Death of a Radio Giant; Fear of Technology

Two fascinating entertainment stories caught my eye today — if you have any interest in Entertainment, Technology or Digital Media, then go these out:

• Clear Channel Communication is teetering:

“Clear Channel, the nation’s largest radio station operator and an outdoor billboard company, last year became the biggest leveraged buyout ever in the media business, after it was taken private by Thomas H. Lee Partners and Bain Capital. Now its revenues are plunging and so is its cash flow, making it harder to meet the payments on the billions in debt accumulated in the process of buying out its public investors…

Clear Channel was on track to become the biggest default among media companies and therefore the biggest workout ever in the industry… The company’s options may be limited. Many financially pressed concerns have been able to persuade creditors to exchange debt for equity and thus avoid a default and a bankruptcy filing… The company has $16 billion of bank debt, on which it pays variable rates, and $6 billion more of junior debt. The holders of the junior debt and the equity holders would absorb the first loss in the event of a bankruptcy, so the banks have some protection and less incentive to negotiate.”

That’s a shame . . .

These guys destroyed radio, and deserve to die. Its a shame most of the executives who put together this ugly behemoth have long since moved on. They should have been waterboarded.

• RealNetworks’ CEO Rob Glaser throws a fire bomb at technophobic entertainment execs:

“Hollywood is missing out on a marvelous opportunity, says RealNetworks’ CEO Rob Glaser. Real has presented the film industry with a means to inject renewed interest in DVDs, which is waning, Glaser said minutes after testifying at a hearing in federal court on Wednesday. Real has developed two different kinds of software, RealDVD and Facet, that it says streamlines the movie-viewing experience by enabling owners to duplicate DVDs and store the copies on hard drives.

But the studios, much like they’ve done since the Sony Betamax case, are resisting technological advancement and have rejected the opportunity Real offers, Glaser said. He thinks he knows why.
“Some of the studios are very progressive,” said Glaser, who founded the public company in 1994. “Some of them are scared. It’s been my experience that often the scared voices overwhelm the progressive voices.”

Fascinating stuff . . .

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Previously:
Radio’s Wounded Business Model (July 20th, 2004)
http://www.ritholtz.com/blog/2004/07/radios-wounded-business-model/

iPod shuffle = new radio ? (January 15th, 2005)
http://www.ritholtz.com/blog/2005/01/ipod-shuffle-new-radio/

Sources:
Radio Giant Faces Crisis in Cash Flow
GERALDINE FABRIKANT
NYT, April 29, 2009
http://www.nytimes.com/2009/04/30/business/media/30clear.html

Real’s Glaser: Some studio chiefs ‘scared’ of tech
Greg Sandoval
C.NET April 29, 2009 4:31 PM PDT
http://news.cnet.com/8301-1023_3-10230578-93.html?tag=nl.e703