Monday's Radio & Media News - May 13, 2013

Moody's Issues 'High Credit Risk' Rating to Clear Channel Term Loan Moody's Investors Service, expessing concern, has assigned a Caa1 rating -- "poor quality and very high credit risk" -- to Clear Channel's proposed $1.5 billion "term loan D." Clear Channel's "Corporate Family Rating" (CFR) is unchanged at Caa2 and Moody's outlook remains Stable. Thursday (May 9) we reported, "Clear Channel Communications says it is seeking extensions of its existing term loans as part of its efforts to optimize its overall capital structure, and continuing to explore a diverse array of other alternatives including, but not limited to, transactions which would extend maturities of its other debt, whether through a debt-for-debt exchange or other financing transaction. As we've previously reported, Clear Channel is facing large debt payments due over the next several years -- including $4.5 billion due next year -- and some analysts have speculated the company may not be able to make all of the payments due, and some have suggested the comapany might enter into default." Moody's says, "The exchange offer follows the company's issuance of PGN notes and a draw down on its ABL facility in February 2013 to repay its TLA facility that was scheduled to mature in 2014. The transaction would reduce the amount of term loans maturing in January 2016 from $8.2 billion to $6.7 billion. $1.6 billion of cash pay and toggle notes mature in August 2016 and an additional $250 million of legacy notes mature in December 2016. While the transaction extends Clear Channel's debt maturity profile, it is expected to increase interest expenses by about $35 million annually, although final pricing has not yet been determined." Moody's adds, "Clear Channel's Caa2 (CFR) reflect the very high leverage levels of 11.4x on a consolidated basis (excluding Moody's standard lease adjustments) and $8.6 billion of debt due in 2016 (pro-forma for the proposed exchange offer). The ratings also include weak free cash flow and interest coverage of 1.4x which will be further pressured by higher interest rates from future refinancings or extensions of its debt maturities. While the company has made progress extending its debt maturity profile, more progress will be needed and the anticipated increase in interest rates could be material. Even if Clear Channel is able to refinance its 2016 maturities, the company will remain vulnerable to a slowdown in the economy given the heightened sensitivity that its radio and outdoor businesses have to economic conditions. The combination of higher interest rates from a refinancing and lower EBITDA in the event of a future economic downturn could materially impair its interest coverage and liquidity position. In addition, there are secular pressures on its terrestrial radio business that could weigh on results as competition for advertising dollars and listeners are expected to increase going forward. Also incorporated in the rating, is the expectation that leverage levels will remain high over the rating horizon compared to the underlying asset value of the firm." iHeartRadio Surpasses 30 Million Registered Users Clear Channel Media and Entertainment's iHeartRadio today announced that it has surpassed 30 million registered users. "In achieving this milestone in less than two years since its launch, iHeartRadio becomes second only to Instagram as the fastest-growing digital service in Internet history -- a growth rate two times faster than Facebook. Since iHeartRadio listeners are not required to create an account to stream broadcast radio stations, the number of registered users reflects only a small snapshot of the service's overall reach, particularly given the 175 million downloads of the iHeartRadio mobile app and more than 60 million monthly uniques across its digital network." iHeartRadio is "Clear Channel's app and online destination for 1,500 radio stations and music discovery." Says Clear Channel's announcement, "iHeartRadio's recent placement on the iTunes Top 20 All-Time Free Apps list and coupled with its rapid growth points to a larger trend in consumer listening habits. As smartphones and tablets become more ubiquitous, easy-to-use, free applications like iHeartRadio provide consumers with access to their favorite music regardless of whether they're at home or on the go. iHeartRadio's additional add-in features like local weather and news, as well as “Perfect For” curated playlists, appeal to a diverse audience and have driven overall adoption of digital music, even as research shows that record numbers of consumers are also tuning in to their favorite over-the-air broadcast stations. Recent numbers from Katz Radio Group reported that broadcast radio comprises 92.4% of all audio listening, with digital claiming a 7.6% stake, indicating that iHeartRadio is bringing increased incremental listening to Clear Channel's 243 million monthly broadcast listeners." CCME President of Digital Brian Lakamp tell us, "iHeartRadio sets the standard for how radio continues to fit into people's everyday lives. This latest milestone is another clear indication how our full-featured iHeartRadio experience resonates with tens of millions of people – with more coming every day. Being able to draw on Clear Channel's unparalleled range of resources allows us to continually innovate and improve on the user experience, while giving listeners access to both live radio and custom stations. When you combine this with the strong promotional power of Clear Channel's broadcast properties across the nation, iHeartRadio is well-positioned to continue or even surpass our current adoption rate.” We're told that "iHeartRadio reached 20 million registered users faster than any digital service in internet history. It continues to be the No. 1 digital radio service, offering listeners instant access to more than 1,500 of the nation's most popular live broadcast and digital-only radio stations from more than 150 cities, plus user-created Custom Stations inspired by favorite artists and songs. In addition to Clear Channel's 850 radio stations, iHeartRadio also includes a number of other radio groups, such as Univision, Cumulus, Greater Media stations, WNYC, EMF's Contemporary Christian Air1 and KLove stations, college radio, Cox, Emmis, Salem and others. With a library of more than 15 million songs and 400,000 artists, iHeartRadio's Custom Station feature offers listeners more music than any other service available." Mike Huckabee: 'I Hope to Continue Radio Show' Conservative Talk host Mike Huckabee says he has no intentions of discontinuing his syndicated radio show, despite reports that he might quit it. Huckabee says he "hopes" that "we're going to continue right on." Last week, we reported that the former Arkansas governor and onetime presidential candidate ("and rising media personality") was "contemplating his future, including the return on investment of his year-old syndicated radio show." That was based on an interview with Arkansas Business. The follow-up comments come from a later interview with Newsmax, in which Huckabee adds, "That's my plan and my hope and so there's nothing to report other than I'll be on the air today and next week and, as far as I know, for the long term to come. I've enjoyed it. It's been a terrific outlet for me." In our May 7 report, we noted: "Those reporting radio and media news are using headlines such as 'Are Mike Huckabee's Radio Days Numbered?' and 'Is Huck Done With Radio Already?' Arkansas Business uses the more benign headline, 'Mike Huckabee Talks TV, Radio Career, Mulls Political Future'." And often overlooked was the talker's original comment that "I know we will" -- after telling Arkansas Business, "Within the next month, I'll decide if I want to continue it or not," referring to the radio show syndicated by Cumulus Media. "The Mike Huckabee Show" was launched just over a year ago (April 2012) on Cumulus and currently airs on more than 200 stations in 44 states opposite Rush Limbaugh's Premiere-syndicated show. End of the World for Harold Camping's Family Radio? Harold Camping's predictions about the end of the world were (obviously) proven wrong, but it may soon be the end of his Family Radio's world. Reports (new prophecies?) now circulating note that Family Radio's net worth has dropped from $135 million at the beginning of 2007 to $29.2 million at the end of 2011 -- despite receiving $85.2 million in donations during that time. According to Contra Costa Times, "former and current insiders" claim the company "mishandled" the sales of WFME-FM, Newark, NJ, in the New York City market; WFSI-FM, Annapolis, Maryland-Washington DC; and WKDN-FM, Camden; NJ-Philadelphia -- getting "far less than they were worth." The sources also allege the company owes millions of dollars in loans from listeners -- and, since Camping's failed predictions of the end of the world (as we know it, at least), Family Radio has been pelted with multiple requests from California's Attorney General for investigation of the station sales and handling of donations. Camping's former right-hand man Matt Tuter tells Contra Costa Times that Camping has long told him that when the evangelist dies, he wants the company to die with him. Says Tuter, Camping "was very specific he did not want [Family Radio] to continue." He noted that the controversial evangelist told him, "God raised up Family Radio just as a platform for me'." Tuter says, though, the sales of the three major market FM stations was already the beginning of the end for Family Radio. "You eliminate those three (FM stations) and, ultimately, the rest of it dies," said Tuter, who was fired last year. "I believe they are killing it off." Board member and current company operator Tom Evans says that while the company is experiencing the same troubles as other nonprofits in the weak economy, the company's financial problems aren't as serious as alleged. Former Biloxi Radio Host Gets 30 Years in Child Exploitation Case Former Country 'Kicker 108" WZKX-FM, Biloxi, Mississippi, midday host Bob Dever has been sentenced to 30 years in prison, without parole, on two counts of exploitation of a child. Last summer we reported that Dever had been fired by the station following his arrest on a charge of sexual exploitation of a child, after allegedly leaving sexually explicit messages at a public park restroom seeking adults to share children for sex. Harrison County Circuit Judge Roger Clark sentenced Robert Jordan "Bob" Dever, 51, on the charges to which he pleaded guilty in March following a requested presentence investigation, which showed he had no criminal history. Biloxi Police Sgt. Donnie Dobbs, who specializes in cybercrime investigations, linked Dever to the notes and found child porn had been downloaded and shared through an IP address assigned to Dever, reports SunHerald.com. A search of Dever's home in Gulfport led to the discovery of more than 200 files containing pornographic pictures and videos of children. Mississippi state law requires Dever serve his full prison term with no probation or parole. He also must register as a sex offender after his release from prison. Triton Digital 'Joins Fight to Advance Streaming Audio': Becomes Member of NARM and digitalmusic.org Triton Digital announces its membership in NARM and digitalmusic.org. "These memberships mark Triton’s commitment to further progress the digital audio industry," says the announcement. "NARM, the trade association for the business of music, strives to bring together all facets of the industry, including physical, digital, and mobile outlets as well as gaming, applications, merchandise, video and other ways music is monetized, and digitalmusic.org is the home of NARM's digital initiatives. Together, they advocate, educate and organize on behalf of the entire digital music ecosystem. As a member, Triton Digital will be alongside companies such as Spotify, iTunes, Google Play, Amazon, and Microsoft." Says NARM President Jim Donio, "At NARM, our goal is to advance the promotion of music by providing our members with insights and education to support their business models. Triton Digital is a key addition to our organization, as they are a major technology provider to a number of our established members. We are thrilled to welcome them aboard." Triton Digital COO Mike Agovino tells us, "We are elated to be members of NARM and DMO. We are in exceptional company and look forward to working as one to shape and transform the digital music industry through innovative technology and meaningful connections." Established in 1958, NARM (National Association of Recording Merchandisers) is the trade association for the business of music, "providing the central platform for the discussion of industry-wide concerns, spearheading the implementation of initiatives to promote music commerce, and advocating for common interests." And digitalmusic.org is the home for the digital initiatives of NARM. NPR Expands Latin American and Caribbean Coverage NPR News and member station WLRN-FM, Miami, announce a joint effort to expand coverage of Latin America and the Caribbean with the opening of an NPR bureau in Brazil and the creation of a WLRN Americas correspondent based in Miami. WLRN-FM has also expanded its existing partnership with The Miami Herald and El Nuevo Herald to include coordinated coverage of the region. Those moves, combined with NPR's Mexico City bureau, we're told, "mark a commitment by NPR and WLRN-FM to deepen their news reporting from this increasingly important part of the world." With the coverage expansion, Lourdes Garcia-Navarro takes on a new role as NPR's South America correspondent based in Sao Paulo; Tim Padgett, former Latin America bureau chief for TIME magazine, joins WLRN-FM. According to a news release, the NPR and WLRN-FM collaboration allows the organizations to bring audiences more stories of both regional and national interest." The WLRN-Miami Herald partnership will include seven reporters and three editors dedicated to coverage of Latin America and the Caribbean, one of the largest news teams currently covering the region. "We're thrilled to be back in South America. Brazil's growing global significance makes that country the perfect base for us," says NPR SVP of News Margaret Low Smith. "With that country's rich culture, environmental wealth, vast agricultural output and massive oil reserves, there will be no shortage of important and fascinating stories to tell." WTOP/Washington Website Back to Normal After Cyber Attack WTOP.com and FederalNewsRadio.com are both again available to all Internet users following resolution of hackings of the websites of Hubbard Radio WTOP-FM, Washington DC, and sister "Federal News Radio" WFED-AM. As we reported May 8, the attacks affected visitors using Internet Explorer, but not other browsers. Hubbard Radio tells us that when the attacks were discovered, an investigation was launched immediately, the malicious code was removed, additional security measures were installed, and federal law enforcement officials were notified of the incident. Says Hubbard Radio SVP and General Manager Joel Oxley, “Getting the websites back up and running safely for all users has been our top priority. We take our users’ privacy very seriously, and we have taken steps to prevent similar occurrences. We apologize to our user community for any inconvenience that this incident has caused.” Access to the websites from IE browsers was blocked to allow for a careful examination of how site security was compromised. "We have found and eliminated the vulnerabilities that were exploited," says Hubbard Radio's DC Director of Information Systems John Spaulding. "During the cyber attack, it is possible the database of WTOP.com and FederalNewsRadio.com email users may have been compromised. However, we have no evidence that any log-in information was actually acquired by the hackers,” says Spaulding. Now the passwords for all registered users and users who receive breaking news and daily headline emails from both websites have been reset. Those users have been contacted directly, informed of the need to reset their passwords. Neither WTOP.com nor FederalNewsRadio.com collect or store social security numbers or credit card information. Conclave Learning Conference Names Keynote Speaker Talkers Publisher Michael Harrison is named a keynote speaker at Conclave Learning Conference 38 on July 18 at 9am. Conclave Executive Director Bob Shannon says of Harrison, "A visionary, an inventor, a trailblazer, and a writer of powerful words and ideas. Michael is all of these things and more, and the Conclave is very lucky to have him on our teaching faculty this year." Says Harrison, "It is an honor to be involved with such a positive organization and be a part of its mission to educate and inspire the upcoming generation of radio broadcasters. I can't think of a better use of all these years of experience that I have been blessed with attaining in such a wonderful industry." Harrison will present "Radio in the Digital Age: Where Does Talent Fit In?" We're told it will be "a comprehensive yet fast-paced overview of the state of broadcast radio and its integration into the digital media world of the 21st Century," in which the publisher will approach "these issues of this new environment from the perspective of the changing role of talent." The Conclave Learning Conference 38 is set for July 17-19. Behind the Microphone: The Ins and Outs of Radio Midwest Communications flips the FM simulcast of News Talk WKZO-AM, Kalamazoo, Michigan, to Alternative Rock as "Z96.5 FM - Kalamazoo's Alternative" ... Melanie Heinkel is the new Music Director at Renda Broadcasting’s Hot AC "Mix 104.7" WSGL-FM, Fort Myers, Florida. Heinkel is sister "Gator Country 101.9" WWGR-FM midday host, which she will continue ... WKAR-AM, East Lansing, Michigan, debuts "Current Sports with Al Martin" -- a new talk show that will deal with sports topics in depth, with special guests and listener interaction. Martin, a Detroit native, joined WKAR-AM two weeks ago, arriving from crosstown WLNS-TV ... Bakersfield, California, market veteran Inga Barks is in at Buckley Radio Talk KNZR-AM-FM for 3-5pm. Barks previously was a host at crosstown Talk KERN-AM for several years ... Barry Thomas exits Lincoln Financial Media as VP of Engineering for the company's radio division, after almost seven years. Previously he was at Westwood One for three years ... CBS Radio's Urban-leaning Rhythmic CHR WPGC-FM, Washington DC, announces that Tati will join the Pablo morning show, Thursday (May 16), joining Pablo, Guy Lambert and DJ Heat. Tati most recently hosted mornings in San Diego at "Jammin’ Z90" XHITZ-FM ... WYCL-AM, Youngstown, Ohio, flips from Spanish to Classic Country as "1540 The Farm" featuring artists such as Alabama, Dolly Parton, Merle Haggard, Johnny Cash and Willie Nelson, among others ... R+B Oldies WQBQ-AM, Leesburg, Florida, flips to Urban Inspirational under an LMA with All-N-One Media Group ... The newest Spanish Adult Variety Hits (but "family safe") "Juan FM" station is KFXZ-AM, Lafayette, Louisiana -- programmed on the Dial Global StorQ technology.