WPST, WNJE, WCHR Go To Goldman Sachs in Nassau Bankruptcy Auction!

[Nick]

Goldman Sachs could easily outbid anyone since it was using Nassau's debt to Goldman as its "currency" instead of cold, hard cash.

[TimeIsTight]

Goldman Sachs could easily outbid anyone since it was using Nassau's debt to Goldman as its "currency" instead of cold, hard cash.

As you know, Goldman long ago put up its "cold hard cash" and will only get a small fraction of it back. 

Any "cold hard cash" that anybody else paid to buy the stations would ultimately go back to Goldman.

Goldman just doesn't think the bids were close enough to the true value of the stations.  It will now get to play with them for a while, hope the market improves, and expect to get more money at some future point.

You can bet the big money boys did all kinds of number crunching, with all kinds of spread sheets, and expect to make a better deal for themselves by selling the stations, on their own, sometime down the road.  They don't want to be in the broadcasting business a day longer than they have to.

[Nick]

Goldman Sachs should keep the staff at WPST since it is profitable. It ain't broke, don't fix it. I doubt anyone working at Goldman Sachs knows how to program a CHR station, they probably don't even like the music. Maybe they can put a business news format on 1040 for the interim until it can be sold. At least everyone working at PST can now say that they were employed by Goldman Sachs.

Credit bidding is important because it allows secured creditors to have control over their collateral. Goldman Sachs thinks that the market value of the stations will rise in the future, and will sell later instead of selling now. Any profit they get from running WPST is a bonus for them.

[TimeIsTight]

Goldman Sachs should keep the staff at WPST since it is profitable. It ain't broke, don't fix it.

For the sake of the radio types at PST let's hope Goldman follows your advice.

In going through the numbers, you have to wonder if Louis Mercatanti ever wishes that he was much less ambitious about growing Nassau with so much debt.  If what's being reported is correct, Nassau took on about $250-million in debt to buy stations, and at the auction last week it sold a few of them for about $10-million in cash.   Goldman is holding stations it thinks are worth about $38-million.  So even if Goldman gets the prices it is looking for, stations that were bought with $250-million in debt will have been sold for about $48-million, leaving lenders with $200-million in loses, and that ain't chickenfeed even on Wall Street.

If Mercatanti had just stuck with PST, and paid it off, he, and a lot of lenders, would be much wealthier people today. He would still own a profitable radio station, instead of losing an entire company in bankruptcy.  But hindsight is always 20-20, and over-leveraging, to grab all you can, looked smart, for a while.   You have to give those folks in Maryland credit for selling two stations to Nassau for $18-million and then buying them  back, along with another, for a total of $6-million, but possibly they were just "lucky" rather than that "smart."

I started another Nassau thread in the land of WODE on the Lehigh Valley board, there's some additional comments there, if you haven't checked them out yet............

http://boards.radio-info.com/smf/index.php?topic=211697.0