Monday, October 02, 2017

Another Sign the FCC is Going in the Wrong Direction

This new era of consolidation is getting the attention of one of the men who destroyed the radio industry. He sees a chance to come back and destroy it some more (by lining his own bulging pocketbook). From Tom Taylor's NOW column...

Would the Mays family and “Red” McCombs buy back iHeart? Their hometown San Antonio Express-News says McCombs “picked up the phone and called his friend and former business partner Lowry Mays a few months ago.” Lowry says Red suggested that perhaps they could team up again and buy back the former Clear Channel. McCombs recalls it this way – “If it ends up in refinancing mode, I told [Mays] that I would have some interest in it.” How did Mays react? He said “Count me in.” Both parties say they haven’t gone beyond that stage. But Clear Channel made them billions of dollars, and Red, also a wealthy car dealer and investor, says “I might make a play for it...In a heartbeat, I would go back into a venture with the Mays family in radio.” As the Express-News rightly says, “iHeartMedia’s financial troubles are embedded in a 2008 leveraged buyout” led by Bain Capital and Thomas H. Lee Partners. By 2008, nearly a year after the deal was struck the economy was crashing and there were all kind of legal threats to force this deal to the finish line. In the end it was the Mays family and McCombs who came out on top – not the private equity companies. Even a hint that they’d come back in – presumably buying back the company for much less money – is surprising. iHeart’s currently in hock for about $20.4 billion.