Young Broadcasting spells out its overleverage


The Chapter 11 petition that Young Broadcasting filed Friday lists total assets of $575.6 million, including the current value of KRON-TV San Francisco, which it bought a few years back for $820 million. The company’s debt load is $980.4 million, including $640 million face value of publicly traded bonds.

Keeping creditors notified during the Chapter 11 restructuring process won’t be anywhere nearly the expensive proposition currently faced by Tribune Company. Young estimates that it has fewer than 50 creditors. It has not yet filed a list of the major creditors and the amount each is believed to be owed.

Surprisingly, the company estimated that it has only 99 shareholders for its 21,864,047 shares of Class A stock. Only 49 (employees and Young family members) hold the 1,941,414 shares of super-voting Class B stock.

As the Young Broadcasting board of directors approved the decision to file for Chapter 11 reorganization, the board also appointed David Pauker as CRO – Chief Restructuring Officer. He is a restructuring specialist from Goldin Associates. The CRO is to report to and take direction from CEO Vincent Young and the board of directors. He is to assist the board and management in negotiating with creditors.   

RBR/TVBR observation: We don’t know yet exactly how much of Young’s debt is owned by Silver Point Capital, but it is believed to be substantial. It could be that Silver Point has a particular interest in KRON. The investment group already owns Granite Broadcasting, acquired through a Chapter 11 process, which just happens to own Independent KOFY-TV San Francisco. If we were running Silver Point, which we’re not, we would certainly have some interest in exchanging our big chunk of Young’s debt for KRON, creating a duopoly in the sixth largest US market.