Poor i-heart radio, formerly Clear Channel, the force behind Rush Limbaugh, Sean Hannity and most of the other right wing liars that have polluted our nation's politics for the last couple of decades. And it may mark the end of the obscene $40 million a year paychecks that Limbaugh has gotten as a reward for lying the American people into disaster. It seems you should be careful which of your fellow right wingers you get involved with, because they are not always dedicated solely to the best interests of your company. From a very good article at Media Matters, the following excerpts, then of course my own cranky take on the whole thing:
"During the late 1990s and early 2000s the company, feasting on the fruits of media deregulation, gorged itself with profits. (It also bullied the music business for years.)
Since then, not so much. And what a brutal ride it’s been for investors:
Clear Channel stock price, January 2000: $90.
Clear Channel stock value, April 2007: $39.
iHeartMedia stock price, July 2011: $8.30.
iHeartMedia stock price at close of yesterday: $1.15.
The company hasn’t reported a profit since 2007.
How bad was the deal? Monumentally bad:
In 2007, the company, then called Clear Channel, reported a net income of $939 million. In the years since the LBO, the company has reported losses of between $220 million and $4 billion per year. For 2015, it reported a loss of $738 million.
Today, the interest paid on iHeartMedia’s massive debt gobbles up earnings. “Revenue last year was $6.5 billion. A $1.74 billion interest expense drove a net loss of $661 million”Can you spot the glaring error in the above? Here it is:
"How bad was the deal? Monumentally bad"
Bad for i-heart, maybe, and bad for Rush (I know we are all going to be crying over that,) but the important thing is that it was a monumentally good deal for Bain Capital, its creator (Mitt Romney-remember him?) and all of the other corporate vampires riding the Bain express train to riches. For, this deal represents exactly the way that Bain Capital, and all companies like it, do business, which is to forcibly take over management of a company, and then use their position to take out huge loans in the company's name, the largest part of which they transfer to themselves, leaving the company a shattered, broken remnant of its former self.
In the process, tens of thousands of hard working Americans lose their jobs, and monsters like Romney use their privileged position in society to end up worth hundreds of millions of dollars.
Don't believe me? During the 2012 election, I wrote a couple of fairly long analyses of several companies, and what happened to them when they ran into Bain Capital. You can find these posts here and here, where you will discover that what is happening to i-heart is not a "bad deal," but the deliberate despoiling of a large, successful company, an act which should be a major crime.
So in brief, Ronald Reagan, in one of the most corrupt acts in U.S. history, used the swan song of deregulation to play a gigantic trick on the American people, allowing practically all of our mainstream media to be bought up by large corporations. Then, through even more deregulation, he allowed financial parasites like Bain Capital to plunder the wealth of these corporations. In this case, it leaves us with one more corporate basket case, who knows how many people who have lost jobs that they were doing well, and a couple more billions in the hands of monsters like Mitt Romney.
In case you have not figured it out yet, people, that is not a "bad deal." It is exactly the way the economy is supposed to work, when Republicans and the rich sociopaths that own them control the country.