In what must be the most
ingenious method of avoiding paying debt, iHeartMedia -- which is carrying a
staggering debt load of $21 billion -- plans to buy its way into solvency. Or
buy some time, as the case may be.
According to The New York
Post, iHeart, formerly known as Clear Channel Communications, is planning to
convert most of the $2.4 billion in unsecured debt into equity. This in turn
will lower interest payments to the point where the company could actually break
even.
How can it convert debt to
equity? By buying it.
As near as I can tell, the
scheme appears to be akin to buying debt on the open market, similar to how home
loans get lumped together and then purchased by other companies. Only in this
case iHeart appears to be buying itself, and then using the “equity” it has to
do an end run on its balance sheets.
If it can convince enough
investors to go along and thus convert all the unsecured debt into faux equity,
iHeart could save $100 million in interest payments every year, putting the
company into the black instead of losing a predicted $50 million, $80 million
and $120 million in 2015, 2016 and 2017, respectively.
Now to find a bunch of
really stupid investors and convince them this is a good idea. Interestingly,
history is on the side of iHeart, as investors constantly make bone-headed moves
such as this. I mean, just look at Cumulus ... or iHeart ... or ...
As one source put it, the
move “definitely reflects risk and desperation.”
More Cinder
Mike Wagner, former
programmer of the original KRLA (now KDIS, 1110 AM) wrote to clarify a bit of
information on the dance club owned by former KRLA DJ and popular television
personality Bob Eubanks.
There were actually several
locations of Eubanks' teen nightclubs called the Cinnamon Cinder. And they were
the inspiration for a 1963 hit by the Pastel Six,” which like everything in life
can be found on YouTube (www.youtube.com/watch?v=7CWlyeuhz40)
“This info comes from the
You Tube page: ‘The Cinnamon Cinder was released by The Pastel Six (Bill
Meyers) in early 1963, and was a one hit wonder for the group. The Cinnamon
Cinder was also a chain of Los Angeles teen nightclubs started by KRLA DJ Bob
Eubanks, which soon spawned a TV show, The Cinnamon Cinder Show
(1963-65).’
“‘Acts performed live and
were usually backed by a resident band from one of the clubs ... North
Hollywood's Pastel Six were one of the most popular, and they got their chance
to record ‘The Cinnamon Cinder (It's A Very Nice Dance)’, written by Russ Regan.
The show was also known as Bob Eubanks' Hollywood Dance Time.’
“The house bands often
backed up such big name artists as Jackie DeShannon, Dick and Dede, The
Ronettes, Little Stevie Wonder, The Coasters, The Rivingtons, and Chuck Berry,”
said Wagner.
Tim Grobaty wrote of the
Cinder for the Long Beach Press-Telegram back in 2008, covering among other
things why it was such a success. “strict regulations,” he said, quoting from an
even earlier Press-Telegram story on the Cinder from 1963.
Those rules? No alcoholic
beverages were served, and people with alcohol on their breath were stopped at
the door. No youngsters under 18 were permitted. Single men past the age of 25
were strongly discouraged from seeking entrance. Girls were not permitted in if
they are wearing capris or shorts. Boys were barred if they wore T-shirts,
sweatshirts, club or school jackets, Levi's or tennis shoes.
According to Grobaty, rules
and regulations at the Long Beach traffic-circle location were enforced by the
club's manager, Mickey Brown, who was a former LAPD officer. My hunch is that
this kept the club safe, while still giving the kids the feeling of having their
own place ... and of course, an outlet for them to see their favorite
artists.
It lasted eight years, as
Grobaty wrote, “the Cinder closed when its wholesomeness had, according to a
Press-Telegram reporter, gone to seed.”
I’m trying to figure out
how, with his work at KRLA, later work with the Beatles, television programs and
more, how Eubanks had time to think!
Seasonal Sounds
From 6 a.m. December 24th
through 6 p.m. December 25th, JazzKNOB.org will present its annual 36-hour
Christmas programming, Sounds of the Season, highlighted by a reading of Twas
the Night Before Christmas by the late, great Chuck Niles. This special reading
will be presented six times throughout the holiday special: 6 a.m., noon and 6
p.m. on the 24th; midnight, 6 a.m. and noon on Christmas Day.
JazzKNOB.org is an
online tribute to former all-jazz radio station KNOB, licensed at the time to
Long Beach. It is now Spanish-language KLAX (97.9 FM).
///
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