I have been saying for years that my former industry is committing suicide. Five companies own 80% of the commercial radio stations in this country. They are all programmed by a small group of consultants and they nearly all suck.
This company's debt began back in the 90's when the government erased ownership limits. They WAY overpaid for stations as they built their empire. At the time, stations were generally worth 2.5 times their trailing cash flow, which was the total gross revenue for the previous 12 months. If a station had a trailing cash flow of $2 million, it was worth no more than $5 million.
This and some other companies paid WAY more than this. I remember sitting around with a bunch of radio friends in Florida, including a station owner, wondering how in the world do these companies plan on making money? In a steady market, they couldn't. Then thanks to the coming digital age and the Internet, the radio advertising pie began to shrink.
Things starting getting tight. I began thinking about what life would be like after radio. Then this and other companies started WAY overspending, including over-paying marginal talent. (yes, I'm talking about you WSIX) So they went more in debt.
I'd love to talk about the stupidity of bringing in an over-hyped country radio "personality" to take over for a retiring radio legend. You brought in a guy from Austin and hyped the hell out of it. Umm..... if you knew anything about Nashville, Big Corporate Radio, you would have never mentioned this guy came here from Austin. You see, Nashville doesn't like Austin. Austin presents a threat to Nashville. A major threat, You turned off half the market before the guy even got here.
Now, several years later, look at your ratings, WSIX. YOU SUCK. You're a middle of the pack station that is getting killed by other stations. That's how a company gets to be $20 billion in debt.
I told you so...
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