• TV Newsday, Wednesday, April 22, 2009 9:31 AM

The financial picture for some radio and TV companies is so gloomy they may end up in bankruptcy this year or next, according to analysts at the NAB this week. Plummeting revenue will force 80% to 90% of radio and TV companies to renegotiate loans with their bankers this year as they default on their original loan agreements, predicts Mike Andres of BIA Capital Strategies. He expects that station groups that can't renegotiate loans will settle on debt-for-equity swaps before succumbing to "flat-out bankruptcies."

About 5% of commercial TV stations are now in bankruptcy, says John Feore, communications attorney at Dow Lohnes, citing Tribune, Pappas and Equity Media. Approximately 260 radio stations have gone dark over the past 15 months due to financial troubles, he says. "Obviously, the lenders and broadcasters have to talk, or these numbers are going to accelerate."

Attorney Tom Davidson says it is important for troubled companies to get the conversation going with lenders now. "They may be able to obviate a formal bankruptcy proceeding. But if they wait until the 11th hour, sometimes there aren't as many options available to them."

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