As Heard on The Stephanie Miller Show

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Friday, October 13, 2006

Ok....AAR Files Chapter 11....now the GOOD news!

By now you probably know that Air America Radio has filed for Chapter 11 bankruptcy.

And I know that many of you neocons are dancing in the streets right now. But before you get run over by that oncoming bus that should arrive in about three weeks, a few things you should know.

First, the following companies have filed for Chapter 11 as well:

+KMart
+Covad Communications
+Delphi Automotive
+Delta Airlines
+Atkins (the heath food company)
+Pacific Gas and Electric

Shall I go on?

Well, I'll just mentions that all of these companies have been able to continue operations and many have eventually gotten out of BK.

Second, what happens to a company that goes BK11. Here is an explanation from SFGate.com:

The fate of a corporation in bankruptcy — whether it goes out of business
or is reorganizing in order to recover from crippling debt — is determined by
federal bankruptcy law. The bankrupt corporation (i.e., "the debtor") can use
Chapter 7 of the Bankruptcy Code to liquidate or Chapter 11 to reorganize the
business in hopes of turning things around and becoming profitable again.
In Chapter 11, management continues to run the daily business operations,
but the bankruptcy court must approve all significant business decisions.
Publicly held companies usually choose to file under Chapter 11 rather than
Chapter 7 because it allows them to continue to run their business as well as
maintain some control over the bankruptcy. The U.S. Trustee appoints one or more
committees to represent the creditors and stockholders in working with the
corporation. A reorganization plan is developed to get the company out of
debt.

The plan must be confirmed by the court and agreed to by the creditors,
bondholders, and stockholders. The court can confirm the plan over the rejection
of the creditors or stockholders if it finds that the plan treats them fairly.
The plan relieves the corporation from paying a portion of its debt so that the
company can make a recovery. A committee is formed to represent the unsecured
creditors, including bondholders. An additional committee may be created to
represent stockholders. The trustee may also create a committee to represent
other creditors, such as secured creditors and employees.

After the committees develop a plan with the corporation, the bankruptcy
court must find that it complies with the Bankruptcy Code before the plan can be
implemented. Known as plan confirmation, this process is usually completed in a
few months.


More can be found at http://allbusiness.sfgate.com/article.asp?ID=2976053&CenterID=31&CatID=1799

Now what does this all mean, dear lib radio fan. It means that, for the time being, AAR is not going anywhere. In fact, its future may not be brighter. Here's why.

First, the ratings are good. In most major markets, AAR-affiliated stations are either leading or staing competive. AAR has doubled the numbers in L.A. as opposed to the previous sports format. In NY, the numbers are competitive and solid. And they are killer in Portland. That equals money.

And that brings me to second: If AAR is sold, and I would assume that the ownership is going for a sale, there would be at least two interested parties. Jones Radio Networks, which syndicates Stephanie Miller and Ed Jones, two staples at many midwest and western AAR stations would be one. The other.....sit down for this gang....Clear Channel. Yes, the Evil Empire. Well, it seems that we libs have a lot to thank the Mays boys for...you see CC OWNS many AAR affiliates, including the aforementioned ones in Portland and LA. They make a lot of money for CC, and an AAR demise would not be something they would look forward to. Also, Racheal Maddow's show uses a lot of feeds from ABC Radio. Would the Cumulus/Disney partnership be interested?

My prediction: IMHO, Jones, CC, or a partnership will buy AAR, hire programmers to fix things. Al Franken stays until he starts his Congress/Senate run, Randi Rhodes and Rachael Maddow would be kept. The sound would be cleaned up a lot, and AAR would be relaunched with a massive campaign would directly involve its stations. And that won't happen until at least 2007, anyway.

Also, you might note that if Cumulus/ABC to a run at AAR, there is Keith Olbermann, who I think would be a cinch to replace Franken. I say that because ABC Radio has K.O. radio contract.

Oh and another very outside possibility is NBC. Now realizing that exiting radio was a huge mistake, AAR could be thier re-entry point. They have K.O. on contract for TV, and they can simply renegotiate ABC Radio deal, while they take back ownership of their old radio network from CBS. (OK, that one is on the wishful thinking path.)

Meanwhile, my NeoCon friends, the bottom line is that AAR is still on the air, whether you like it or not. And with the coming tsunami that will overtake most non-Teutonic-accented Republicans, the landscape may very well change in the nest few years.

Sorry to ruin that party for ya boys.


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