iHeart Radio expected to go bankrupt

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  • #28576
    Jeffrey Kopp
    Participant

    iHeartRadio parent warns it may not survive another year Station operator is saddled with $20 billion of debt it took with a $24 billion 2008 leveraged buyout by private-equity firmsThe biggest operator of radio stations in the U.S., the iHeartRadio parent headed by Bob Pittman of MTV fame, will include language in its next quarterly report warning investors that it may not survive another year, according to a regulatory filing.

    http://www.marketwatch.com/story/iheartradio-parent-warns-it-may-not-survive-another-year-2017-04-21-121035436

    #28580
    Craig_Adams
    Participant

    As I posted years ago when Clear Channel changed its name to iHeartmedia. This was the beginning of the company positioning itself to eventually divest its radio stations.

    #28592
    paulwalker
    Participant

    Perhaps one good sign is that some Iheart stations will revert back to local ownership. But I wouldn’t get too excited. The business platform is extremely complicated, and is not a good investment IMO. Watch radio follow newspapers to their death. It may take awhile, but the writing is on the wall, and has been for atleast two decades.

    #28593
    semoochie
    Participant

    I don’t know about all of radio but it seems to me that IHeart owns the lion’s share of hitherto viable AM stations and their continued success is highly in doubt with a breakup!

    #28594
    Andy Brown
    Participant

    The greater fool theory will prevail and continue to prove that there is always money out there looking for a megaphone. The other big groups will grow and perpetuate the broken model fed by CC’s liquidation. They all think they’re smarter, leaner, more efficient . . . ya da ya day ya da.

    Chump Channel spent too much too fast and ballooned out of control a long time ago.

    Anyone that has read this forum anytime in the last 4 years or so should not find this the least surprising.

    #28596
    Alfredo_T
    Participant

    Has anybody else noticed that Clear Channel sold all of its billboards in the Portland area some time ago? See http://clearchanneloutdoor.com/where-we-are/

    This evening, I looked up at some of the big ones along TV Highway in Hillsboro that were previously Clear Channel (and occasionally had advertisements for Z100). They are now owned by Pacific.

    #28604
    Andy Brown
    Participant

    More than likely only iHeart (the radio licenses) will file for bankruptcy. Sales of Clear Channel’s other companies assets means (I think, I’m not a lawyer) that they can keep that money instead of having to give it to creditors who loaned money to their station acquisition orgy once they file.

    #28617
    tombrooks
    Participant

    Andy… I agree with you on that one. Was involved in a Leverage buyout many years ago (Remember Michael Milkin?)The fact that it was made public – their 10-Q or 10-K – can’t remember which – it’s like a slow run on the bank – The bond holders will take the hit – debt for equity and liquidation of every asset they have – At least that’s what ours was – They even sold desks – which were rented back…

    On the other hand, it will be a great opportunity for others to get some great deals on stations…(not me..no money)..but will be interesting to see how it plays out..Broadcasting is still a great business…great cash flow…unless you are a bond holder, sorry to say.. The day of financial reckoning is coming for them – no doubt about it – you can only kick the can down the road so far, before you lose it in a hole….

    #31878
    Steve Naganuma
    Participant
    #31879
    paulwalker
    Participant

    Steve, that link is messed up as it redirects constantly.

    But to your point and what I can make of it before I was redirected, is iheart is throwing a few pennies at the debt. There are probably reasons for that, but I don’t know why. Bottom line, many iheart stations will likely go on the block soon. Perhaps a buyer’s market, if you can stomach this industry.

    #31880
    Steve Naganuma
    Participant

    Odd that the link does not work. Might be because I am on a tablet. Here is the text of the AllAccess article.

    iHEARTMEDIA has made a small move to address the debt that’s coming due this FALL in 2018, and especially in 2019. In a Form 8-K filed with THE SECURITIES AND EXCHANGE COMMISSION, iHEART writes, “On SEPTEMBER 14, 2017, CLEAR CHANNEL OUTDOOR HOLDINGS, INC., an indirect, non-wholly owned subsidiary of iHEARTCOMMUNICATIONS, INC., provided notice of its intent to make a demand for repayment on OCTOBER 5, 2017 of $25.0 million outstanding under the Revolving Promissory Note, dated as of NOVEMBER 10, 2005, between iHEARTCOMMUNICATIONS, as maker, and CCOH, as payee (as amended by the first amendment dated as of DECEMBER 23, 2009 and the second amendment dated as of OCTOBER 23, 2013), and the Board of Directors of CCOH declared a special cash dividend payable on OCTOBER 5, 2017 to CCOH’s Class A and Class B stockholders of record at the closing of business on October 2, 2017, in an aggregate amount equal to $25.0 million, to be funded with the proceeds of the Demand.”
    The filing explains, “iHEARTCOMMUNICATIONS will be entitled to receive approximately 89.8%, or approximately $22.5 million, of the proceeds of the dividend through its wholly-owned subsidiaries. The remaining approximately 10.2% of the proceeds of the dividend, or approximately $2.5 million, will be paid to the public stockholders of CCOH.”

    #32825
    stevewa
    Participant

    Are these gyrations still taking place to allow Bain Capital to extract as much cash out of the business before “harvesting” as Mitt Romney so lovingly put it?

    #32837
    cbaravelli
    Spectator

    No.
    Clear Channel Outdoor ‘Holdings’ (formerly Ackerley’s Pacific Outdoor) stock price has lost in one month 25%. It is a minor player in the billboard market and also losing.
    Holding companies, like bond holders and loan makers, are in secondary positions. Shareholders are tertiary.
    This is an internal transfer from one corporate pants pocket to the other with CCOH shareholders getting something for their investment to keep them somewhat complacent.
    I still think iHeart is the best American radio company and network of all time.

    #32839
    Andy Brown
    Participant

    “I still think iHeart is the best American radio company and network of all time.”

    By what metric? Certainly not profit and loss. Certainly not iHeart stock performance. Certainly not employment figures. Clear Channel/iHeart has done more to destroy the fabric of broadcast as an industry then any other company in history.

    #32873
    cbaravelli
    Spectator

    I make the distinction between bad ol’ Clear Channel and the 2014+ iHeart Media. CEO Robert Pittman and his executive staff are no fools.

    Radio industry revenue is running in place. For iHeart: 2016 revenue – $6.27B [2012 – $6.25]. 2016 expenses – $2.41B [2012 – $2.58B]. 2016 pre-EBITA gross profit – $3.68B [2012 – $3.75B]. 58% margin is outstanding. A cash register. There are more revenues from national and international holding companies and LLCs. For comparison, Entercom (CBS) margins are 23%
    Dominates in 17 of the top 20 radio markets. And you may have noticed number of spots are up.
    Controls new media exposure. Search iHeart to find ALL links on the first two or three pages are positive with some obviously paid for or ‘spiked’ by iHeart.
    Third in new media music (meh) delivery. Fourth in new media music sales redirects.
    Has been nothing like the new iHeart in the past.

    My peer-spective is the music industry helped destroy Radio.v3. Poor quality releases for years. “Play it. Say it.” initiative failed for a reason. 2008 Great Recession and internet growth certainly didn’t help. Lack of local content and quality control are Radio.v4 biggest challenges. How many times have you heard ‘OttO’ screw up and play two program elements simultaneously or none at all? Dare I say the best local radio in the nation is now in eastern Pennsylvania and most of Oregon outside the PDX metro area. Things could be worse. Be thankful you don’t have to listen to the CBC.
    Radio ain’t a hobby. Stop huddling around the Atwater Kent and accept the iDroid.

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