Largest US Radio Company Files For Bankruptcy | Zero Hedge
Description: "The agreement ... is a significant accomplishment, as it allows us to definitively address the more than $20 billion in debt that has burdened our capital structure," CEO Bob Pittman said.

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## Will the societal collapse cross the border to the USA?

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“Complicated days are coming, I won’t lie to you. The wave of violence isn’t going to end . . .” he said.

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## Venezuela's Inflation Surges to A New High: 7459%

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After backing off over the past month and a half, Venezuela's hyperinflation is surging again, making a new high of 7459% yr/yr.

# Largest US Radio Company Files For Bankruptcy

On Thursday, iHeartMedia - the largest radio conglomerate in the US - finally succumbed to its enormous debt burden and filed for a long-anticipated Chapter 11 bankruptcy protection (iHeartMedia Inc., 18-31274, U.S. Bankruptcy Court, Southern District of Texas) after the company and a majority of its creditors reached an agreement for a prepack deal to eliminate tens of billions in debt while the company continues to operate.

After trying to negotiate a deal with creditors since last March, the company said in a statement that it had reached an agreement in principle with investors holding more than $10 billion of its debt, along with its private equity owners. The pact, intended to give the company a framework for a speedier reorganization, would cut iHeart’s debt by more than $10 billion, it said.

"The agreement ... is a significant accomplishment, as it allows us to definitively address the more than $20 billion in debt that has burdened our capital structure,” Chief Executive Bob Pittman said.

Based in San Antonio, iHeart controls 856 US radio stations and employs 17,000 workers worldwide, along with Clear Channel Outdoor Holdings, the largest billboard company in the world. iHeart’s traditional businesses - the radio stations and the Clear Channel Outdoor billboard unit - contribute the bulk of the company's revenue. The Chapter 11 filing didn’t include the billboard unit.

iHeartMedia said it believes it has enough cash on hand, and will earn enough through regular business operations to keep its business running through the restructuring talks, although in light of the recent Toys "R" Us liquidation which took place six months after that particular Chapter 11, we doubt many existing employees will stay there long.

Given the enormity of the debt, Bain Capital and Thomas H Lee who LBOed the company on the eve of the financial crisis in a massive $27 billion deal which was troubled from the start, will surrender most of their ownership stake per the WSJ.

> Recent talks had centered on a plan to hand 94% of the equity in iHeartMedia’s radio business and all of the equity in Clear Channel Outdoor to senior creditors led by Franklin Mutual Advisers Inc. The company and its creditors had been haggling for weeks over how much of the remaining 6% of equity in the radio business should go to the company’s junior bondholders and private-equity sponsors.

Equity stakes had been a key sticking point in recent talks, with creditors demanding almost all of iHeart and 100 percent of its healthy Clear Channel unit according to Bloomberg. Malone’s Liberty Media sought to break the logjam late in February by offering $1.2 billion in new loans in return for a 40% stake. JCDecaux SA, the world’s biggest outdoor-advertising agency, also has expressed interest in buying some of Clear Channel’s assets.

To be sure, bankruptcy was only a matter of time: over the past five years iHeartMedia has spent more on debt payments than it earns. With more than $8 billion in debt maturing next year, the company began talks with creditors on a deal to swap a big chunk of debt for some of its equity. This isn't the first piece of depressing news for the waning radio industry in recent months: The iHeart filing comes three months after Cumulus Media, the No. 2 radio broadcaster, filed for bankruptcy.

Meanwhile, there are questions about the company's ultimate viability.

Radio still has enormous reach, but like print, the advent of digital advertising has siphoned off a reliable revenue stream, and left advertisers unwilling to pay the premiums they once happily accepted. iHeart's broadcast stations still reach a staggering 265 million Americans, more than any other media company (including Google and Facebook). However, newer media such as Spotify’s streaming service and SiriusXM’s satellite broadcasts have cut into the audience and put a damper on sales. IHeart, led by Chief Executive Officer Robert Pittman, countered with its own streaming services and a live-events business offering concerts and awards shows.

iHeart's most valuable asset - in the eyes of its creditors - is Clear Channel Outdoor Holdings, a subsidiary to focuses on billboards. Two years ago, the company rolled out a couple of on-demand subscription services to try and compete with Spotify and Apple Music, which were eating into radio's revenues. They have not lived up to the company's hopes.

As Variety points out, among the music companies listed as creditors on the iHeart docket are Nielsen, owed $20 million, SoundExchange, owed $6.4 million, Warner Music Group, $3.9 million, Universal Music Group, $1.3 million, and Spotify, $2.1 million. Performance-rights organizations ASCAP and BMI are each owed slightly over $1.4 million while Global Music Rights is looking at a $2 million debt.

As Bloomberg notes, the bankruptcy caps a yearlong standoff with lenders and bondholders on its latest debt-cutting plan. The deadline was extended more than 20 times as negotiators exchanged proposals and iHeart sweetened the terms. The current attempt at an accord followed at least a dozen debt revisions over the past decade.

The full bankruptcy filing is below.

Tags
Business Finance
Broadcasting - NEC
Outdoor Advertising
Radio Broadcasting
Music, Music Video Production & Distribution
Advertising & Marketing - NEC
Entertainment Production - NEC
Social Media & Networking
Internet Services - NEC

## Comments

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QueenDratpmurt Thu, 03/15/2018 - 07:44 Permalink

Winning.

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Whoa Dammit QueenDratpmurt Thu, 03/15/2018 - 07:54 Permalink

Bain Capital strikes again with one of its LBOs.

I don't know how anyone can stand to listen to their computer programmed radio stations with songs no one ever wanted to hear to begin with endlessly repeated on a 1 hour loop.

In reply to Winning. by QueenDratpmurt

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Juggernaut x2 Whoa Dammit Thu, 03/15/2018 - 07:58 Permalink

radio stations that were selling for $150M 15 years ago are now being bought for $15M. The real scam is that 501(c) Non-profits are buying up stations like they did with WLUP in Chicago and turning then into Christian music stations.

In reply to Bain Capital strikes again… by Whoa Dammit

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Took Red Pill Juggernaut x2 Thu, 03/15/2018 - 08:09 Permalink

First it was the newspapers. Now the radio stations. Next TV networks. I say good riddance!

In reply to radio stations that were… by Juggernaut x2

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mayhem_korner Juggernaut x2 Thu, 03/15/2018 - 08:12 Permalink

Why would that be a "scam"?

In reply to radio stations that were… by Juggernaut x2

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Pollygotacracker Whoa Dammit Thu, 03/15/2018 - 07:58 Permalink

No disc jockeys, no music variety. When driving I bring my own CD's. Much better than commercial radio.

In reply to Bain Capital strikes again… by Whoa Dammit

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j0nx QueenDratpmurt Thu, 03/15/2018 - 07:55 Permalink

Has this company fired ALL of its executive management and terminated the board and replaced them? If not then that's where they should be starting.

In reply to Winning. by QueenDratpmurt

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dirty fingernails j0nx Thu, 03/15/2018 - 08:04 Permalink

Nonononono. You got it all backwards. You fire 3/4 of the staff, eliminate bennies, give lots of talks/memmos about "belt tightening, sacrifice, etc" and collect fat bonuses or bail out with golden parachutes

In reply to Has this company fired ALL… by j0nx

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Dickweed Wang QueenDratpmurt Thu, 03/15/2018 - 07:58 Permalink

This company is a perfect example of what's wrong with the media apparatus in the USA. One company controls over 850 radio stations. Thanks Slick Willy . . .

In reply to Winning. by QueenDratpmurt

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Willfully Nude QueenDratpmurt Thu, 03/15/2018 - 08:02 Permalink

If only they got some of that handy dandy tax payer funding....maybe like ....amazon

In reply to Winning. by QueenDratpmurt

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Captain Nemo d… Thu, 03/15/2018 - 07:46 Permalink

iHeart will go on now ...

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venturen Thu, 03/15/2018 - 07:48 Permalink

just more fraud....

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archie bird Thu, 03/15/2018 - 07:48 Permalink

is this a result of disinvestment of advertising dollars from Rush Limbaugh's show? as i recall there were activists contacting adverstisers about his derogatory remarks regarding women and so forth.

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Stan522 archie bird Thu, 03/15/2018 - 07:55 Permalink

Derogatory, or perceived derogatory by groups of snowflakes?

In reply to is this a result of… by archie bird

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dirty fingernails archie bird Thu, 03/15/2018 - 08:01 Permalink

Fuck Limpbaugh and his incessant half-truths and distortions. Mr "Drugies should be executed' -oopsie, I have a problem(s)

In reply to is this a result of… by archie bird

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mayhem_korner archie bird Thu, 03/15/2018 - 08:07 Permalink

Of course. The ability to service $20B in debt rests on a single radio program.

In reply to is this a result of… by archie bird

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analyser Thu, 03/15/2018 - 07:48 Permalink

This does not look like recovery , more like Trumpdepression coming

Dead canary

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mayhem_korner analyser Thu, 03/15/2018 - 08:02 Permalink

Because technology has made radio a less important advertising channel, and a highly leveraged company in that space didn't see it coming?

You do understand that Netflix's market cap is far greater than Blockbuster's ever was, right?

In reply to This does not look like… by analyser

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W270 analyser Thu, 03/15/2018 - 08:06 Permalink

Don't confuse your depression over Trump winning with the country still fighting it's way of the worst recovery by BHO's socialist policies. Did you read the article or just use Ctrl V with your standard drivel?

In reply to This does not look like… by analyser

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Juggernaut x2 W270 Thu, 03/15/2018 - 08:11 Permalink

BHO dumped trillions into the moribund economy and Trump will do the same to no avail.

In reply to Don't confuse your… by W270

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cossack55 Thu, 03/15/2018 - 07:48 Permalink

Bain Capital.....LOL

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Wahooo cossack55 Thu, 03/15/2018 - 08:04 Permalink

They're awful. Just fucking clueless consultants, and I say that from experience.

In reply to Bain Capital.....LOL by cossack55

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Philo Beddoe Thu, 03/15/2018 - 07:51 Permalink

The only music worth listening to on the radio are classical music stations. Pretty much commercial free and one somebody does talk you fall asleep.

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Blackfox Thu, 03/15/2018 - 07:52 Permalink

"If I owe the bank $10000 it's my problem. If I owe the banks $20 billion then it's the banks problem."

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ZENDOG Thu, 03/15/2018 - 07:53 Permalink

Break them up into little pieces......bigger is not better.

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EuroPox Thu, 03/15/2018 - 07:53 Permalink

So, $20bn of debt and 17,000 workers - that is $1,176,479 of debt per employee. At a 5% interest rate, each worker would have to generate $55,000 cash each year to pay the interest bill alone. How many of them can do that I wonder...

No great surprise that all this 'financial engineering' (Toys R Us, Claires, etc.) is collapsing. I bet it looked great on the spreadsheet but the real world is a bitch.

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jmack Thu, 03/15/2018 - 07:53 Permalink

"Borrow too much money to consolidate and become the largest in an industry, then declare bankruptcy to get rid of the debt burden." how to become a billionaire.

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overmedicatedu… Thu, 03/15/2018 - 07:54 Permalink

bezos could have run forever with this biz..cause he has unlimited credit at some bank us normals never get near, much less hear the banks name.

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ebworthen Thu, 03/15/2018 - 07:54 Permalink

iHeart the failure of cardboard companies.

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BandGap Thu, 03/15/2018 - 07:56 Permalink

Chock full of satanists, from the management to the prefabricated "artists" they hold so dear.

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ToSoft4Truth Thu, 03/15/2018 - 07:57 Permalink

Who still listens to radio? Waze did away with the last reason, local traffic reports.

Are any of you still paying for cable TV? C'mon. Xfinity?

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Catahoula Thu, 03/15/2018 - 07:58 Permalink

Poor bond holders

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Infinite QE Thu, 03/15/2018 - 07:59 Permalink

Will now be bought for pennies by a kosher nostra associate of the Orange Yeltsin. MIGA!

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Davidduke2000 Thu, 03/15/2018 - 08:01 Permalink

bob pittman ceo, another joo bite the dust.

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Sonny Brakes Thu, 03/15/2018 - 08:01 Permalink

Well deserved. Their product is nothing more than one long infomercial sparely sprinkled with globalists' agenda. No one's down for that. My ears are not for sale.

Riddle me this iHeart, why am I still listening to the same cuts from the 80s and 90s over and over being announced like they were the latest hits? What's the problem?

'cause I still haven't found what I'm looking for

It wasn't a good song when it came out and it hasn't gotten any better.

Listeners are looking for subversion and the radio lady thinks that:

I work in an office, I get my summers off, I spend my summers at the cottage; I need advice about how to recover from a hangover on Superbowl; I need guidance when it comes to keeping the pounds off at Christmas, yes Christmas, there, I said it; I need the weather and traffic every ten minutes; every movie coming out of Hollywood each week is better than the movie they tried to push down my throat last week; etc...

That shit gets old fast. And for God's sake, why do radio talk show hosts keep interrupting themselves by telling us what coming up in the next hour. Get to the goddamn point.

I've timed it out and more than 50% of radio airwaves are commercials even when they give you the impression that they're doing a show. Saturdays and Sundays are the worse, but some stations are selling their evening airwaves to the highest Shiller. It's bad, real bad, and I'd rather listen to myself fart than listen to STUPID down DUMBING radio advertisements.

The problem with businesses today is that they are only in it for the money and the people who work for them are expected to be in it for the opportunity to be prostitutes. It won't end well.

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analyser Thu, 03/15/2018 - 08:02 Permalink

Short Amazon in Trumpdepression. In deflation , amazons weak margins will get hit. Currently the highly profitable AWS division is subsidizing the lossmaking package business. Higher sales, higher losses and this before the big deflation. The stock is worth 0 if we get 30 percent deflation

Trumpdepression www.canarydeath.com

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Wahooo Thu, 03/15/2018 - 08:03 Permalink

Spotify’s streaming service and SiriusXM’s satellite broadcasts have cut into the audience and put a damper on sales.

No kidding! Who wants to listen to mind-numbing commercials like "I love my windows" or "My number two doesn't look like a number two".

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dobermangang Thu, 03/15/2018 - 08:03 Permalink

You can listen to old top 40 countdowns on their site from the 70's and 80's. Very cool. No commercials either.

https://www.iheart.com/live/Classic-American-Top-40-6545/

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NYC_Rocks Thu, 03/15/2018 - 08:04 Permalink

Proving yet again that debt and equity aren't that different. They are both claims on a business with different contract terms. Too many companies are overleveraged thanks to the Fed subsidizing the market. Debt looks "cheap" and "less dilutive" until it isn't. The investors deserve what they got.

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Hillarys Server Thu, 03/15/2018 - 08:08 Permalink

What's a radio?

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JohannSennefelder Hillarys Server Thu, 03/15/2018 - 08:13 Permalink

I have one in my truck. It only plays Mexican sounds.
I think it is broken...

In reply to What's a radio? by Hillarys Server

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Mustahattu Thu, 03/15/2018 - 08:09 Permalink

iheart shaved pussy.

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Indelible Scars Thu, 03/15/2018 - 08:12 Permalink

What? $20B? That's nothing. Just get a loan.

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