Acceptable registrations in the queue through March 16 at 11:00a ET have now been activated. Enjoy! -M.W.

Terms of Use have been amended effective October 6, 2019. Make sure you are aware of the new rules! Please visit this thread for details: https://www.mibuzzboard.com/phpBB3/view ... 16&t=48619

Covid 19 Media Layoffs Begin - Entercom

Discussion pertaining to Detroit, Ann Arbor, Port Huron, and SW Ontario
RadioRat
Posts: 48
Joined: Sat Sep 12, 2015 10:15 pm

Re: Covid 19 Media Layoffs Begin - Entercom

Post by RadioRat » Sat Apr 11, 2020 2:24 pm

Cumulus has to be sharpening the guillotine. Those who survived bankruptcy one might not make it through two. Blaine Fowler at DVD would seem like a prime pink slip candidate. With revenues down at least 40 percent, the salary of one of the longest-tenured morning guys in the market is gonna look like an albatross to the bean counters real soon.



User avatar
audiophile
Posts: 8546
Joined: Sat Dec 04, 2004 9:21 pm
Location: Between 88 and 108 MHz.

Re: Covid 19 Media Layoffs Begin - Entercom

Post by audiophile » Sat Apr 11, 2020 2:42 pm

The trades reported 80% of weekly pay, and 3 weeks furlough over the next 15 weeks. That saves Cumulus 40% on payroll.


Ask not what your country can do FOR you; ask what they are about to do TO YOU!!

RadioRat
Posts: 48
Joined: Sat Sep 12, 2015 10:15 pm

Re: Covid 19 Media Layoffs Begin - Entercom

Post by RadioRat » Sat Apr 11, 2020 2:50 pm

I still refuse to believe strong Entercom needs to axe talent but a company straight out of bankruptcy can get by on furloughs...



User avatar
Rate This
Posts: 13968
Joined: Wed Jan 08, 2020 12:17 am

Re: Covid 19 Media Layoffs Begin - Entercom

Post by Rate This » Sat Apr 11, 2020 2:58 pm

RadioRat wrote:
Sat Apr 11, 2020 2:50 pm
I still refuse to believe strong Entercom needs to axe talent but a company straight out of bankruptcy can get by on furloughs...
Axing talent keeps it strong... the company fresh out of bankruptcy has little debt to weigh it down...



RadioRat
Posts: 48
Joined: Sat Sep 12, 2015 10:15 pm

Re: Covid 19 Media Layoffs Begin - Entercom

Post by RadioRat » Sat Apr 11, 2020 3:19 pm

Cumulus still has a heavy debt load. It isn't what it once was but they weren't dealing with a cratering of their revenues the last time they went into bankruptcy either.



User avatar
audiophile
Posts: 8546
Joined: Sat Dec 04, 2004 9:21 pm
Location: Between 88 and 108 MHz.

Re: Covid 19 Media Layoffs Begin - Entercom

Post by audiophile » Sat Apr 11, 2020 4:39 pm

Rate This wrote:
Sat Apr 11, 2020 2:58 pm
RadioRat wrote:
Sat Apr 11, 2020 2:50 pm
I still refuse to believe strong Entercom needs to axe talent but a company straight out of bankruptcy can get by on furloughs...
Axing talent keeps it strong... the company fresh out of bankruptcy has little debt to weigh it down...
IIRC, $897 Million still owed.


Ask not what your country can do FOR you; ask what they are about to do TO YOU!!

User avatar
Rate This
Posts: 13968
Joined: Wed Jan 08, 2020 12:17 am

Re: Covid 19 Media Layoffs Begin - Entercom

Post by Rate This » Sat Apr 11, 2020 7:57 pm

audiophile wrote:
Sat Apr 11, 2020 4:39 pm
Rate This wrote:
Sat Apr 11, 2020 2:58 pm
RadioRat wrote:
Sat Apr 11, 2020 2:50 pm
I still refuse to believe strong Entercom needs to axe talent but a company straight out of bankruptcy can get by on furloughs...
Axing talent keeps it strong... the company fresh out of bankruptcy has little debt to weigh it down...
IIRC, $897 Million still owed.
What was it going in?



RadioRat
Posts: 48
Joined: Sat Sep 12, 2015 10:15 pm

Re: Covid 19 Media Layoffs Begin - Entercom

Post by RadioRat » Sat Apr 11, 2020 9:54 pm

https://finance.yahoo.com/quote/CMLS/ba ... eet?p=CMLS

They have $1.3 billion in debt. That's against a much smaller operational footprint than in the past and revenues have been cut in half from Covid. The expensive talent who survived 2018 will be on the chopping block real soon.



User avatar
MWmetalhead
Site Admin
Posts: 11877
Joined: Sun Oct 31, 2004 11:23 am

Re: Covid 19 Media Layoffs Begin - Entercom

Post by MWmetalhead » Sun Apr 12, 2020 10:04 am

The $1.3 billion figure is total liabilities. Actual debt (monies borrowed from lenders, bond holders, etc.) is just over $1.0 billion. Still not good, since prior to the current recession, the company's per annum EBITDA run rate was about $200 million.

Cumulus didn't eliminate enough debt in its bankruptcy. It's debt upon emergence - which was, in fact, $1.3 billion at the time - in my view was equal to 100% of enterprise value. I realize the Stipulated Value shown in the bankruptcy documents was some fakakta number like $1.7 billion or $1.8 billion, but in my view that was a total B.S. number.

The fact the pre-petition senior secured debt holders - who now own the vast majority of shares in "new" Cumulus - consented to such a high debt load as a multiple of pro forma EBITDA in a flat to declining industry suggests to me they were confident in Cumulus' ability to divest assets to raise cash in order to prepay debt.

To Cumulus' credit, they did prepay a good chunk of debt via asset sale proceeds and free cash flow from operations in 2019. However, that momentum has now come to a grinding halt. Because of the election and great economy coming out of 2019, all expectations were for 2020 to be a good year from a revenue standpoint. It now is shaping up to be an ugly year!

Dragging Cumulus through another bankruptcy so soon would serve zero purpose. Look for lenders to amend financial covenants, as needed, to keep Cumulus out of bankruptcy. As long as Cumulus is able to stay liquidity neutral, lenders will be tolerant.



User avatar
RayQix
Posts: 360
Joined: Tue Jan 18, 2005 9:15 am
Location: USA
Contact:

Re: Covid 19 Media Layoffs Begin - Entercom

Post by RayQix » Sun Apr 12, 2020 2:28 pm

This is happening everywhere that’s still working, unfortunately.

The question is: what companies will survive this Crisis and come out okay?


Sent from my iPhone using Tapatalk



RadioRat
Posts: 48
Joined: Sat Sep 12, 2015 10:15 pm

Re: Covid 19 Media Layoffs Begin - Entercom

Post by RadioRat » Sun Apr 12, 2020 4:31 pm

I don't think they will go back into bankruptcy. I just expect them to trim the expensive legacy talent that survived the first bankruptcy.

And when you lose 40-75 percent of your revenue, all liabilities become debt. Hence the furloughs.



RadioRat
Posts: 48
Joined: Sat Sep 12, 2015 10:15 pm

Re: Covid 19 Media Layoffs Begin - Entercom

Post by RadioRat » Tue Apr 14, 2020 7:31 am

Groupon revenue down 49%. Hard to imagine Detroit radio stations are doing better. I would guess significantly worse, 60-70%.

https://www.americaninno.com/chicago/in ... 3000-jobs/



ftballfan
Posts: 875
Joined: Thu Sep 17, 2009 6:38 pm

Re: Covid 19 Media Layoffs Begin - Entercom

Post by ftballfan » Tue Apr 14, 2020 8:50 am

MWmetalhead wrote:
Sun Apr 12, 2020 10:04 am
To Cumulus' credit, they did prepay a good chunk of debt via asset sale proceeds and free cash flow from operations in 2019. However, that momentum has now come to a grinding halt. Because of the election and great economy coming out of 2019, all expectations were for 2020 to be a good year from a revenue standpoint. It now is shaping up to be an ugly year!
2020 would be even worse for revenue if it wasn't an election year!



Post Reply Previous topicNext topic