Thursday, November 16, 2006

Looking to buy a 'little' debt?

Clear Channel plans to sell 448 of its 1,150 radio stations, all outside of the top 100 markets and the 42-station Television Group as well. The total revenue of these made up less than 10 percent of the company's revenues last year. And an investor group led by Thomas H. Lee Partners LP and Bain Capital Partners LLC is aquiring the country's biggest radio station owner for about $18.7 billion and assuming about $8 billion in debt.

Radio stocks were once "stock market darlings," but has been rapidly declining in value, especially since 2000 when "competition from the boom in portable listening devices like Apple Computer Inc.'s iPods and the emerging growth of satellite radio" kept it difficult to win listeners back.

Reader's Digest is being bought for $1.6 billion by a private investment group led by Ripplewood Holdings LLC and will assume about $776.3 million in debt. Despite a few recent successes, overall Reader's Digest has been struggling in the competition against other media and the Internet, such as

Both companies saw a jump in shares after aquisition announcements were made.

What do you think this means, if anything? Where is radio and long-standing traditions like Reader's Digest in our media future?

Posted by AL


At Thursday, November 16, 2006, Anonymous aj said...

I'm not sure what all this means, but I think its safe to say the media landscape is changing, and we'll have to be ready to adapt.

Media outlets are expected to turn a profit now, which I think means that long-standing traditional publications will have to drastically change their look/approach.

At Saturday, November 18, 2006, Anonymous MG said...

well.. that is definitely huge news on the Readers Digest news. With regards to Clear Channel, I'm not as suprised that the profits were so low for the stations that were sold. I'm amazed conventional radio has lasted as long as it has. Between commercial free satellite radio, and iPod - podcasts (which are all free) and other portable MP3 devices... people have the chance to program their content and it doesn't surprise me that people would rather select their content rather than have someone do so from a Clear Channel server. Great post nevertheless.

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