April 24th, 2018: iHeartRadio Declares Bankruptcy…

Will iHeartRadio Parent Company Go Bankrupt In 12 Months?

Rori (and Marty, Floyd and Dot) Zendek (CC by 2.0)

iHeartRadio’s parent company, iHeartMedia, will, admittedly, face a very difficult 2017.

iHeartMedia’s equity owners tried to pull off a way to balance the company’s massive debt.  Thomas H. Lee Partners and Bain Capital attempted to restructure some $14 billion of the company’s $20 billion debt.  At the same time, they aimed to get a reduction of what iHeartMedia owes.

The company offered to replace loans with new facilities, and existing bonds with discounted notes that mature at a later date.  In turn, debt holders would receive shares in advertising company Clear Channel Outdoor Holdings.

However, on Friday, a group of iHeartMedia’s lenders signed a cooperation agreement to oppose the $20 billion debt overhaul. The move put pressure on the company to avoid reducing its debt outside of filing for bankruptcy.

Anthony Canale, head of high yield research at Covenant Review, explained how lenders have felt.  Speaking with Reuters last week, he explained why lenders opposed the restructuring deal.

“Bondholders and creditors don’t feel they’ve been offered enough.  The company’s behavior has been extremely aggressive, and may have resulted in some hurt feelings and emotions that may be further complicating this.”

iHeartMedia now admits that their recent strategies may not be successful in the long run. In its filing with the Securities and Exchange Commission, the company said that it may not survive the next twelve months.

“Management anticipates that our financial statements to be issued for the three months ended March 31, 2017, will include disclosure indicating there will be substantial doubt as to our ability to continue as a going concern for a period of 12 months following the date the first quarter 2017 financial statements are issued.”

Bain Capital and Thomas H. Lee Partners acquired iHeartMedia for $24 billion from Clear Channel Communications in 2008.

The company has nearly $350 million in debt coming due this year.  In 2019, the company will have another $8.3 billion of debt coming.

As of writing, the stock sits at $2.40, down 12.73% from its opening price.  The price had dipped to $1.90 earlier in the day. iHeartRadio’s parent company has more than a quarter of a billion monthly radio listeners in the US alone.


14 Responses

  1. Bob

    Is DMN capable of writing an accurate headline? No bankruptcy filing has taken place as of today according to numerous bonafide financial and business news sites. Does DMN have inside information that other news outlets don’t?

    it’s quite possible that a declaration of bankruptcy is imminent but I see no evidence elsewhere that it has actually happened.

    Reply
  2. Remi Swierczek

    Convert Radio, both internet Radio and terrestrial Radio to $100B music store!
    Do the same with 10 STUPEFIED streamers on Ek’s DOPE and 5,000,000 public places to see $300B music industry by 2030.

    Stream ad and sub free and charge for addition to personal playlist at the DISCOVERY MOMENT! Music is the biggest opportunity of digital era and it is immoral to use it as a fertilizer on ADVERTISING and STREAMING FARMS. Let’s start farm music for the well being of all involved nerds!

    Reply
  3. WIll Buckley

    Consolidation, M&A’s this country loves to make the big deals, but often lacks the marketing understanding on the micro level to make it work.

    Radio worked when it was local, good for businesss and good for music. Now? Lost the connection with community, then who cares?

    Spotify, Pandora, where are they headed?

    Reply
    • JB

      It’s either good or it’s bad. Radio has been both on a local and a corporate level. The common denominator is how greedy the owner is and it doesn’t matter if the owner is local or corporate headquartered in San Antonio. Sales ruled over programming for decades and that is what brought radio to its knees. You have to have money but, you need to have integrity.

      Reply
  4. Shit Boy

    Where do these guys get their numbers from when they’re discussing the digital music market pie in 2017 . The market share alone has been introduced to the , quadrillion , world of currency eXtracted by the technology middlewear market direct X eXpress from the legacy elite OS systems. . .:: If you were a tried and true digital music publisher , you’d know that. . .:: Literati X

    Reply
  5. Running Bear

    The 2 new patents on a novel method for streaming digital content has just been issued to inventor Marvin E Marshall and assigned to White Hat Vision. These highly leveraged streaming companies would be wise to give these patents (especially the 2nd) a hard look.

    Reply
  6. RunitRight

    I guess their intention was to shock with the quirky headline? Implying that since they can’t see being in business 12 months from now that their demise is a year away.

    Reply
  7. Maria

    I was sent a legal notice that Iheart is claiming bankruptcy I won a Iheart radio contest back in October 2017 why was I sent this notice did anyone el;se get a legal notice of bankruptcy that won a contest with a radio station?

    Reply
    • mayra

      My husband did!! did you figure out what are you supposed to do with that?

      Reply

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