Video killed the radio corporations

Music news, rumors, what you're listening to, how you're listening to it and whether it's all on the up-and-up.
Beaver
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Video killed the radio corporations

Postby Beaver » Thu Mar 15, 2018 10:52 am

Big radio station owner files for bankruptcy
https://www.channel3000.com/news/money/ ... /716652453

"The two biggest owners of radio stations in "America have both filed for bankruptcy. iHeartMedia, the operator of 850 stations across the United States, submitted the paperwork on Thursday. Its rival Cumulus, the operator of 445 stations, did the same thing a few months ago.

The two cases are unique, but both companies face similar challenges in a troubled industry. And both companies are trying to restructure their debt. iHeartMedia has been crippled by piles of debt for many years. It has been struggling to get out from under a massive debt load it took on as part of a leveraged buyout of billboard company Clear Channel Outdoor in 2008."


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Re: Video killed the radio corporations

Postby uwstudent » Thu Mar 15, 2018 5:16 pm

You might want to ask Bain Capital for a comment.

Beaver
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Re: Video killed the radio corporations

Postby Beaver » Sat Mar 17, 2018 9:38 am

Bain Capital sees high-profile buyouts go bust
https://nypost.com/2018/03/15/bain-capi ... s-go-bust/

"The Boston private equity firm was a lead investor in three leveraged buyouts — Toys ‘R’ Us, iHeartMedia and Guitar Center — each of which experienced a financial collapse in recent days. The Mitt Romney-founded firm co-led the 2008 buyout of America’s biggest radio station owner, iHeart, and on Thursday the San Antonio, Texas, company filed for bankruptcy protection.

In 2005, Bain was a lead investor in Toys ‘R’ Us, which announced Thursday it was liquidating its 730 stores, putting 33,000 jobs at risk. And the 34-year-old PE shop was also the lead investor in 2007 in Guitar Center, the musical instrument retailer that this week proposed a debt refinancing that, if accepted by bondholders, would be considered a default, credit agencies said.

Bain typically buys steady, healthy companies in highly leveraged buyouts. “They take a lot more risks than other private equity firms,” Eileen Applebaum, co-director of the Center for Economic and Policy Research in Washington, DC, told The Post, referring to pushing the envelope on the amount of debt they put on their companies."

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Re: Video killed the radio corporations

Postby jman111 » Sat Mar 17, 2018 10:21 am

And in this idea, you go into a company, and you either charge fees that are far too high, you bid on the company in an auction, maybe you do various things that drive down the price, and you try to get it as cheaply as possible. And then you invest in it, but you invest in it with a lot of borrowed dollars, and you load the company up with too much debt, you charge too high of fees, and the next thing you know, a lot of workers end up being laid off.

Now, the private equity fund managers may still make a very good amount of money because they'll get fees, and maybe they'll make a profit. But a lot of times the workers really suffer, or at least they - certainly they lose their jobs, and they feel bad about that. So there is this question of, is there - are there forms of capitalism that are just too rough, that result in too big of profits for some people and too much suffering for others?


Right, just they're there to make a profit. And the argument is that's what capitalism is, that you come in, and your goal is to make a profit, not to support the Little League team. Your goal is not to have nice, cozy office furniture. It's not to keep the same person employed after 30 years, even if their skills are rusty. You job is to make money for your investors. So that's the way you have to - you know, that a capitalist would look at it.

(my emphases)

'Vulture Capitalism'? How Private Equity Firms Work


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