Photo: The Iowa Republican
Clear Channel Communications (CCMO), the radio station conglomerate, laid off “hundreds” of DJs today in a move that will no doubt lead to the increasing homogenization of radio in the U.S. Indirectly, it’s all Mitt Romney‘s fault. Here’s how these dots connect:You can be forgiven for thinking, like Gawker did, that the layoffs are part of a cost-cutting plan driven by fundamental shifts away from traditional analogue media (like FM radio) toward digital streaming media (like Pandora). They’re not.
As a business, Clear Channel is doing quite well. It made revenue of $1.6 billion in Q2 2011, up from $1.5 billion the year before. It showed an operating profit of $311 million, from stations such as KTU in New York and KIIS FM in Los Angeles. Clear Channel’s problem is that is also had a quarterly interest payments of $359 million — more than its operating profits. That interest is being paid on a staggering $20 billion in debt.
That debt came from the financing of a buyout of Clear Channel back in 2006. At the time, Clear Channel was also a healthy functioning business — it had just $8 billion in debt, and saw net income — real profits after interest payments — of $691 million for the year on growing revenues of $7 billion.
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