The Greater Fool – Erickson Media
   

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The Greater Fool

The Greater Fool

It’s not a theory anymore…

So, what do you do when you’ve over-paid for your radio stations, when you’ve cut expenses to the point where most of your stations aren’t even fully staffed, where General Managers run multiple stations in mulitple markets, where entire markets are voice-tracked?

What do you do when you’ve cut salaries for almost everyone below the top executive levels, when most of your employees don’t qualify for benefits of any kind, when you can’t add any more units to overly-cluttered products, and you still can’t make your debt payments?

You postpone, and hope for a miracle.

You add more debt.

You sell $2.2 billion in new junk bonds.

Because by the time these junk bonds are due, in 2020, most of the top guys at Bain/Clear Channel will have made their fortunes and moved on to the next deal.

By then, it will be someone else’s problem.

“As recently as January, Moody’s Investors Services pointed to Clear Channel as one of the US companies that could struggle to refinance its debt maturing in the coming years as sovereign debt problems potentially threaten access to the capital markets and banks in both Europe and the US look at retreating from speculative lending.”

“Clear Channel declined to comment.”

After all, what can they say?

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*All quotes taken from The Financial Times

But…

this has been my busiest first quarter in almost 5 years, and indications are, the economy, and advertising are improving. It may not be fast enough, or big enough, to bail out the most over-leveraged radio groups, but it should help the more financially sound ones.

Hope lives. Check out this infographic from Payscale.com

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