HAS FATS MORTALLY WOUNDED CLEAR CHANNNEL?

Fats Limbaugh is on many of Clear Channel's stations and if his shows aren't bringing in as much money as pre-Fluke, then maybe Clear Channel is in big trouble...

Wednesday, December 5, 2012

radioinfo | December 5, 2012

Clear Channel Debt Issue Sparks Speculation of Sell-Offs, Mergers and More.

The result of the recent report by Moody’s Investors Service that Clear Channel’s 2016 debt payment of a little more than $10 billion has industry watchers predicting the radio giant will either have to merge with another company or begin to sell off assets – or both – in order to make the 2016 payments. The Moody’s report suggests Clear Channel should have no problem making the next three years’ payments — $312 million in 2013, $1.3 billion in 2014, and $250 million in 2015. It’s the $8.2 billion and $1.9 billion it will owe in 2016 that has Moody’s concerned. It contends that for Clear Channel to refinance that debt, it is going to have to see marked improvement in performance over the next several years. Moody’s says CC will likely need to see revenue go up by 2% in 2013, 4% in 2014 and 4% in 2015. Based on recent performances by most groups in the radio industry, those 4% figures are going to be a challenge to attain. Moody’s analyst Scott Van Den Bosch states, “The possibility of a restructuring or a distressed exchange remains high. Efforts to avoid a restructuring and refinance or extend its debt load will likely depend on the receptivity of the financial markets and moderate underlying interest rates.”