New Vision is latest Chapter 11


Jason Elkin’s New Vision Television has come to terms with its first and second lien debt holders and filed a pre-packaged Chapter 11 reorganization. The bankruptcy will eliminate all of the company’s debt, some $400 million plus.

There was no immediate word on how the ownership of New Vision will change, with the creditors swapping debt for equity. The company’s equity backer was HBK Capital Management.

New Vision has secured $30 million in new financing and will continue to operate with its current management team.

“This agreement is powerful news for New Vision’s employees, advertisers and business partners,” said CEO Elkin.  “Our daily business operations will not miss a beat:  Jobs and benefits for our employees will be intact; advertisers will continue to receive top customer service; and our stations will continue to invest in best-in-class local news coverage and other programming.  And as soon as the pre-arranged court process has ended, New Vision will emerge as a nimble, well-financed company – with some of the best management and employees in the business – poised to take advantage of future growth opportunities.”

“New Vision is one of the many highly-leveraged American companies that, even when outperforming their industries, are unable to manage high debt service costs in these difficult economic times. New Vision is a very strong company, with great employees, loyal advertisers, committed local audiences, and valuable geographic and network diversification among our stations.  Today New Vision is acting decisively to restructure our debt and strengthen our balance sheet so that our proven and strong business model will once again be the focus of our operations,” added Elkin.

Moelis & Company is serving as financial advisor to New Vision Television, and Locke Lord Bissell & Liddell is serving as legal counsel for the restructuring.

New Vision lists this portfolio of stations:

Major Network Affiliates

KOIN Portland, OR (CBS)
WIAT Birmingham, AL (CBS)
KHON Honolulu, HI (FOX)
Hawaii’s CW 93 Honolulu, HI (CW)
KSNW Wichita, KS (NBC)
KTMJ Topeka, KS (FOX)
KSNT Topeka, KS (NBC)
WJCL Savannah, GA (ABC)
*WTGS Savannah, GA (FOX)
WKBN Youngstown, OH (CBS)
WYFX Youngstown, OH (FOX)
*WYTV Youngstown, OH (ABC)
KIMT Mason City, IA (CBS)
*Stations operated under an SSA/JSA agreement.

Additional non-affiliate stations

*Kansas 22 Wichita, KS
Untamed Sports TV Birmingham, AL
MyYTV Youngstown, OH
MyYTV Mason City, IA
* 50/50 partnership with Cox Cable

RBR/TVBR observation: The latest, but almost certainly not the last. Just how many highly leveraged groups end up filing in bankruptcy court really depends on how long it takes for the economy to start improving and for ad spending to get back on track.

Based on this week’s ad forecast from Magna’s Brian Wieser, that may take a while.