Air America Fire Sale Documents: Bankrupt liberal radio network to sell for $4.25 million

[seriousstan]

FEBRUARY 7--Bankrupt and about to lose Al Franken, its marquee star, Air America Radio is set to change hands for the bargain price of $4.25 million, according to new court documents. The sales figure was disclosed in a purchase agreement filed yesterday in U.S. Bankruptcy Court in New York. According to the agreement, the deal between Air America's owner, Piquant LLC, and a firm controlled by Stephen L. Green, a New York realtor, calls for Green's firm to repay up to $3.25 million in loans provided to Air America after the liberal radio network filed for Chapter 11 protection last October (the company listed debts of $20.2 million). Green's company will also give Piquant LLC $500,000 and pay off up to $500,000 in network debts (the bulk of which, $349,000, is owed to the network's Manhattan landlord). Green's bid topped by more than $1.25 million the nearest offer received by Air America, according to a motion filed along with the purchase agreement. An excerpt from that motion can be found below. Court documents do not specify how many bids were received for the network, though a filing notes that "more than ten interested parties" signed nondisclosure agreements and were allowed to review confidential network financial and corporate records. While Green controls the corporation purchasing Air America, two of the firms that were pre-bankruptcy investors in the radio network will "collectively own a minority interest" in the Green company. The Air America purchase is expected to be finalized at a court hearing in the next week. Franken, who is planning to run next year for a U.S. Senate seat from Minnesota, is scheduled to do his final Air America show on February 14.

http://www.thesmokinggun.com/archive/years/2007/0207071airamerica1.html

[LTR]

1. I collected some more information at my blog

http://ltradio.blogspot.com/2007/02/inside-look-at-air-america-radio-sale.html

The selling price was around what I figured. Not much assumption of debt.

[seriousstan]

2. Yes they screw people to the tune of $20,000,000.00.

[LTR]

4. The assumption is Piquant will be responsible for that

Or it fizzles out in bankruptcy court.

We'll know more probably next week.

All in all, the $4.25 million was for acquisition of assets and settlement of some liabilities.

[meldroc]

9. What else was Air America supposed to do?

That's the thing with loans. There's always the risk to the lender that the borrower will be unable to repay the loan. Air America just couldn't get enough advertising revenue to pay the bills, and this is the result.

Eventually, lenders, borrowers and bankruptcy courts have to come to a point where they recognize that repaying a loan's impossible, and come to an agreement to cut the losses. That's life.

Hopefully, the buyout and bankruptcy writeoffs will give Air America enough breathing room to get back on its feet.

[BeachBuckeye]

10. Back on its feet?

I would suggest that AAR never was on "its feet". They started with a poor plan and kept digging deeper. They have had some good talent but they stuck with some that was not so good for far too long.

[meldroc]

11. Maybe if they get more people like Randi Rhodes...

She's why I keep listening to Air America. More Randi Rhodes and Mike Malloy (big mistake, AAR, firing Malloy... Now Nova-M gets my ears for that timeslot...)

[nadinbrzezinski]

13. Thom Hartman is replacing Franken

[valerief]

14. Good choice, for sure! nt

[RB TexLa]

3. Manhattan landlord?

Someone tell me that it was radio facilities located in Manhattan they were renting because it was needed and not office space. If they felt starting this out that they needed to have a company headquarters in Manhattan and couldn't bear to be in Jersey, Brooklyn or Queens then they really started out on a stupid note.

[LTR]

5. Agree with you there

Perhaps they felt it was more effective to be in the heart of the media center of Manhattan.

I would have settled for Jersey. Worked well for MSNBC for years.

[NYCGirl]

6. Yes, they rented broacast facilities. NT

[RB TexLa]

8. Good. When you've seen how many smart people make stupid business decisions you have to ask.

[Stephanie]

7. Stephen Green is the brother of Mark Green, a very progressive NY politician

He recently lost the Atty Gen'l race to Andrew Cuomo, but he is a true liberal, a former Nader's Raider, and a good guy. So I'm happy to see his brother stepping up.

[HamdenRice]

12. Beyond the Pale, the Progressive Jewish Radio hour, had interesting insight ...

I was listening to Beyond the Pale: The Progresssive Jewish Radio Hour on WBAI, NYC's Pacifica station last Sunday. They were in fundraising mode for WBAI so they were talking about how much WBAI does with its money compared to commercial radio.

One of the hosts, I'm not sure whether it was Esther Kaplan or Evelyn Kleinberg Neimar, said that she had guest hosted a show on AAR. She said she was amazed at how much overhead AAR requires compared to WBAI. At WBAI, most shows are produced by their hosts, and they have like one staff engineer on duty most of the time, no sales department, and virtually no staff. Yet they produce news and current events shows that are frankly better than much of what's on AAR which is mostly just talk.

So apparently AAR was quite bloated compared to public radio.