Clear Channel seeing business improvement


In connection with the sale of $750 million in new bonds by Clear Channel Outdoor, majority owner Clear Channel Communications has filed information with the SEC updating its financials well ahead of its regular quarterly disclosure. The filing shows that business is, indeed, getting better.

For all of Clear Channel Communications, whose ultimate parent CC Media Holdings, has some publicly traded stock, Q4 revenues are now projected to come in between $1.47 billion and $1.50 billion. That would be a decline of 6.8-8.6% from revenues of $1.61 billion a year ago.

For all of 2009, revenues are expected to be in a range of $5.5-5.54 billion. That would be down 17.2-17.6% from 2008 revenues of $6.69 billion.

According to the SEC filing, Clear Channel Radio revenues were down 19% in October. That improved to an estimated decline of 8% in November, although that’s not yet a final number. December is pacing to be down only 1%.

The US outdoor business is doing even better, with November and December looking to be flat after a 4% decline in October. For international outdoor the figures are -8% for October and December and -4% for November (based on average monthly foreign exchange rates).

For all of Clear Channel Communications, October revenues were then down 13%, November 5% and December is pacing down 3%.

Top management at CC Media Holdings has been working hard to keep the company’s balance sheet in compliance with its debt covenants and avoid the clutches of vulture capital funds who are hoping to see the company have to file Chapter 11. As noted when RBR-TVBR reported on the bond sale by Clear Channel Outdoor, the move will have a positive impact on the debt leverage at Clear Channel Communications. The improving revenue picture – now very close to turning positive year-over-year – will also help.

“We currently expect that we will be in compliance with the covenants under our senior secured credit facilities for the remainder of 2009 through 2010,” Clear Channel Communications said in its SEC filing, while adding the usual notice that actual results may vary.

RBR-TVBR observation: It’s been quite a game of chess, with Clear Channel and principal owners Bain Capital and Thomas H. Lee Partners trying to stay one move ahead of the vulture capital funds. It now looks like the CCU/Bain/TH Lee team was nimble enough to keep dancing until the recovery arrived. The vultures will likely go away hungry.