell!!!

To Clear Channel, Cox Broadcasting, and other evil empires who operate their businesses like CC, I have one wish for you. I hope you all go to hell!

Anonymous said...

John should tell the story about the day he had lunch with John Hogan and Lisa Dollinger.

It's a good one.

What will it take for you to stop badmouthing us?

His answer: A Job.

Had they have said, okay, there would be no blog.


true story folks.

hypocrite is spelled G-O-R-M-A-N.

bobyoung said...

You said

"We now join the telephone conversation in progress…

“After all the things our father did for you and your family...,” whines Mark in a high pitched voice that could cause pain to a dog’s ears.

“We swayed…er…positioned our newscasts in your favor, Mr. President. We even banned the Dixie Chicks and Bruce Springsteen when they dared to insult your vision for America.”"

Looks like the Evil Empire is finally leaving us for good, perhaps radio will return to a sense of normality as the country also returns from this assault to the majority of people from the lunatic right wing who have let big business run rampant especially during the past 8 years even though deregulation was unfortunately pushed through in 1996. We need independent voices in radio not rich men pushing their own agenda.

Anonymous said...

Mr Gorman, seriously, please get some help. Godspeed

Anonymous said...

Way off of the theme of these comments but John's mention of Agri Broadcasting caught my eye.

More completely called the Agri Broadcasting Network, or ABN, my first exposure to that entity was hearing an odd (to my ears) sounding fellow named Ed Johnson doing farm market reports over the radio in Columbus, Ohio in the 1970s.

Turns out Ed was a farm boy from central Ohio who ended up graduating from The Ohio State University with a degree in farm science. I don't now what sparked it but Ed must have found a talent for radio somewhere in his box of tools because he took his odd sounding voice and created ABN, which eventually produced market reports and agricultural features for radio stations all over Ohio and even in to Indiana, I believe. ABN even produced a weekly television program named "AgriCountry" featuring a variety of segments ranging from the latest agricultural techniques to rural living issues.

This city boy enjoyed viewing Ed's television program and gained an appreciation for farmers from it. Unfortunately Ed passed away at a relatively young age and ABN ended up being gobbled up by Clear Channel in the aftermath and AgriCountry was to be no more.

The whole point of this dissertation is to illustrate another example of what someone with a true talent and desire to broadcast and inform USED to be able to do. Maybe wishful thinking but it would certainly be nice to see those days come back somehow.

Anonymous said...

John: I was looking over the comments made in response to your blog. Unless those pro-Clear Channel "comment-ors" are part of the golden parachute club I cannot see why anyone working for that company would support them in any way. No one's job is safe and it does not matter on performance. CC is the epitome of "it's not who you know, it;s who you----" and you get the message.

I don't work for CC anymore. A lot of my friends still do and no one is there because they want to be. I know there are plenty of people working at jobs they don't like. The difference here is that there was a time when you had "radio people". They loved working in radio. It was creative and fun. You had to stay on your toes like a prize fighter. Those times have changed.

It is not all that great on the other side either. I left CC for a job at CBS. It is different than CC tho no better. At CBS it is all politics. The market manager runs the show and not very well. He recently fired a PD who had just given him the best ratings his station ever had. He was replaced by a guy who for lack of a better term has all the charm of a snake.

If radio does not splinter into more owners I am afraid radio will become completely "national" with only traffic reports and an occasional news cast as its localism.

Anonymous said...

Bloomberg today (Saturday):

Clear Channel Communications Inc. deferred its first-quarter dividend after a dispute with lenders delayed the closing of its $19.5 billion acquisition by Bain Capital LLC and Thomas H. Lee Partners LP.

The buyers requested the dividend be postponed after banks balked at funding the buyout, San Antonio-based Clear Channel, the largest U.S. radio broadcaster, said yesterday in a statement. The company last made a quarterly payout of 18.75 cents a share on Jan. 15.

The move may save Clear Channel $93 million. The company's board typically declares a dividend at the end of each quarter, payable on the 15th of the following month. The buyout was scheduled to close by March 31 before lenders refused to fund the deal, sending the dispute into court.

Clear Channel fell 40 cents, or 1.4 percent, to $29.20 yesterday in New York Stock Exchange composite trading. The stock is 26 percent below Bain and Thomas H. Lee's $39.20-a- share offer, as investors bet the deal will be the next leveraged buyout derailed by the credit-market collapse.

Clear Channel said in a filing yesterday that the sale may not be completed after banks financing the purchase failed to show up at a meeting scheduled to close the deal. The company can't estimate a closing date, according to the filing with the Securities and Exchange Commission.

Bain and Thomas H. Lee sued banks led by Citigroup Inc. in New York this week, and Clear Channel joined the private-equity firms in a complaint in Texas.

No-Show

Bain and Thomas H. Lee told Clear Channel at this week's meeting that they wouldn't be able to complete the buyout because banks refused to provide financing. Lenders led by Citigroup Inc. stand to lose at least $2.7 billion if the purchase goes through because loan prices have tumbled since they agreed to finance the transaction last April.

``Making a public disclosure was necessary because we're coming near the end of the period targeted for closure,'' said Fred Moran, an analyst with Stanford Group in Boca Raton, Florida. ``All of this is public negotiation and the various parties are still pushing for the outcome they want.''

Bain, Lee and Clear Channel sued Citigroup, Deutsche Bank AG, Credit Suisse Group, Morgan Stanley, Royal Bank of Scotland Group and Wachovia Corp., accusing them of backing out of commitments to provide $22.1 billion in financing. The banks say the lawsuits, filed in Texas and New York, have no merit.

Danielle Romero-Apsilos, a Citigroup spokeswoman, had no comment yesterday on behalf of the bank group.

`Binding Commitments'

``We want to complete the deal to buy Clear Channel, and are disappointed that the banks have chosen not to fund the transaction under the terms of the binding commitments they entered into almost a year ago,'' the private-equity firms said in an e-mailed statement.

This week, Texas state court judge John Gabriel issued a temporary restraining order telling banks they can't thwart the buyout by refusing to fund it. The banks have asked for the case to be moved from the Texas state court to a federal court that may be more favorable for the lenders.

In the Texas complaint, Clear Channel and the buyout firms asked for an expedited jury trial ``because the merger is at a critical stage and may terminate in weeks if this matter is not resolved prior to that time.''

A hearing is scheduled for April 8 in the Texas court on whether an injunction against the banks should be issued. The first hearing in the New York case is set for April 3.

The buyout agreement may require the private-equity firms to pay Clear Channel breakup fees of as much as $600 million if they terminate the deal.

Breakup Fee

``If the banks, which committed financing, don't come to the bargaining table, they could be subject to paying the breakup fee,'' Moran said. He recommends buying Clear Channel shares and doesn't own them.

The buyout, announced in November 2006, was initially criticized by large investors as being priced too low. Clear Channel approved the purchase after Thomas H. Lee and Bain boosted their bid and offered investors a 30 percent equity stake in the new company. Shareholders voted in favor of the deal last September.

Anonymous said...

Here is my complaint regarding these phony endorsements.

When an artist or personality is represented by a press agent or a publicist you know up-front that this person is getting paid to perform representative services.

With "the Coot" and various Clear Channel engineers their support of HD radio and the HD Digital Radio Alliance is not disclosed.

It is fairly obvious that "the Coot" would not be promoting HD radio unless he was getting paid to do so. He should come clean and admit that he is a PAID spokesperson for HD radio.

He instead pretends that he really cares about HD and even claimed he was not doing it for money.

If "the Coot" is getting paid to promote HD radio how do we know he is not getting paid by the record companies to push their product on his rock radio stations?

Did I hit a raw nerve, Mr. J?

Anonymous said...

FYI Clear Channel never banned the Dixie Chicks.

Anonymous said...

I'm not an attorney, but a couple of things strike me as very likely, having some years behind me and seeing how other lawsuits are resolved: 1.) this sale probably won't happen anytime soon and will likely stay unresolved in the courts for quite some time, maybe years; 2.) many, many suits are settled for pennies and dimes on the dollar and whether shareholders and/or creditors will see anything close to the buyout price upon the deal's settlement seems pretty unlikely.

Anonymous said...

"many, many suits are settled for pennies and dimes on the dollar"

Which is why the Mays family, as major stockholders, won't settle. They'll simply do what Emmis did and take the deal off the table, collect the $600,000 penalty, and go back to status quo.

I know a lot of haters are cheering the tummult going on now. But returning to status quo isn't a victory either.

Anonymous said...

It's Monday evening, Mark. Do you and your Bain and Lee buddies know where your banks are? Do you think the banks even care?

Too bad there isn't a lemon law that applies to pawning off non functioning radio stations.

You would never sell another property.

Anonymous said...

Just discovered your blog. I agree with most of what you say especially on the old Coot. I don't even know you and he and his people have bad mouthed you and asked that I have nothing to do with you. I don't know if you can take legal action or not. You may not have to. Most radio people are seeing through his shill on HD radio. You should take credit for helping out him.

Anonymous said...

Faber on CNBC kind of echoed my sentiments today, a belief that I've held for quite some time: Bain doesn't really want this deal but are doing everything they can to merely look like they do.

Anonymous said...

From Bloomberg today. Not good for CC:
Clear Channel Buyers Demand Response From Deal Banks (Update3)

By Jason Kelly and Zachary R. Mider

April 1 (Bloomberg) -- The private-equity firms seeking to acquire radio broadcaster Clear Channel Communications Inc. demanded a response from their banks to the buyers' March 26 proposal on financing the $19.2 billion transaction.

The major sticking point to completing the deal is the banks' attempt to change previously agreed to terms of the funding, lawyers at Ropes & Gray LLP, which is representing Bain Capital LLC and Thomas H. Lee Partners LP in the purchase, said in a letter sent to the lenders today.

``There is only one fundamental issue that divides us: your changing the agreement to convert a committed 7½-year long-term financing into a 3-year bridge,'' according to the letter, a copy of which was obtained by Bloomberg News. The Boston-based buyout firms were responding to a statement yesterday by the six banks, including Citigroup Inc. and Deutsche Bank AG, that they were willing to negotiate the financing terms.

Bain and Thomas H. Lee Partners, also known as THL, are asking courts in New York and Texas to force the banks to lend more than $20 billion to complete the purchase. The bank group, which also includes Morgan Stanley, Credit Suisse Group, Royal Bank of Scotland Group Plc and Wachovia Corp., stands to lose as much as $2.7 billion if the banks fund the deal because loan prices have tumbled since they agreed to finance it a year ago.

The banks, after agreeing to provide credit that would mature in six to eight years, now insist on a three-year maturity, Bain and THL said in their New York suit.

``You have never responded to our many requests that you substantiate why your proposed terms are consistent'' with previous statements and agreements, the buyers said in today's letter.

Court Fight

Bain and THL ``know well that there are many important open issues still to negotiate and any suggestion otherwise is just nonsense,'' the bank group said in a statement responding to today's letter. ``Providing memoranda to the media will not get this deal done, nor will filing baseless litigation.''

The banks, in their statement yesterday, said they will honor their commitment to fund the buyout and want to negotiate a final agreement rather than litigate.

The group also argued in court filings against a quick trial and noted they received the March 26 proposal hours before they learned the buyers were filing suit against them.

That opposition ``is more of the same `run out the clock' strategy that they have been pursuing since February,'' the buyers said last night in an e-mailed statement.

Clear Channel spokeswoman Michele Clarke declined to comment.

Clear Channel fell 72 cents to $28.50 at 4 p.m. in New York Stock Exchange composite trading. The stock is trading 27 percent below the $39.20 buyout price, indicating that investors are skeptical the deal will close.

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