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Equity Media unloading TV Stations
The official leading a restructuring of Equity Media Holdings Corp. said Monday that he believes the Little Rock-based broadcasting company has a good shot at avoiding bankruptcy.
To do so, however, Chief Restructuring Officer Paul Brissette said, Equity is selling all of its TV stations.
Equity has said over the past year that it must find more money soon or could face options such as ceasing some or all operations or seeking bankruptcy protection.
While bankruptcy could be avoided in Brissette’s opinion, he doubts Equity will be able to exercise an option to buy back the heavily promoted Retro Television Network, which shows reruns of classic TV shows such as The A-Team.
Equity sold Retro to Henry Luken III, Equity’s largest shareholder, earlier this year for $ 18. 5 million.
The repurchasing option expires Dec. 24.
And Equity still has major debts to pay, such as a $ 38. 5 million bill to lender Silver Point Finance and a $ 10 million to $ 15 million debt to Univision.
Brissette, who has been working at Equity for only a few weeks, said Equity must cut the losses it is sustaining at its TV stations as soon as possible.
It also must focus on generating revenue from what Brissette will believe will be the company’s new business model: sales for its Little Rock-based Central Automated Satellite Hub. The hub feed via satellite services such as live weather broadcasts to TV stations nationwide. The system can reduce overhead, according to Equity’s Web site, by replacing “the need for master control operations at local TV stations,” and reduces the need for local engineers and other workers.
“You won’t need anybody at your switchboard at night,” Brissette said.
Equity said in June that it had about 245 workers, and Brissette said Equity still has more than 200 employees, roughly half of whom are in Little Rock. The company has not significantly reduced staff in recent weeks, Brissette said.
But a few key executives are no longer with the company, and more reductions will soon occur as stations are sold off, he said.
The trade publication TVNewsday reported last week that Larry Morton, who was Equity’s chief executive officer until early this year and later focused on leading RTN, recently was let go, but Brissette would not confirm that.
Attempts to reach Morton were not successful.
According to regulatory filings, Lori Withrow “no longer serves” as secretary of the corporation as of Oct. 20, nor does Gregory Fess serve as chief operating officer. John E. Oxendine remains chief executive officer, and Pat Doran remains chief financial officer, Brissette said.
Shares of Equity were flat on the Nasdaq stock exchange Monday at 44 cents.
Larry Patrick, managing partner at Elkridge, Md.-based Patrick Communications, a broker selling most of the Equity stations, said agreements have been reached for several of Equity’s full-power stations.
In total, about 60 stations are being sold, Patrick said.
“I think [Equity’s ] assets more than cover the debt of the company,” Brissette said.
A final plan to avoid bankruptcy and shift business plans will emerge quickly, he said.
“I don’t think I’d be sitting around here months trying to decide what to do. I’d think it would be more like weeks. We’ve got to get a business plan, and one that we think can work. And we’ll move very quickly.”
