I’m guessing Moelis is there on a dual mandate, and asset sales aren’t the primary focus (LME and/or restructuring is). They have to deal with a maturity wall in early 2027, and the market is telling them they’re gonna have a hard time - term loan is in the 60s, bonds in the 30s.
But your broader point stands. Byron has always been willing to at least pretend to try to bid for things (even if he didn’t have the coin to do it) so this is a pretty marked shift in his outward posturing. Perhaps placating his creditors is the priority now, but perhaps it’s just much harder to continue his usual spiel with a straight face.
Yes, agreed! That's the gist - I honestly had forgotten just how many things AMG had pretended to bid for until I had to write this piece! Thanks for adding context with the pricing of the term loan in the 60's and the bonds in the 30's..not good! Will see how this shapes out.
Hi Simeon, appreciate your insight. This isn’t an industry I have much knowledge of but my question is even though broadcast is a declining business isnt it possible that these major companies left shift from acquirers to capital managers/cash cows that just distribute whatever cash flow they have? I feel like this was the story for old businesses like newspapers etc but the NYT for example is has performed well over the past 5 years +33% and distributing cash back to shareholders in the form of dividends to the tune of $359 million over those five years.
I guess my question is can these broadcast companies accomplish this sort of capital allocation and management in the future?
Hi - Matt - first off, thanks for subscribing! To answer your question - I think what is missing with broadcast companies that is making the "shift" to "cash cow" difficult, is Broadcast TV truly has no good organic growth avenues left. At least with NYT, they had opportunities to grow in digital. I do not short - I think these TV decline can be managed for a long time! But at some point - we need organic revenue growth that is SUSTAINABLE. We will see!
I’m guessing Moelis is there on a dual mandate, and asset sales aren’t the primary focus (LME and/or restructuring is). They have to deal with a maturity wall in early 2027, and the market is telling them they’re gonna have a hard time - term loan is in the 60s, bonds in the 30s.
But your broader point stands. Byron has always been willing to at least pretend to try to bid for things (even if he didn’t have the coin to do it) so this is a pretty marked shift in his outward posturing. Perhaps placating his creditors is the priority now, but perhaps it’s just much harder to continue his usual spiel with a straight face.
Yes, agreed! That's the gist - I honestly had forgotten just how many things AMG had pretended to bid for until I had to write this piece! Thanks for adding context with the pricing of the term loan in the 60's and the bonds in the 30's..not good! Will see how this shapes out.
Hi Simeon, appreciate your insight. This isn’t an industry I have much knowledge of but my question is even though broadcast is a declining business isnt it possible that these major companies left shift from acquirers to capital managers/cash cows that just distribute whatever cash flow they have? I feel like this was the story for old businesses like newspapers etc but the NYT for example is has performed well over the past 5 years +33% and distributing cash back to shareholders in the form of dividends to the tune of $359 million over those five years.
I guess my question is can these broadcast companies accomplish this sort of capital allocation and management in the future?
Hi - Matt - first off, thanks for subscribing! To answer your question - I think what is missing with broadcast companies that is making the "shift" to "cash cow" difficult, is Broadcast TV truly has no good organic growth avenues left. At least with NYT, they had opportunities to grow in digital. I do not short - I think these TV decline can be managed for a long time! But at some point - we need organic revenue growth that is SUSTAINABLE. We will see!