The largest radio conglomerate in America, iHeartMedia, has filed for Chapter 11 bankruptcy after accumulating $20 billion in debt.
After reaching an agreement with creditors the company released this statement Thursday morning:
“iHeartMedia has created a highly successful operating business, generating year-over-year revenue growth in each of the last 18 consecutive quarters. We have transformed a traditional broadcast radio company into a true 21st century multi-platform, data-driven, digitally-focused media and entertainment powerhouse with unparalleled reach, products and services now available on more than 200 platforms, and the iHeartRadio master brand that ties together our almost 850 radio stations, our digital platform, our live events, and our 129 million social followers,” said Chairman and Chief Executive Officer Bob Pittman.
“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,” Pittman Continued.
“Achieving a capital structure that finally matches our impressive operating business will further enhance iHeartMedia’s position as America’s #1 audio company.”
Creditors include:
Nielsen (owed $20 million); SoundExchange ($6.4 million); Warner Music Group ($3.9 million); Universal Music Group ($1.3 million); and Spotify ($2.1 million). ASCAP and BMI over $1.4 million while Global Music Rights is looking at a $2 million debt.
Formerly known as Clear Channel, iHeart owns over 850 stations including New York’s Z100. Since being bought out by Thomas H. Lee and Bain Capital in 2008, the company has struggled with keeping an audience. Other musical platforms like Spotify, Apple Music, and Sirius XM contributed to its downfall.
In the past five years iHeartMedia spent more on debt than its earned.
The media company will still continue its iHeartRadio Music Awards, iHeartRadio app, and musical festival.
“They’re not shutting down. They’re going to pay their bills,” Debtwire analyst Seth Crystall says. “If you were listening to iHeartRadio, or going to iHeart concerts, you will not even know the difference.”
Its 90% stake in Clear Channel Outdoor won’t be affected by the bankruptcy claim.
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