Thursday, September 12, 2019
HPS Takeover at Liberman Broadcasting Worries Long-time Staff
By Abel M. Salas
In a letter to Federal Communications Commission Secretary Marlene Dortch and dated August 27th, a group of “concerned employees” at Liberman Broadcasting, Inc. (LBI) have asked the head of the FCC to exercise care and judiciousness before moving ahead with a transfer of the Spanish-language media company’s multiple broadcast licenses to HPS Investment Partners, a global financial asset management group.
Under the terms of a debt restructuring arrangement approved by the Delaware U.S. Bankruptcy Court on April 17, LBI was declared Debtor in Possession and agreed to cede lender and primary lienholder HPS ownership and control of Liberman's media properties as well as 100% of all new equity generated by what was previously a privately held concern.
The letter, as well as a number of supporting documents delivered anonymously to the offices of Brooklyn & Boyle appear to confirm what many in the Hispanic community had feared in the wake of news that Liberman, owner and operator of ten TV stations, 17 radio stations and the Estrella TV network had negotiated an airtight deal with the international hedge fund giant. The compact stipulated that LBI’s principal shareholders, members of the Liberman family file for Chapter 11.
Thus freed of looming obligations to a second set of lenders, the Libermans would furthermore relinquish their 30-year management role, hand over operational responsibility and ownership to HPS in exchange for further infusions of liquidity, giving the financial capital firm free reign to reshape and streamline the fourth largest Spanish-language broadcaster in the U.S. in order to maximize the return for investors who had underwritten what many industry observers have described as a less than friendly takeover.
The letter cites the aggressive imposition of changes and the wholesale elimination of specific television programming segments and alludes to the sudden resignation and disgruntled departure of Winter Horton, Liberman COO of 21 years in order to make way for HPS to install one of their own in the position.
“Rather than promoting one of nearly a thousand employees at LBI to replace Mr. Horton (employees with knowledge and expertise in the Hispanic market…) HPS imposed one of their existing board members as COO of the company…” the letter reveals, adding that the newly appointed executive “lives full time on the East Coast.”
According to the unnamed Liberman staffers who drafted the letter to Secretary Dortch, at the head of the regulatory agency which awards broadcast licenses to qualified applicants since 2002, HPS met with management and began forcing action plans upon specific departments and business units with expected completion dates based on their own prioritization scheme, dates the letter make clear, that precede the actual transfer of FCC licenses. HPS, the letter explains, began what an increasing number of observers regard as a hostile purge on the eve of Horton’s ouster.
In the correspondence, worried long-time Liberman staff members also request a formal FCC investigation of HPS practices, it’s “reckless disregard for established FCC rules and principles” and even goes on to suggest that the Commission should rescind its waiver of foreign ownership rules in the case of HPS, a waiver which was extended by the government body to expedite the review of “the LBI [license] transfer applications…”
Latino community leaders in and around Los Angeles fear the worst is yet to come and point to a decline in Latino media ownership as one of the root causes of the uptick in hate crimes targeting Latinos, many natural-born U.S. citizens. One local observer, who withheld his name for fear of retaliatory action from the global finance juggernaut, said ruefully, “It is the obvious lack of Latino media ownership that has resulted in a glaring absence of realistic portrayals and depictions reflecting our community, its centuries-long presence in this country and its countless contributions to the growth and development of this great nation.
“Since our stories are not proportionately featured across the spectrum of media, most people are unaware that Latinos have served in the U.S. Armed forces as enlisted men since before WWI and thousands made the ultimate sacrifice as a significant percentage of the casualties in WWII, the Korean War and Vietnam, not to mention Iraq and Afghanistan.”
At press time, several calls to the FCC for comment on the correspondence from Liberman staff regarding the concerns address therein have not been returned.
Abel Mark Salas is the Publisher/Editor of Brooklyn & Boyle. He can be reached at firstname.lastname@example.org
at 11:20 AM