Friday, January 29, 2010

Spanish Radio Network Bustos Media Restructuring To Survive Recession

CEO of Bustos Media LLC says company in default by less than $100 million with lenders, but far from filing bankruptcy

By H. Nelson Goodson
January 29, 2010

Sacramento, CA - Last week, Inside Radio/M Street Publication reported that one of the largest Hispanic owned radio chain syndicated stations was working to restructure "Privately-held Bustos Media is technically in default with its lenders.  It has missed some payments and has broken loan covenant agreements." CEO and founder Amador Bustos confirmed that Bustos Media owes less than $100 million, and there’s no threat of bankruptcy or liquidation.

Amador has notified his employees in 28 radio stations that he owns about the current difficulty to pay lenders. Bustos Media produces nationally syndicated radio formats carried by 55 affiliated stations.
In Wisconsin, Bustos Media owns two Spanish language stations LaGranD WDDW 104.7 FM radio and Television Station LP-WBWT 38 Azteca America in West Allis. Bustos Media also has radio stations in California, Colorado, Idaho, Oregon, Utah, and Washington.
Advertising dollars dried up due to the recession and Bustos couldn't pay the debt incurred to lenders. The lenders have hired radio executive Jay Meyers to work with Bustos on fine-tuning operations. Meyers told Inside Radio it’s a long way from a takeover.
“The lenders are working in a very friendly way with Amador Bustos for an orderly fix of their problems,” Mayers explained to Inside Radio. Alta Communications’ Brian McNeill also confirmed Bustos Media default and said, “The lenders and investors are very much in support of Amador Bustos and the existing management team.” Also, Providence Equity LLC and Opportunity Capital Partners own a substancial amount of equity on Bustos Media.
Bustos said, “We’ll all take a haircut on the equity.”  The Bustos family holds about 10% of the equity now, with the remainder held by Alta Providence Equity Partners and Opportunity Capital Partners. “Hopefully, we’ll end up with some significant recovery down the road, I’m estimating it will take us three years to get back to where we started,” Bustos said.
Bustos Media is operated by Amador and John Bustos, in the 1990's they successfully built a 32-station Z Spanish Network before selling the network to Entravision for $475 million in 2000, including assuming $110 million in debt. Bustos Media and Z Spanish were financed with private equity.
Bustos plans to sell the current radio network within the next three years, once the economy recovers. But, Bustos won't rule out starting another radio network, according to Inside Radio. 

Complete Inside Radio article of Bustos Media restructuring:

Amador Bustos, Chairman and CEO of Bustos Media LLC Bio:

The son of a bracero, or farm laborer, and oldest of seven siblings, Bustos was born in the rural town of Aguililla, Mexico. At age 12, his family moved to California, and a short time later, Bustos’ English was good enough to keep up with his Redwood City classmates. Mahatma Ghandi and Martin Luther King Jr. inspired him to earn bachelors’ degrees in philosophy and ethnic studies and a master’s degree in school administration from UC Berkeley. Bustos served on the Redwood City School Board from 1981-1986, while his father, Amador Palafox Bustos, was a janitor for the school district, according to, May 2006, Prosper Media LLC.

In 2004, Bustos Media raised over $100 million in private equity to build its broadcast company.
In 2005, Hispanic Business Magazine selected Mr. Bustos as one of the top One Hundred most influential Hispanics in the USA.
Mr. Bustos is currently on the Board of the National Broadcasters Association (NAB) and Broadcast Music, Inc. He is a member of the Investment Committee of Hispania Capital Partners; a Chicago based investment fund. Mr. Bustos is also a member of the Board of Directors of American River Bank, a NASDAQ traded Sacramento community business bank. He is also a founding member of two recently approved Hispanic owned Community banks: Plaza Bank in Seattle and ProMerica Bank in Los Angeles.
The Bustos Family is dedicated to improving the educational opportunities for disadvantaged Hispanic youth. In 1996, Amador and Rosalie established the Bustos/Lopez Family Fund through which they have supported over 56 graduating high school senior through their Bachelor’s and graduate degrees.
The Bustos family is also a benefactor of the arts, and institutions of higher education. They have established endowments for the Joe and Isabel Serna Research Center at Sacramento State University. They are also made a major capital contribution to the National Hispanic University in San Jose, California, according to UC Davis Center for Entrepreneurship, Speaker Series, April 9, 2009.

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