SA-based radio giant iHeartMedia files for bankruptcy

Ann Santiago
March 17, 2018

In a statement, iHeartMedia says it has reached an agreement in principle over balance-sheet restructuring with investors who hold more than $10 billion of its outstanding debt and its financial sponsors.

In court papers, iHeartMedia Treasurer Brian Coleman said the company had "encountered significant and unexpected macroeconomic and industry-specific headwinds" that limited its ability to generate cash flows, grow businesses, and satisfy its debt obligations.

In Little Rock, iHeartMedia owns four radio stations: 105.1 The Wolf, KMJX-FM; 100.3 The Edge, KDJE-FM; KSSN 96, KSSN-FM; and Hot 94.9, KHKN-FM, which launched Tuesday.

It also operates iHeartRadio's music streaming service, a popular concert business, and a majority stake in Clear Channel Outdoor.

According to court filings, iHeartMedia, known as Clear Channel Communications until 2014, paid $1.4 billion a year ago in interest on its debts.

Radio chain iHeartMedia filed Wednesday for federal bankruptcy protection, saying it needs time to renegotiate deals with its creditors and reorganize its business, one beset by dropping listenership and competition from satellite and online sources of audio.

"Ultimately, when they come out of bankruptcy, they will be in a much better position", Vitanza said. Over the past five years, the company has spent more on debt payments than it has earned.

The company has seen seen its debt grow since it was acquired in a leveraged buyout in 2008 by private-equity firms Bain Capital and Thomas H. Lee Partners. They're going to pay their bills. JCDecaux SA, the world's biggest outdoor-advertising agency, also has expressed interest in buying some of Clear Channel's assets.

Shares of the company lost 75% of their value during the second six months of 2015 and have not recovered since.

Click to access the iHeartMedia voluntary petition for non-individuals filing for bankruptcy, as well as the complete docket of filings in the case to date. By 2021, the report projected, that figure, for terrestrial broadcast stations, would reach only $16.6 billion, with a 10-year compounded annual growth rate of just 0.425 percent.

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