CC Media Holdings has reported a $5 billion fourth quarter loss due to a major change in the value of its assets such as radio licenses and other permits. CC Media Holdings is the vehicle used by Thomas H. Lee Partners and Bain Capital to privatize Clear Channel Communications last year in what was reportedly a $17.9 billion transaction. The $5 billion loss on revenues of $1.6 billion compares with a fourth quarter profit of $321 million on revenue of $1.9 billion in same period a year earlier. CC Media reports its radio revenue fell 13% in the fourth quarter and revenue from its Outdoor Advertising business dropped 16%.
According to the Wall Street Journal, CC Media has long-term debt obligations of $19.5 billion and “debt-ratings agencies are concerned it might not be able to meet all its financial obligations. Standard and Poor’s Ratings Services downgraded Clear Channel’s debt last month, while Moody’s Investors Service has the company on review for a possible downgrade.”
Looking at the full year 2008, CC Media Holdings accumulated $6.7 billion in revenue, a 3% drop from 2007 revenues. Broken out solely by radio, overall revenue for 2008 fell by 7%.
CC Media Holdings CEO Mark Mays commented, “Although CC Media Holdings revenues were down in 2008, our radio and outdoor businesses performed well compared to their sectors. These are challenging times which have taken their toll on many of our advertisers. However, macroeconomic conditions will continue to present a stark reality where disciplined focus on working with our advertising partners, cost containment and the flexibility to adjust to change are essential. Most importantly, we are so appreciative of the tremendous efforts expended by our employees to meet the demands of these difficult times.”
Click Here to read the official earnings release.
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