PRIVATE EQUITY’S SIMPLE TRUTH

 Levereged buy-out means more employees will have to be fired.They lump debt on the station but do not share in the risk.

I find myself explaining Private Equity this way. Many ask “How is this even legal?”  The consequences are hidden from the financial reporters (who often report the mergers as a good thing) because the firings happen over time as the debt matures and refinancing and/or reselling become immanent. The more debt there is from the corporate buyout, the more employees that will have to be fired so their former salaries can go toward paying off that debt.  For more information watch a short video expert  here.

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