iHeartMedia ‘To Receive Approximately $100M’ for BMI Stake Following New Mountain Capital Deal

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iHeartMedia has revealed that it will receive an approximately $100 million windfall in connection with the recently announces sale of Broadcast Music, Inc. (BMI) to New Mountain Capital. Photo Credit: Pepi Stojanovski

It turns out Broadcast Music, Inc. (BMI) affiliates aren’t the only ones set to enjoy a $100 million windfall stemming from the sale of the performance rights organization (PRO). iHeartMedia has announced that it expects to receive around $100 million for its BMI stake.

iHeartMedia (NASDAQ: IHRT) formally disclosed the incoming payment via a brief release today, a little less than one week after the announcement of the for-profit PRO’s sale to private equity firm New Mountain Capital.

Scheduled to wrap in Q1 2024, the transaction will see BMI shareholders pay out the initially mentioned $100 million to songwriters and publishers, DMN previously reported. (Other proceeds from the sale will be directed towards technology investments, expansion initiatives, and more, BMI higher-ups signaled.)

“The allocation of those funds, while not a distribution of royalties,” New Mountain Capital explained of the $100 million that will reach affiliates, “will be in keeping with the company’s distribution methodologies, which are based on performance levels over a set period of time. BMI will work to finalize an equitable payout plan for this allocation in the coming months.”

Poised to benefit from a similarly sized payday is iHeartMedia, which says “it expects to receive approximately $100M of proceeds related to its equity interest in BMI.”

New York City-headquartered iHeartMedia intends “to use the proceeds for general corporate purposes, which may include the repayment of debt.” According to its newest earnings report, covering July, August, and September of this year, iHeartMedia had $5.23 billion in total debt and $5.02 billion in net debt as of the latter month’s conclusion.

Q3 also brought with it a year-over-year (YoY) decline in multiplatform revenue ($626.38 million, down 5.1 percent) for the iHeartLand operator, fueled largely by slips in broadcast radio ($455.10 million, a 6.1 percent decrease) and networks ($116.33 million, an 8.6 percent falloff), according to the document.

Meanwhile, Samsung-partnered iHeartMedia said that the separately calculated digital audio group had improved by 5.2 percent YoY, to $267.22 million in overall revenue, due mainly to a jump in podcasting ($102.66 million, up 12.5 percent YoY).

Notwithstanding news of the $100 million payment resulting from BMI’s sale, iHeartMedia stock during today’s trading dipped by almost 7 percent to $2.59 per share. Though the price represents a close to 17 percent boost during the past month, it’s also down nearly 57 percent since 2023’s beginning.