No. This is why it is important not to just hate commercial radio and hope for the best. I got an email from a listener who was happy that Corporate radio was dying. He thought that we should “starve the beast”, implying that if it went bankrupt, the rats would jump off a sinking ship and someone who cared about their community would buy the station back. I wish that were the case. The way high finance manages radio stations, allows them to keep them in a zombie state rather than killing them. Even if the station does go bankrupt, the same firm that sucked all the life out of the company can manage to keep the company after bankruptcy. This is called a “pre-packaged bankruptcy”. In such an arrangement, they convince a judge that they are the best ones to manage it, because they obviously know whats wrong now and they promise to pay a percentage back to debtors. The creditors may get 90% of the new company. Who’s complaining? The listener would if they knew about it.
Imagine you were a DJ at Citadel (a radio consolidator) where you watched all your friends get fired and the quality of the programming drop thus driving listeners away. The company is huge, thanks to debt financing and mergers spurred by a private equity firm (Forstman Little and Company). In 2009 when the company is heading for chapter 11 you may think, at long last the CEO Farid Suleman is going to get his comeuppance. It never happens. He keeps the company. He keeps it, till he sells to another radio consolidator (Cumulus) who with the help of another private equity firm (Crestview Partners) lobs even more debt onto the stations and fires even more people. This is a pattern.
If you want to “starve the beast” then we have to stop feeding the beast with tax breaks every time it uses excessive debt (leveraged buyouts) to consolidate. By ending Interest Tax Deductibility solely on corporate takeovers, you would end the financial incentive that these companies use to prey on vibrant industries (paying little to nothing in taxes). Interest Tax Deductibility is what private equity firms use to convince the companies that they lob debt onto to accept that debt. The debt is the reason good employees are fired and ultimately the reason why commercial radio sucks.
The root problem with leveraged buyouts is that they often doom the company the moment they happen because the level of debt is so high that it is unrealistic to pay it off. The banks and the private equity firms don’t care about this because they make money off this debt though fees that they charge. To starve this beast, we have to follow the money to the firms that make money off of this destruction and cut them off. These small buyout groups should not be making huge sums of money if the companies they own do not pay taxes, and they should not make any money at all if they cannot afford to keep employees who were a part of the companies long before they took over. Capitalism has taken an extremely dysfunctional turn since Private Equity firms started abusing this tax loop-hole.