NY Post: Media In A Muddle
October 14, 2008 at 5:38 AM (PT)
Ongoing fallout from the credit crisis could mean tough times ahead for media companies carrying heavy debt loads, writes TODAY's NEW YORK POST. Trouble in the credit markets is sparking fresh concerns that highly leveraged players in radio, TV and other advertising-dependent businesses will struggle to keep pace with their debt covenants and payment schedules as the economy sinks further.
Likewise, many companies expecting to favorably refinance big debt packages are in for a rude awakening, Wall Street sources said. "Those days are over," one insider said.
"Your cost of borrowing is going to be significantly more than it was a year ago. Some companies are going to have significant problems," said HAROLD VOGEL, an independent media analyst.
Companies that loaded up on debt late in the leveraged buyout boom -- including TRIBUNE CO., UNIVISION COMMUNICATIONS and CLEAR CHANNEL COMMUNICATIONS -- are drawing the most concern in the current climate. TRIBUNE is carrying a debt load of more than $12.5 billion as of AUGUST, while UNIVISION's debt load exceeds $10 billion and CLEAR CHANNEL's totals $8 billion.
"Those are the companies that investors are keeping a close eye on," said BISHOP CHEEN, an analyst with WACHOVIA SECURITIES, who is predicting a looming shakeout among media companies, hastened by the credit crisis.
Radio is viewed as particularly vulnerable, sources said.
WESTWOOD ONE, which produces news, talk, traffic and sports programming for radio stations, yesterday said it is in talks with banks and bondholders about refinancing or extending the maturities of $85 million in debt due next year, according to BLOOMBERG.