The destruction derby started with credit downgrades for Radio One and Citadel, which are both now considered to be at serious risk of defaulting on their substantial debts.

Radio One's rating was knocked down from CCC+ to B- by Standard and Poor's, according to the Baltimore Business Journal. The credit rating firm believes the urban format radio group is borrowing more money than allowed under the terms of its various lending covenants.

Citadel was downgraded by Moody's Investor Service from Caa2 to Caa3, while raising its official measure of Citadel's probability to default.

In addition, it is becoming apparent that Clear Channel Communications' creditors intend to push the behemoth into bankruptcy, hoping to gain control of its equity at a big discount, then sell them off. According to the San Antonio Express News -- a close watcher of the San Antonio-based company -- this outcome seems increasingly likely as creditors block Clear Channel's plan for an internal debt swap between the corporate parent company and Clear Channel Outdoor, one of its divisions.

Blocking the planned debt swap would seem to leave Clear Channel Communications with no other option besides default -- putting pressure on its owners, Bain Capital Partners and Thomas H. Lee Partners, to cut their losses. The two private-equity firms took the company private in 2007 in a deal that saddled the company with about $22 billion of debt.

Also, Cumulus Media said Tuesday that it reached an agreement with lenders that will temporarily give it some breathing room. According to Cumulus president and CEO Lew Dickey Jr., the amendment to the lending agreements will allow Cumulus to avoid being declared in default if it violates the terms of its financial covenants until March 31st, 2011. Cumulus carries just under $650 million of debt.

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