April 01, 2016 - 1:46pm EST by
2016 2017
Price: 4.50 EPS 0 0
Shares Out. (in M): 36 P/E 0 0
Market Cap (in $M): 1,627 P/FCF 0 0
Net Debt (in $M): 4,394 EBIT 0 0
TEV (in $M): 6,203 TEV/EBIT 0 0
Borrow Cost: Available 0-15% cost

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  • Short squeeze
  • Advertising



[This is short-term oriented and may only be applicable to smaller investors and smaller funds, given float.  Obvious risk is short squeeze, compounded by the fact that entity itself (CCO, not iHeart), has ample liquidity with cash of close around $775MM PF for cash receipts from iHeart and net of dividend payments YTD.]


Clear Channel Outdoors Class A equity (CCO) shares are a short, as management has yet to announce the loss of its biggest wallscape – the Vornado/Marriott Marquis digital display in Times Square that was the largest high def ad display in the world at its launch in 2014 – Half an Acre in size!   Without a doubt, CCO’s biggest revenue growth driver has been its Wallscape/Spectracolor business, with revenues up 66% YoY, representing an additional $27MM vs 2014.



Also, the company has likely lost at least another 2 wallscape displays in Times Square out of its 25 Spectacolor displays in Times Square, NY.  None of this has yet been disclosed by management despite it being a “primary” contributor to revenue growth over the past 5 quarters.  


Moreover, what does this say about CCO as operators that they lose the contract for the most high profile ad display in the Times Square – one they clearly coveted based on regular comments and press releases on the performance of the asset(s) – just 1 ½  years after getting it?


What Happened?


In November 2014, Vornado, the entity that owns 1535 Broadway in the heart of Times Square, completed the construction of the largest, most-expensive, high definition advertising display.  Google was the first to lease space.  At that time, it was reported that the asking price for 4 weeks of exposure was $2.5MM, or $32.5MM/yr if annualized.  Headlines for that period was as follows, one was even from Clear Channel boasting how they were selected as the exclusive sales agent for the display:





Vornado’s 2015 10-K confirms continued ownership of this building address as well:


Source: 2015 Vornado 10-K



Now to step back to the prior month.  Back in October 2014 Outfront Media (formerly CBS Outdoors) acquired Van Wagner.  Higher profile sales executives transitioned from Van Wagner to Outfront for a period of time, according to certain Linked-In profiles.  Then, in early 2016, two Sales Executives – Gary Grossman and Justin Rinko – formerly of Van Wagner had updated social media profiles detailing their co-founding of and new employment: Silvercast Media.





A visit to Silvercast’s website simply shows a video showing the construction of the Marriott Marquis wallscape display and concludes with showing Silvercast’s logo on that panel!




Also very recently –  in February and March 2016 – there was some very light press about Silvercast with no real specifics regarding the type of assets they did or planned to operate in the media space.




At the same time, we know Clear Channel was originally the agent for the display.  Even as of 3/29/16, Clear Channel continued to show the specific board in its list of Time Square spectacolor assets.