[Interesting discussion near the end of the article about satellite automated control of terrestrial broadcast TV stations.]
Clock's Ticking for Brissette at Equity By Price Colman TVNEWSDAY Oct 29 2008, 3:36 PM ET http://www.tvnewsday.com/articles/2008/10/29/daily.18/ Paul Brissette's been on the job less than two weeks as restructuring officer at Equity Media Holdings and already he's put all of the company's TV stations up for sale and cut nearly all top management. "I always operate with a sense of urgency," says Brissette, acknowledging that he has little time to generate a lot of cash to help the company avoid bankruptcy. Among the cuts: Larry Morton, who had moved over to head Equity subsidiary Retro Television Network; Chief Operating Officer Gregory Fess, and corporate secretary Lori Withrow. And just yesterday, Equity announced that it was shopping not only its full-power stations but opening up its analog low-power stations for sale, LMA or JSAs. "Our plan is to sell all the TV stations that are in Equity," Brissette says. Equity has paid off Wells Fargo the roughly $19 million it was owed but remains in default to senior lender private equity fund Silver Point Capital to the tune of $38.5 million. Silver Point has twice granted Equity forbearance on those defaults, but when a Sept. 15 deadline passed with little progress on paying off Silver Point, Brissette, a broadcast industry veteran who had performed consulting work for Silver Point, was brought in by the board to try to turn the company around. "My job is to stop the burn of the money," Brissette says. "We're looking at every single thing. We are making significant progress." Equity also owes Univision $15 million and Valley Bank roughly $6 million. For the second quarter and first half, before Brissette came on board, Equity reported operating losses of $8.5 million and $15.8 million, respectively. Since spring, Equity has signed deals to sell 18 full- and low-power stations to Luken Communications for $17.5 million. Luken Communications boss Henry Luken, an early investor in Equity and until recently chairman of the board, owns 17% of Equity, according to Equity's 10Q for the quarter ended June 30. Luken stepped down as chairman so that he could acquire certain attractive station assets, including those with Hispanic programming and in rich markets. Brissette said Luken Communications has completed or signed deals to buy WUMN Minneapolis (DMA 15), KEYU and KUOK Oklahoma City (DMA 45); WUVF, WBSP and WEVU Fort Myers-Naples, Fla. (DMA 62), and KWKO Waco, Texas (DMA 94). Luken Communications also bought at least four low-power stations in several of those markets. Earlier this year, Luken Communications purchased Equity's Retro Television Network for $18.5 million this year. Equity has an option that expires Dec. 24 to buy back RTN for $27.5 million. RTN operates four stations: KQUP Spokane, Wash. (DMA 75), KWWF Cedar Rapids-Waterloo-Dubuque, Iowa (88), KTVC Eugene, Ore. (DMA 119), and WBIF Panama City, Fla. (DMA 151). RTN's Web site shows 76 affiliates, most low-power or digital stations. As its name suggests, RTN features "classic" TV shows from Leave It to Beaver to Battlestar Galactica. Whether Equity exercises the option to buy back RTN will depend on how quickly it can sell the other stations. "What we can do remains to be seen," says Brissette. "We don't have very much time. It's a very tough time to close on deals." Larry Patrick of Patrick Communications, one of two brokerages selling Equity stations, said it's unlikely the company will have enough money to buy back RTN. "If Luken wants it, he'll end up keeping it," Patrick says. "I think RTN is a great idea. For $12,000 to $18,000 a month, you can have second channel that is totally programmed for you. You sell a few ads, they handle all the programming for you. It's a brilliant idea." The future of a dramatically smaller Equity may lie in its CASH — central automated satellite hub — operation. "It has great potential," Brissette says. Technicians at CASH can operate a station remotely so that during certain hours, no station personnel need be on hand. The hubbing operation already remotely controls about 80 stations, Patrick says. "These guys know a lot about technology," Patrick says. "But they tried to do this by borrowing money. The problem is that while they were building, they were not generating any cash. It was always hand to mouth. I give them an A on tech and innovation but a D on capital structure. -- ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 Mail: antunes at uh dot edu *********************************** * POST TO [email protected] * *********************************** Medianews mailing list [email protected] http://lists.etskywarn.net/mailman/listinfo/medianews
