• by Erik Sass , February 27, 2009

After a steep decline in its stock price, Citadel Broadcasting will be de-listed by the New York Stock Exchange on March 6--the nadir for public companies. Citadel's stock price plummeted along with the broadcaster's revenues over the last couple of years, losing 99% of its value since 2004, as investors bail on what looks more and more like a medium in distress.

Companies are liable to be de-listed when their stock price falls below $1 per share; last week, Citadel's hovered around $0.14 per share. De-listing is not automatic, and only occurs at the discretion of NYSE officials, who may choose not to de-list a company if it demonstrates future viability and presents a plan to boost its stock price.

However, on Thursday, Feb. 26, the NYSE rejected Citadel's proposal, indicating that stock-market officials don't believe the revenue trends will turn around anytime soon. Citadel's failure to convince the NYSE is especially ominous; officials are usually fairly generous in their financial assessments, in an effort to avoid de-listing a company if at all possible.

Like some other big media companies, Citadel's financial woes come close on the heels of a major acquisition--the $2 billion purchase of ABC Radio in June 2006. This highly leveraged transaction turned out to be poorly timed--as did McClatchy's $4.5 billion acquisition of Knight Ridder that same year.

The Journal Register Co. also assumed substantial debt with an ill-advised buying spree; Journal was de-listed by the NYSE last year, and it entered Chapter 11 bankruptcy last week.

Going private has not saved big companies, especially when they find themselves saddled with debt from the deals to take them private. CC Holdings, the company created by private-equity firms to take over Clear Channel Communications last year, had its credit rating downgraded by Standard & Poor's last week, reflecting concern that it may not be able to service the roughly $18 billion in debt it assumed to buy the company.

Last December, the Tribune Co. declared bankruptcy--unable to make scheduled payments on about $11 billion of debt, most of which was assumed in the transaction engineered by Sam Zell to make the company an employee-owned business.