iHeartMedia’s IPO could perform decently. But will the company’s top executives run the company into the ground once more?
Two years ago, iHeartMedia faced a massive problem.
Saddled with around $20.6 billion in debt, the broadcast radio giant’s lenders had rejected an overhaul plan.
The company had no choice but to file for bankruptcy.
Of course, the move didn’t affect its top executives – just its lower-level employees.
In its rushed 2018 Key Incentive Bonus Plan presented last year, iHeartMedia CEO Bob Pittman received $9.3 million in bonus payments by the end of 2018. Basically, Pittman received millions for arguably running the company into the ground. Chief Operating Officer Bressler – another executive arguably responsible for the company’s bankruptcy – got $5.3 million. General Counsel Robert Walls earned $900,000.
Now, fresh out of bankruptcy, the company has a brand-new recovery plan.
iHeartMedia’s three favorite letters – IPO.
According to a new SEC filing, the broadcast radio giant filed for an initial public offering (IPO) earlier today.
Competing against established streaming music services like Spotify, Pittman’s company must now provide investors with a compelling reason to invest in traditional radio.
According to iHeartMedia, radio is different than on-demand streaming because it provides “‘companionship.” In this medium, “people look to audio, starting with broadcast radio and the personalities there, as their friend and companion.”
“Radio continues to offer consumers something different in the form of curated, personality-led audio.
“The medium is able to offer influencers a word-of-mouth style conversation, which propels audience engagement and connection in a very effective way.”
To entice potential investors, iHeartMedia now claims it has a monthly audience reach of 275 million listeners aged 6 and above. In contrast, Google and Facebook have reaches of 251 million and 215 million, respectively. In its last financial report, Spotify counted approximately 207 million unique monthly active users (MAUs).
Taking a veiled swipe at the streaming music giant to puff itself up, iHeartMedia wrote,
“Our Differentiated Social Reach – iHeartMedia’s personalities, stations, and brands have garnered 145 million social fans and followers as compared to Spotify’s 28 million and Pandora’s 8 million.
“Our radio personalities engage with their listeners and fans across every major social platform, using technology to extend their deep listener connection and relationships.
“Additionally, as of February 2019, the Company has 19 million monthly unique visitors on Snapchat and 19 million monthly unique visitors on YouTube, which we believe are larger than the audiences of the other major audio players on these platforms.”
But, with the same executives still in charge, will investors buy in?
That remains to be seen.
Featured image by Sam Valadi (CC by 2.0).