This ill-conceived way for the Mays family to have one more payday has been teetering on the brink for well over a year.
I say teetering because the economy and the radio industry has been declining since the ink dried on the agreement.
The $19.5 billion price was wrong from the start. You'll remember Clear Channel tried to do the deal at a lesser price than $39 a share, but was forced to up it.
All during the tough times, Clear Channel tried to keep Thomas H. Lee and Bain Capital Partners engaged in the buyout. I wondered aloud why Lee and Bain weren't renegotiating the terms of the deal when the spread between the buyout price and real price got to be as much as $10 -- even with arbitragers considered.
I've said it many times -- Lee and Bain don't need a radio company in a world where radio is in a decline. That the value of buying Clear Channel might be in selling as much of it as they can.
Isn't that the game plan for these buyout artists anyway?
Randy Michaels and Sam Zell came to mind because they are putting together the best radio team in the industry that runs only newspapers and TV stations.
Hello?
Zell is a buyer.
But Zell's M.O. is to buy at a discount and $39 is not much of a discount.
Zell is a buyer.
If the Mays want to sell upon the collapse of the Lee and Bain deal, they'd best not expect anyone else to line up and take the stations off their hands except for -- Zell.
At his price.
The Mays family would also have to swallow its pride in selling to a company that is run by the guy they removed from running Clear Channel. Show me the money. Forget the past. Suddenly everything is okay.
It would be so much easier if the deal went through and Lee and Bain can sell to Zell -- something I have speculated on for months. Why else were they not aggressive in trying to renegotiate the sale price.
Randy Michaels put the Clear Channel clusters together. He would no doubt enjoy the irony of stealing the Clear Channel stations for less than what they could have been worth -- perhaps if he had remained at the helm.
Nothing may happen for a while once the sale finally blows. What's next isn't pretty.
Unless you are a lawyer.
The Journal reports that neither side seems to want to get this deal done -- although anything can happen. The Journal believes both sides are building a legal record for the inevitable litigation that is likely to follow.
What? Clear Channel? Litigation?
The New York Times reports that Lee and Bain and Clear Channel may take this battle to court to force the banks that are balking to complete the original deal.
For the poor folks who have to keep running these excellent outlets under tenuous circumstances, they can expect cutbacks and economies of scale to operate the infrastructure in an industry that is ice cold and headed into the freezer. Tough times for Clear Channel employees. More shortcuts and layoffs.
The Journal reported "The sponsors do not want to do this deal," said one person involved, referring to the private equity firms. "No one wants to do this deal except for the seller."
Ya think?
Randy has waited a long time in Siberia. His boss has money and arguably access to money to buy some or most of the stations for which Clear Channel cannot find a buyer.
It's a strange comeuppance.
These two wacky guys may be the only option for Clear Channel to get out of the industry that they helped to ruin.
That's why many of their employees are secretly putting this curse on Clear Channel --
Go to Zell.
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