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Clear Channel buyout
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| LuNaSeA |
so what does that mean to those who listen to the radio? do u think things will change for the better/worse or stay the same?
btw, most of us are too lazy to click on links, u're better of just copying and pasting the whole article then include the link for source. :) |
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| Konijn |
in the short term, it will probably mean good news for the FM listener as new programming will be able to make its way onto the air and, at least to some degree, break up some of the banality currently travelling through the airwaves. this will be a function of both the vaccuum created by the shift and the immediate goal of bringing listeners back.
in the absence of structural changes however(i.e. the repeal of the telecommunications act of 1996 and the stemming of monopolization and ipod shuffle-like stations) don't expect the changes to be too drastic or long-lasting.
clear channel is in this predicament because its market strategy was too successful: with the help of government cronies they created such a monopoly that even the most clueless of listeners got tired of listening to the same playlists, in the same order, with the same syndicated djs day-in and day-out everywhere in the country -- and ended up abandoning the medium in droves. |
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| ReenTeenTeen |
| i hope its for the best, although i just dont care. i havent tuned to radio in over 10 years. |
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| DeRangedMind |
| quote: | Originally posted by LuNaSeA
so what does that mean to those who listen to the radio? do u think things will change for the better/worse or stay the same?
btw, most of us are too lazy to click on links, u're better of just copying and pasting the whole article then include the link for source. :) |
| quote: | Originally posted by Dana Cimilluca and Don Jeffrey
Clear Channel Agrees to Be Bought by Lee, Bain for $19 Billion
By Dana Cimilluca and Don Jeffrey
Nov. 16 (Bloomberg) -- Clear Channel Communications Inc., the largest U.S. radio broadcaster, agreed to a leveraged buyout by Thomas H. Lee and Bain Capital Partners LLC that values the company at about $19 billion.
The firms will pay $37.60 a share, about 10 percent more than yesterday's close, the San Antonio-based company said today in a statement. The company also said it plans to sell 448 of its 1,150 radio stations and all its 42 television stations.
Clear Channel put itself up for sale last month after asset sales and share buybacks failed to boost the stock price. The company lost more than 60 percent of its market value since 2000, as radio advertising sales stagnated and listeners migrated to the Internet, satellite radio and iPods. The buyers are betting they can slice costs and stem the slide.
``The anticipation is that market right now is undervaluing these radio assets and that they will be more valuable three years out,'' Dave Novosel, an analyst with the independent bond research company Gimme Credit, said before the deal was announced.
Clear Channel shares have fallen 13 percent in the past three years. The stock jumped $1.53 to $35.65 in early New York Stock Exchange composite trading, giving it a market value of $17.6 billion. Clear Channel also has about $8 billion in debt.
Matt Benson, a spokesman for Thomas H. Lee, declined to comment. Alex Stanton, a spokesman for Bain, wasn't immediately available to comment.
End of Control
Bain and Lee beat a consortium that consisted of Blackstone Group LP, Kohlberg Kravis Roberts & Co. and Providence Equity Partners Inc. Under the terms of the agreement, Clear Channel can seek other offers and negotiate a new agreement until Jan. 5.
The sale marks the end of Mays family control over the company founded by Lowry Mays in 1972 with his friend Red McCombs. The two men started the company with one radio station and took it public in 1984. After the Telecommunications Act in 1996 allowed operators to have more than two FM stations in a market, Clear Channel went on a buying spree, bringing its station total to 1,150 from 43 in 1995.
Mays's son, Chief Executive Officer Mark Mays, has since sold 10 percent of the company's outdoor-advertising unit, Clear Channel Outdoor Holdings Inc., to the public, in 2005, and spun off its concert division, now Live Nation Inc., in an effort to boost the share price.
The deal leaves current executives in charge of the company, including Mark Mays and his brother Randall Mays, 41, who is chief financial officer. Mark, Randall and Lowry Mays own about 7 percent of the shares.
As part of the deal, they agreed to reduce the payments they could have received as part of a change of control, Clear Channel said.
Profit Rises
Clear Channel third-quarter profit rose 8.2 percent on higher advertising sales from its radio stations. Profit from continuing operations climbed to $185.9 million, or 38 cents a share, from $171.8 million, or 32 cents, a year earlier. Sales increased to $1.79 billion from $1.68 billion.
By selling the company to buyout firms, the Mays family followed a trend among media companies. Univision Communications Inc., a Los Angeles-based television and radio broadcaster, in June agreed to sell itself to a group of firms for $12.3 billion. Tribune Co. is also considering a sale.
Private equity firms are on a record run of purchases. After raising $170 billion so far this year, buyout companies have spent $425 billion on acquisitions.
Goldman Sachs Group Inc. advised the company on a potential sale. Lazard Ltd. advised the special committee of the board that considered the bids. The Wall Street Journal reported Nov. 14 that the three Mays executives who are directors did not participate in the vote on the buyout. The company declined to comment on the report.
Buyers Before
The firms competing for Clear Channel have been buyers of media companies before.
Providence Equity, based in Providence, Rhode Island, Boston-based Thomas H. Lee Partners and Fort Worth, Texas-based Texas Pacific collaborated on the acquisition of Univision. Texas Pacific had been part of the Providence consortium bidding for Clear Channel before withdrawing sometime before the deadline for offers, people briefed on that decision said.
Thomas Lee, Bain and Providence bought Warner Music Group, the fourth largest record company in the world, from Time Warner Inc. in 2004 for $2.6 billion and took it public last year. The firms own more than 62 percent of the shares.
Boston-based Bain, Thomas H. Lee and New York-based Blackstone teamed up a year ago with Cumulus Media Inc. to buy Susquehanna Pfaltzgraff Co.'s radio unit for $1.2 billion.
Clear Channel will likely lose its investment-grade credit rating because of the amount of debt needed to fund the purchase. The firms will raise the money in the company's name.
The company's 5.5 percent notes due in 2014 fell 8.3 cents on the dollar yesterday to 84.5 cents, as the yield rose to 8.23 percent, according to Trace, the bond reporting service of the NASD.
``That type of debt will lead to a very low credit rating for the company,'' said Novosel. ``Bondholders will be hurt.''
To contact the reporters on this story: Don Jeffrey in New York at [email protected] ; Dana Cimilluca in New York at [email protected]
Last Updated: November 16, 2006 08:42 EST |
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| DeRangedMind |
| With Sirius and XM on the rise and be commerical free with great talk radio ,free bull radio won't be around for long. Also the been closing down many station and even Disney sold there stations away. They have horrible year and hard hit they took was when Howard Stern left. |
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| InterMilan31 |
FM/AM sucks I have XM and never ever listen to local radio anymore. Clear Channel as much as I hate them for their censoring and uber conservativeness are brillant for pulling out now. With all new cars being equipt with Satelite radios and word of mouth I highly doubt that fm/am radio will be as big of a money generator.
Everyone buy XM Radio...if you buy Sirius your a douche they will be gone soon as they cant meet their numbers and XM one ups them each time |
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| DJ_Lord |
| quote: | Originally posted by InterMilan31
FM/AM sucks I have XM and never ever listen to local radio anymore. Clear Channel as much as I hate them for their censoring and uber conservativeness are brillant for pulling out now. With all new cars being equipt with Satelite radios and word of mouth I highly doubt that fm/am radio will be as big of a money generator.
Everyone buy XM Radio...if you buy Sirius your a douche they will be gone soon as they cant meet their numbers and XM one ups them each time |
actually sirus market cap is bigger by 2 billion. its quarterly rev. growth killed xm with a whopping 150%.
if u take a look at the charts u can clearly see that sirius is overcoming its resistance and looks like its gonna stop moving sideways. and theres a lot more volume of stock moved in the market, things are looking well for sirus but the industry theyre in is still very tough especially if people have to pay extra to get their service in my opinion.
i think xm and sirius should merge to increase market cap., revenue and cash flow. |
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| Groundhog Boy |
| quote: | Originally posted by DJ_Lord
i think xm and sirius should merge to increase market cap., revenue and cash flow. |
And have a monopoly on satellite radio? Are you kidding? |
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| limin_li |
| I am guessing CBS Radio is the winner in this race. Gee I wonder why Clear Channel is having huge yard sale? My guess is that they can't keep the Kiss, Power, Q, Hot, formats forever. Something has to be done. |
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| InterMilan31 |
| quote: | Originally posted by DJ_Lord
actually sirus market cap is bigger by 2 billion. its quarterly rev. growth killed xm with a whopping 150%.
if u take a look at the charts u can clearly see that sirius is overcoming its resistance and looks like its gonna stop moving sideways. and theres a lot more volume of stock moved in the market, things are looking well for sirus but the industry theyre in is still very tough especially if people have to pay extra to get their service in my opinion.
i think xm and sirius should merge to increase market cap., revenue and cash flow. |
its always nice to see a Sirius fanboy considering that Sirius counts unsold cars installed with Sirius serivce as "subscribers" it doesnt phase me to see Sirius lovers try to go on and on about how well its doing. The truth is Sirius will be in dept in a few years they paid too much money for thier talent and are not getting much in return. Sirius will be UPN compared to NBC(XM) in the future. Neither will merge that is just something Sirius chairman ex Viacom exec said once but XM would gain nothing by it.
The little doggy will stay just that little..
btw Insiders think XM will be making a profit by Q1 2007 compared to Sirius's estimated profit date Q1 2008.
So the fact that you say Sirius is overcoming the resistance is pretty foolish since XM is always ahead of Sirius in these type of situations. |
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| DJ_Lord |
look at the charts. :disbelief
btw im not a sirius fanboy im just telling you what i think its going to happen in the future.
for all i care they are both ty companies with ty stocks and utter ty returns. there are much better stock to look out for right now.
thank you. |
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