iHeartMedia Officially Files For Bankruptcy
Over 850 radio stations are at risk.
Everyone knows that the name of the game, these days, is streaming.
iHeartMedia has filed for chapter 11 bankruptcy. The giant radio/media company has been plagued by falling revenues and piles of debt.
The holding company of iHeartRadio Inc. is the biggest operator of radio stations in the U.S and Canada. They operate on over 850 radio stations.
iHeartRadio has seen advertising revenues drop immensely to major tech companies. Rivals like Spotify and Pandora are taking over the radio game.
“The agreement we announced today is a significant accomplishment, as it allows us to definitively address the more than $20 billion in debt that has burdened our capital structure. Achieving a capital structure that finally matches our impressive operating business will further enhance iHeartMedia’s position as America’s #1 audio company.”
The company is facing $20 billion in debt which had compounded roughly over the past ten years.
- Executives expect the agreement with owners to offload $10 billion of that debt for a financial restructuring will reduce debt enough to keep the company operating with the cash it has on hand.
- Day-to-day operations of its businesses, at least for now, are not expected to be dramatically affected.
iHeartMedia/iHeartRadio's business has taken a hit from audio streamers like Spotify and Pandora
- The company launched a subscription service last year with Napster, which has been successful, but not enough to save the company from the mounting debt.
- Its terrestrial radio business, the largest in the country, also struggled to maintain advertising revenues to offset mounting debt costs.
The company claims they have enough money to go through Chapter 11 bankruptcy
The San Antonia based iHeartMedia bills themselves as a multi-platform media company, and are best known for operation over 850 radio stations.
The bankruptcy filing comes as Spotify prepares for its much anticipated $1 billion listing on the New York Stock Exchange.
While the San Antonio-based company bills itself as a multi-platform media company, it is best known for operating about 850 radio stations across the United States. It also owns iHeartRadio's music streaming service, a popular concert business, and a majority stake in Clear Channel Outdoor.
The company has struggled with falling revenue in recent years, as it competed with streaming rivals like Spotify and Pandora.
The decision of chapter 11 bankruptcy comes off the heels of multiple extensions since March 1st, their deadline was 11:59 PM, March 14.