Nielsen has had no bigger friend than iHeart in more ways than people know.

iHeart owns 850+ stations in 150 markets and had plenty of need for audience ratings.

That was before “dislocation” and “excellence centers”.

iHeart is owned by the same people who own a large chunk of Nielsen.

Yet, it is becoming more evident that Nielsen may wind up the ironic victim of the very thing that helped it grow – consolidation.

iHeart’s competitors will be directly impacted by forces that will upend the radio industry once again and redefine how radio will prove effectiveness to advertisers.

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The second attempt to sell Townsquare is over but the company’s financial troubles are just beginning.

If we know this, certainly their private equity owners are aware of it.  Townsquare didn’t try that sale “Hail Mary” for nothing.

They reportedly paid Houlihan Lokey somewhere between $50-100,000 to in effect tell them what everyone already knew – there are no buyers.

But now that Townsquare is forced to operate as is, they have debt problems that could be the biggest challenge to the company’s viability since it went public.

This has huge repercussions for not only their employees, but competitors in markets where they currently operate and for investors who are still drinking the Kool-Aid that Townsquare is a digital company.

No company tries to sell itself two times – unsuccessfully at that – unless they know something they don’t want to talk about.

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The term “dislocation” used to replace the word “firing” is tone deaf but on Wall Street, they understand its true meaning.

Since it was introduced last month when iHeart “dislocated’ over 1,000 employees, the focus has been on iHeart’s sale to Liberty Media.

But there is a similar iHeart-attack waiting for their competitors that is designed to force them into economies of scale and make it more difficult for them to break even.

These plans are as ruthless as what they unleashed on their own employees, but this is a desperate company waiting to be taken over and ready to play a new kind of hardball with competitors.

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This is the start of the real selloff not the New York, LA and Atlanta station giveaways previously.

Financial problems continue to plague Cumulus.

Market managers are complaining about being strapped by cost-cutting.

Now we learn that the post-bankruptcy Cumulus owners consisting largely of lenders who took a haircut are done with a declining radio industry.

They want their money at all costs and employees are about to feel their urgency.

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What a mess.

Founder Larry Wilson intended for Alpha Media to be everything iHeart was not – live and local and soundly invested in carefully chosen mid-sized radio markets.

But in his haste to do an IPO, Wilson bought a micro-market company known as Digity and the high price of adding insignificant small market stations put Alpha underwater ever since.

Wilson was kicked aside.  Paul Stone came to his financial rescue and took over control.

Now, even Stone may get burned as a new owner is waiting in the wings and their goal is not live and local but buy and sell.

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This is getting to be a habit – Townsquare trying to sell itself.

A few years ago, they tried and found no takers.

We’ve learned this time, they actually had interested potential buyers but the prospects reportedly didn’t like the way they were handled.

The last prospect standing finally walked a few weeks ago.

What’s fascinating is not so much the usual considerations, but Townsquare’s unorthodox way of trying to sell itself.

Now Townsquare’s owners, Brookfield Asset Management, has a real problem.

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So much for all that podcasting revenue, Entercom is desperate for cash.

That’s why it practically gave away a Boston FM station to EMF yesterday and why in spite of what David Field tells analysts, Entercom has deep financial problems.

But the headlines don’t tell the full story.

The desperation sale of WAAF-FM may seem like a one-off but the company reportedly has plans to sell more stations as the failed CBS merger and the decline of radio in a boom economy have finally caught up to Entercom.

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Firing over 1,000 people most of whom were talent and programmers responsible for their on-air product was a gutsy move on the part of iHeart management.

Now, bolstered by the fact that their stations are still on the air with few problems and seemingly doing fine, iHeart prepares for another assault on employees.

Keep in mind that the January firings were not limited to programming and talent, they sneaked in over 50 engineering and IT RIFs as well as non-air related firings as part of the massive layoff.

“Dislocation” helps iHeart make up for declines in revenue that are expected all through 2020.

iHeart has apparently isolated the next victims of “dislocation” based on how virtually seamless the January firings went and it now appears iHeart has decided where to cut next. 

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Newstips  

It’s only been about a month since iHeart ejected more than 1,000 employees, mostly programming and air talent.

Under the shock of the most massive single firing in the history of radio, iHeart also slipped in more than 50 “dislocations” of engineers/IT people, put the ball in motion on a plan to downsize 150 studios and offices in their clusters over the next three years to cookie-cutter suites that are the same in every market making it easier to plug people in anywhere with no virtual learning curve.

And they’re not done.

Katz is their massive rep firm, a virtually monopoly.

Premiere is their syndication arm.

Total Traffic grinds out traffic reports to an audience that has no trouble downloading Waze.

All this as Liberty times its takeover of iHeart and “dislocations” for these businesses that were unthinkable even a month ago are coming soon.

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Larry Wilson is really pissed for unceremoniously getting kicked to the curb.

There is one investor who seriously wants to get out.

And one who wants to do just about anything to take over the company.

And we know exactly how this will play out because that one person is planning to win Alpha for himself using the same strategy he employed in the takeover of another radio company he rescued.

Based on that, you can see the future of Alpha Media more clearly now especially the extreme measures some are willing to employ to get control.

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Sooner or later this had to happen.

But sooner?  Really?

With over 1,000 “dislocations” accomplished, iHeart has a plan to eat away at other jobs and make it harder for those who survived the first cut to do theirs. 

Some of the second wave of “cost efficiencies” even go beyond the so-called “excellence centers” (regional hubs) and fitting out new offices and studios in virtually all of their 150 clusters – actually, they’ve already started that.

This is worse because it’s going to happen sooner.

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Next to iHeart’s $5.8 billion, $1.8 billion in debt doesn’t look all that bad.

But it is hurting Entercom even as the company rushes to cut operating expenses because their debt keeps growing – not something they want to draw attention to.

When radio groups make debt payments by selling assets and redirecting some of the profit to de-lever debt, that’s one thing.

But the mark of a company that has “good bones” is when they pay down debt from cash flow.

Short of that, Entercom expenses must be cut deeper and the fastest way to do that is “dislocations” – the kind iHeart did.

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Newstips  

Could it get any more disruptive than this?

The only company that can buy iHeartMedia is now slow rolling that acquisition.

Liberty Media is serious enough having purchase an estimated 30-35% of iHeart debt when the company was in bankruptcy.  That debt can be converted into equity.

Liberty wants to add iHeart’s terrestrial radio stations to their multimedia platform that includes SiriusXM, Live Nation and Pandora.

Meanwhile iHeart “dislocates” over 1,000 employees in one week and concocts “excellence centers” to initiate more layoffs.  Why, if a new owner is coming in?

This begs the question is iHeart doing all of this with Liberty’s approval or does Liberty have other plans for iHeart when it takes over?

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Newstips  

That will get the attention of radio CEOs who confuse the glass ceiling for a piggy bank.

Cumulus will reportedly get hit with a reverse discrimination lawsuit that involves the increasing radio practice of firing male market managers and replacing them with younger people usually less experienced women.

This same cost cutting technique has been reportedly going on at Entercom in an attempt to reduce expenses and iHeart just “dislocated” over 1,000 people creating a potential boom for lawyers.

The bombshell Cumulus lawsuit is massive in scope – 6 charges.

All it takes is a court victory and there will be a flood of copycat lawsuits setting an unnerving precedent and making it easier and less expensive for claimants to sue.

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Newstips  

They’re kidding, right?

The company that maintained and grew a $20 billion plus debt for years, is now preoccupied with lowering its debt.

iHeart just did another refinance that they claim is at lower interest rates – remember, iHeart’s kick the can down the road strategy came with a high interest rate price.

Then dropped $200 million on dubious podcasting investments last year and paid for it this year with over 1,000 employee job “dislocations”.

Liberty is slow rolling iHeart on taking majority ownership but they are the buyers in waiting and Pittman knows it.

This obsession with debt reduction is the canary in the coal mine about iHeart’s advanced warning of danger ahead.

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Newstips  

If you still don’t believe that Bob Pittman is as serious as an iHeart-attack to eliminate the expenses related to local radio, maybe this will help.

First, he pulled the trigger on over 1,000 “dislocations”.

Now he plans office and studio “relocations” that are so important to their plan that they are greenlighting them in certain markets.

But all markets will reportedly get these 150 cookie-cutter office/studios on a time schedule that is very ambitious and dependent on the peculiarities of some clusters.

By the end of this year after more “relocations” are forced on employees, we will also get a look at what the physical iHeart station of the future will look like.

It’s important because all the other radio groups that tend to adopt iHeart tactics will be eying it up as well.

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Newstips  

They may not be called “dislocations” but they look like it.

Of course, Field’s job is safe and his compensation goes up regularly even as the company’s stock goes down.  It is worth only $4.27.

Before the coronavirus started messing with the stock market, Entercom was slipping down again apparently because of a different virus -- their fourth quarter revenue is apparently unimpressive and the market knows these things.

So Entercom will be implementing a strategy that will eliminate a lot of local talent under the cover of iHeart’s recent 1,000+ “dislocations”.

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