Who's getting paid when Big City cashes out?

With hundreds of millions of dollars in station sales pending, Big City Radio (A:YFM) has updated shareholders and bondholders on how the cash will be distributed. It seems that what Big City shareholders get in the end will be largely determined by the Wall Street share price of another company - - Entravision (N:EVC).

Under the four deals that Big City announced around the Christmas-New Year's holidays, the company will receive $197.9M in cash for 11 of its 12 stations, plus 3,766,478 shares of Entravision stock (in addition to $100M cash for three LA stations). There's still one station left to sell, WYXX-FM Morris, IL, but it didn't draw strong bidder interest (3/13 RBR Daily Epaper #51) and its eventual sale won't add much to the total.

So, with $197.9M coming into its coffers, how much is Big City going to pay out? $210M, according to the proxy sent to shareholders. The biggest chunk of that is $193.5M owed to its bondholders ($174M in principal and approximately $19.5M in accrued interest). Brokerage, legal and other transaction related expenses will claim $3M and taxes $9M. And then there's $4.5M in "other" expenses, including such things as lease terminations, severance payments and payments of $2.2M that will be due to three Big City executives once the transactions close.

If his employment is terminated at the end of this month, President and CEO Charles Fernandez stands to receive a cash payment of approximately $1M. VP/CFO Paul Thomson is entitled to a termination payment of $75K, plus a cash payment of nearly $590K because his stock options are currently out of the money. Likewise, Executive VP Bryan Subotnick is in line for a payment of just over $500K under his stock option grants. Bryan Subotnick is the son of Big City Chairman Stuart Subotnick and Director Anita Subotnick.

So, with $210M to be paid out and only $179.9M in cash coming in, the focus is on the Entravision stock.

Back when the LA deal was announced (12/16/02 RBR Daily Epaper #120), those 3,766,478 were worth about $37M. But at yesterday's closing price of $6.23, their value was down to around $23.5M. Subtract the $12.1M needed to complete Big City's $210M in payments and you have $11.4M left to distribute to shareholders - - plus whatever WYXX brings. With 14.5M shares outstanding, that works out to 78 cents per share (plus WYXX). But that's a best-case scenario, so you can see why Big City's stock closed yesterday (3/17) at 60 cents.