You can go down the list. Could be Romney. Could be Sam Zell. As long as it's not explicitly illegal, anything's fair game.
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Big Trouble in Limbaugh Land
by Richard Myers
Or, how Mitt Romney's former company steals elections
while enriching the few at the expense of the many. In 2006, Mitt Romney officially announced his run for president of the United States.
Also in 2006, Clear Channel, the largest radio network in the world, announced that it was being purchased and taken private by Bain Capital, the one time ( and perhaps still?) Mitt Romney-controlled private equity fund.
According to Sue Wilson, "local talk radio hosts and their guests and callers [use] our public airwaves ... to exclusively promote GOP candidates." This issue became abundantly evident during the Recall of Wisconsin Governor Scott Walker:
We discovered that each Right Wing Talk radio station in Milwaukee is giving about 80 minutes every day to the GOP side. Out of fifteen hours of programming, that doesn't sound like much, but it would cost between $34,000 and $68,000 for supporters of Tom Barrett and the Democrats to buy that time. That's $34,000-68,000 every single day. --Sue Wilson: Huffington Post, Putting Talk Radio on Trial at the FCC
Imagine that very significant advantage extrapolated throughout the country. Clear Channel is, in essence, the Fox News of networked radio.
It may not be a surprise that a company with such significant conservative propaganda value would be a takeover target for a private equity company like Bain Capital. It also should not surprise you then that such a company as Bain — once owned by one of the wealthiest men in the country, who just happened to be running for president — might simultaneously see that takeover target as a cash cow. If these two goals conflict — well, no one ever became filthy rich while mired in too great a concern for details.
Clear Channel is a conglomerate, but is principally two companies: the radio network division, and the outdoor billboard division. More than 97% of Clear Channel’s quarterly revenue comes from these two divisions.
Early this year, largely as a result of the Bain takeover, Clear Channel was in debt more than 19 billion dollars. Last March, Bain Capital took an additional 2.2 billion dollars out of Clear Channel, so the debt is now greater than 21 billion.
Big debt comes with harsh deadlines. Clear Channel has to come up with $500 million in debt payments by the end of 2013, a payment of $1.1 billion due in 2014, and then a much larger payment of $12 billion due in 2016.
One might expect that a conglomerate would necessarily be profitable in order to deal effectively with such debt. So far it appears that such speculation is flat out wrong. Clear Channel lost $4 billion in 2008, and another $4 billion in 2009. But by 2011 Clear Channel was making great strides, reducing its losses to a mere $302 million. The 2012 first quarter loss was $141 million. Loss in the 2012 second quarter was $28 million.
Why the continued losses? In spite of crushing debt, Clear Channel's radio division has been " splashing the cash" in "an attempt to rebrand itself as a hip digital music giant." Some analysts had already downgraded Clear Channel Outdoor Holdings, the Clear Channel billboard division, and recommended investment in their competition.
So Clear Channel has since decided to restructure $2 billion of its debt. This has been described as "kicking some debt down the road", meaning that all of the 2014 payments, and a small part of the 2016 payments, will now be due in 2019. The significant drawback to rescheduling this debt is higher interest payments, which have been estimated at an additional $100 million per year. And Moodys says that more of the 2016 debt will need to be rescheduled.
Now think about this circumstance. Mitt Romney's Bain Capital bought Clear Channel and financed their purchase with deep debt. Their corporate austerity requirements have forced layoffs, the most recent of which occurred on March 30 of 2012. That was just two weeks after Bain Capital raided Clear Channel's assets by forcing a two billion dollar dividend payment, paid for with a loan arrangement which prompted lawsuits. Just six months later, Clear Channel (as one of Bain Capital's piggy banks) finds it necessary to seek two billion dollars in debt relief (imagine that!) by "kicking the [debt] can down the road".
dailykos.com
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Sam Zell Must Face Tribune Employees’ Lawsuit Over Pension Plan
By Andrew M. Harris - December 19, 2009 00:01 EST
Dec. 19 (Bloomberg) -- Sam Zell, the real estate investor who took the Chicago-based Tribune Co. private in an $8.3 billion stock buyback two years ago, must face an employee lawsuit claiming he knowingly violated federal pension laws.
U.S. District Judge Rebecca Pallmeyer in Chicago rejected Zell’s request to dismiss the suit filed last year. The employees accuse Zell of working with board members and others who allegedly breached their fiduciary duty to the workers.
The judge, in a ruling posted Dec. 17 on the court’s Web site, said that Zell helped engineer the transaction that left Tribune with almost $13 billion in debt even if he wasn’t responsible to the Employee Stock Ownership Plan that privatized the newspaper and broadcasting company.
The company, owner of the Chicago Tribune and Los Angeles Times newspapers, filed for Chapter 11 bankruptcy protection last year. The employee stock ownership plan that acquired the shares in the buyback is a federally protected pension plan.
As many as 10,000 workers may have lost money as a result of how the shareholder buyout was executed, said Daniel Feinberg, an attorney for the employees in Oakland, California. While only six workers are named as plaintiffs in the suit, he said he will seek class-action certification to sue on behalf of other employees.
‘Misguided’ Deal
“This deal was misguided from the very beginning,” Feinberg said yesterday in a phone interview. “It was obvious from the start that this deal had a huge risk of insolvency because of the amount of debt.”
Pallmeyer dismissed claims against several Tribune board members, ruling they had delegated their fiduciary duty to Greatbanc Trust Co. The judge said in her ruling that Greatbanc, the trustee for the employee plan, must face the lawsuit.
Terry Holt, a spokeswoman for Zell, declined to comment.
Two lawyers for the Tribune and other defendants, David Bradford and Craig Martin, were said by their office to be travelling yesterday and didn’t immediately respond to e-mail messages seeking comment.
bloomberg.com |
