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Business News Media
US radio giant iHeartMedia heading out of bankruptcy
By Chris Cooke | Published on Wednesday 23 January 2019
iHeartMedia, America’s biggest radio broadcaster and owner of the iHeartRadio streaming platform, is heading out of bankruptcy after a judge approved the company’s latest restructuring plan.
It’s hoped that said plan will allow iHeart to put behind it years of uncertainty caused by a massive debt-load which was in turn caused by a stupid ‘leveraged buyout’ of the business back in 2008. Assuming that works, it will ensure that the media firm is able to begin with some certainty the years of uncertainty about to be faced by the entire radio industry. Good times.
iHeart formally entered the so called chapter eleven bankruptcy process last March, though it had been a long time coming. Since then negotiations have been ongoing with the firm’s creditors, some of whom only agreed to the new judicially approved restructuring plan last week. Under that plan, the company’s debts will be cut from $16.1 billion to a mere $5.58 billion. Yeah, just $5.58 billion. Lovely.
The restructuring will also see iHeart’s outdoor advertising division, which still uses the firm’s old brand name of Clear Channel, spun off as a separate company. The billboards business was never formally part of the bankruptcy proceedings. Meanwhile, back at iHeart Central, CEO Bob Pittman and CFO Rich Bressler will stick around to implement the plan and move the business onwards and upwards, with both signing new four year contracts with the company.
Commenting on all this, the there mentioned Pittman told reporters yesterday: “We are delighted to reach this significant milestone in our restructuring process, which will give us a new capital structure that matches the strong operating performance of our business. iHeartMedia’s unique place in the advertising world perfectly positions us to take advantage of the renaissance underway in audio”.
Ah yes, the renaissance currently underway in audio. That’s code for an entire generation of young consumers shunning radio, but everyone in the traditional radio industry hoping that they can jump on the podcast bandwagon now it’s starting to become lucrative for a small premiere league of podcasters. Either that, or they’ll try and grab the more mainstream ad-funded end of the streaming music market which, you know, will surely become profitable one day somewhere somehow for someone.
Eternal optimist Pittman reckons opportunities abound and that iHeart is just the kind of company to capitalise on them. After all, he said, “our ability to advance through the restructuring process this smoothly is a testament to both the strength of our operating business and the strong support of our stakeholders, including our debtholders who will become our owners, our advertising partners and our operating team”.
