the further gutting of radio operations. I suspect others will follow the lead of clear channel while trying to drive down cost.
whats below is via tom taylor at radioinfo.com
590 more jobs whacked at Clear Channel, and the hammer fell on programming and back-office.
Watching the sometimes thermonuclear message boards at Radio-Info.com and checking the volume of emails to me directly was like picking up reports of casualties from bombing raids in a war movie – they just kept coming in waves. The East coat markets hit first, then the Midwest and then the Pacific time zone markets. This T-R-I newsletter is literally not long enough to list all the names contained on the message boards, but I’ll try to give you some sense of the layoffs, a couple of stories down. You already know that it occurred the way T-R-I predicted last week – it happened two weeks after the latest Clear Channel managers meeting in Dallas, and it was mostly programming (on and off air), engineering, I.T., and from what CC calls the “business office” category. Many stations were apparently untouched. At others, you wonder who’s left. It’s all about (say it after me) “the numbers.” Or, as Bain Consulting says – “the metrics.” Some back office functions will now be automated or handled outside the local market, in a fashion that CC believes will catch it up with modern business practices.
heres a bit more from the recent nab conference that just took place and relates to the ongoing efforts to find and obtain cash across the greater broadcasting sector.
More from NAB-Las Vegas about the deal market – MVP’s Brian Pryor says “there are three buckets.”
The broker was busy taking meetings last week and from that experience he distills this analysis - “Bucket #1 is companies who are so far underwater they have no hope of recovering anything. It’s just ‘throw the keys to the lender.’
Second bucket is, ‘I’m on the margin, I may recover if the market improves, but I’m in default and may or may not have any equity value left. I’m just going to negotiate as hard as I can with lenders, and hang on.
Third bucket is, ‘I’m actually willing to put more capital into the company, to preserve my equity’ and hang on.” Media Venture Partners’ Pryor says “Bucket #3 is the exception rather than the norm, but there are some of those companies.
The biggest basket is the second one, where equity negotiates with the debt. They’ll either be in bankruptcy or do it out of court. The companies will emerge with a more reasonable leverage level, and you can expect them to come out at 4-6 times [cash flow]. Then, buying and selling stations can be done strategically” – in other words, what markets do groups want to be in and not want to be in. Brian says “But we’ve got a long way to go before that.”