Radio: Clear Channel – Smells like team spirit!

How will Clear Channel operate under its privatized BainCapital and Thomas H. Lee brave new world version?

We don’t know. But we do know how Clear Channel will be run prior to the takeover.

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Let’s check out number two son and Clear Channel CFO Randall Mays’ latest memo to his managers.

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I’m surprised BainCapital and Thomas H. Lee didn’t summon their memo rewriters to San Antonio for this one.

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Trustafarian Randall would’ve been better off composing this in sycophancy instead of baring his chipped and weakened fangs.

From: Randall Mays

As all of you know we have now signed up the new Merger Agreement and we hope to close sometime during the third quarter.

I think as most of you also know by now, there are certain provisions in the Merger Agreement that make it extremely important for us to be as judicious with cash as we possibly can between now and closing. First, as part of the deal, Clear Channel shareholders will potentially be forced to roll a portion of their shares into the new transaction. It is the preference of our board that no one be forced to roll (everyone has the option to roll and the board would prefer that this remain an option rather than a requirement). There is a certain level of cash which we will need to have at closing in order to insure that no one has to do anything that is not of their choosing.

Additionally, the debt provided by the banks to fund the transaction was fixed at the time of signing the amendment to the merger agreement. Thus, any additional cash outlays between now and the deal closing, have to be funded 100% with equity. For those of you that have run levered return models, it is very difficult to make deals attractive when you have to fund them with 100% equity. Post closing this will not be the case and we will go back to our normal procedures so don’t infer anything in this other than there are timing issues with respect to capital before closing.

What does all that mean? As we look forward between now and closing this means that we will be extremely judicious in any capital spend of any type. We also are going to be very closely monitoring cash generation and balances.

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That MBA from the Harvard Business School didn't do much for his memo-writing. That's for sure.

At least he warned the Clear Channel managers in advance.

We know of many Clear Channel employees were busted from full to part-time, while others were forced to take on additional duties with either no additional – or even less compensation.

But let’s be fair and show sympathy toward the Mays family. They’ve made their sacrifices, too, according to a recent SEC filing.

Let’s start with Randall, the no-fun number two son and CFO. From 2006 to 2007, the poor boy went from annual earnings of $9,282,382 to $8,705,760. That’s $576,662 less take home.

Have mercy on poor number one son and CEO Mark Mays, the most revered of all feckless crapweasels. He took a somber hit. In 2006, he made $9,311,996. In 2007, took home only $8,705,760. That’s a $606,236 loss.

The kids are no Lowry Mini-Me’s.

Pater Lowry addressed problems. Sons of privilege Mark and Randall just water them daily.

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You could also say that Clear Channel radio division CEO John Hogan’s had a taste of his own down-pricing medicine. Hogan blew a $1 million bonus for failure to achieve certain undefined goals. He did get kissed a bonus $157,500 for his “achieved performance of the management objectives,” which, when translated, means “metza metza coat holder.” In 2006 he pulled $3,039,285. Last year, he was down to a paltry $2,166,308. That’s a loss of $873,000. But as the saying goes, less is more!

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Clear Channel also informed the Security and Exchange Commission that its board “engaged an outside security consultant to assess security risks to the physical plant and operations, as well as its employees, including executive management.”
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The consultant’s report led to Clear Channel implementing – and here’s how they call it - “numerous security measures for our operations and employees, including a general security program covering selected senior executives.”

Drastic times call for drastic measures. Call for the Gulfstream jet.

“For security purposes and at the direction of the board, Mark Mays, Randall Mays and Lowry Mays utilize Clear Channel’s airplane for all business and personal air travel.”

Translation: We don’t like taking off our shoes and being told where to sit.

Most of us wouldn’t call a private jet an “airplane,” but I digress.

Let’s look at the line item marked “personal air travel.” For 2007, Mark Mays took the one of the company “airplanes” for $55,012 in personal use. Co-founder Lowry Mays hopped the Gulfstream for $92,980, and young Randall logged his at $172,934.

Of course, these figures don’t take in the costs of junkets for key Capitol Hill decision makers supplied by Clear Channel lobbyists. Those are buried in a separate line item.

To those Clear Channel employees that had their travel budgets slashed or eliminated, please remember that it’s all relative. The Mays family shares your pain.

This proves that Clear Channel is a bilingual company. B.S. is second language to them.

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Jeff & Flash circa 1981