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Businesses Communications The Almighty Buck United States

Largest US Radio Company iHeartMedia Files For Bankruptcy (reuters.com) 159

The largest U.S. radio station owner, iHeartMedia, has filed for Chapter 11 bankruptcy as it "struggles with $20 billion in debt and falling revenue at its 858 radio stations," reports Reuters. The company has reportedly reached an agreement with holders of more than $10 billion of its outstanding debt for a balance sheet restructuring, which will reduce its debt by more than $10 billion. From the report: Cash on hand and cash generated from ongoing operations will be sufficient to fund the business during the bankruptcy process, said iHeartMedia, which owns Z100 in New York and Real 103.5 KISS FM in Chicago. The filing comes after John Malone's Liberty Media Corp proposed on Feb. 26 a deal to buy a 40 percent stake in a restructured iHeartMedia for $1.16 billion, uniting the company with Liberty's Sirius XM Holdings Inc satellite radio service. Clear Channel Outdoor Holdings Inc, a subsidiary of iHeartMedia, and its units did not commence Chapter 11 proceedings. The company had 14,300 employees at the end of 2016, according to its most recent annual report.
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Largest US Radio Company iHeartMedia Files For Bankruptcy

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  • by nitehawk214 ( 222219 ) on Thursday March 15, 2018 @12:48PM (#56264977)

    ClearChannel is one of the reasons people don't want to listen to terrestrial radio anymore. They have a near monopoly in so many regions, and instantly make radio bland and corporate. I'm a bit surprised their attempts at payola with their awards and festivals haven't saved them.

    • Re: (Score:2, Funny)

      by Anonymous Coward

      This is so true. My spouse and I took a cross-country road trip. We played a game on the way down as we drove. We kept finding that one station in each city that played the exact same feed. Once the radio started breaking up, we would start changing channels to find what station was playing the feed. Didn't have a city that didn't and playing the same 12 songs (or at least it felt like the same 12) made it real obvious. Luckily, when not on the edge of broadcast range, there were plenty of unique stat

    • Entertainment is not like making cars.

      -You wants cars of the same model/year to be identical.

      -If have 100s of stations that play the same EXACT songs you get ClearChannel / iHeartRadio. About 75% of the stations should go.

      And running the SAME advertisements within an hour makes that ad extra annoying.

    • Re: (Score:3, Informative)

      by xski ( 113281 )
      Yes, this.

      When I saw the headline I thought "I'm pretty sure I'm happy about this."

    • by rnturn ( 11092 ) on Thursday March 15, 2018 @01:39PM (#56265351)
      Exactly right. Interesting radio stations that I had listened to for decades were suddenly transformed into bland and boring once they were absorbed by Clear Channel. They became so desperate for ever increasing profits that the music-to-ad ratio has declined to barely above 50 percent. I don't know of anyone who listens to the radio for music any more. Except for the local classical music station that has minimal, announcer-read ads--they're still worth tuning into--and public radio for news, I rarely tune into an OTA radio station any more. All of the stations that have been bought up by these mega-corporations have turned to crap; playing the same corporate-mandated "hits" over and over and run by people who, apparently, really don't like music.
    • This is why it's baffling that they are so much in debt.

      iHeartMedia is basically a advertisement platform that just happens to play music and talk shows once in awhile. Most of their "studio's" are empty since most of their stations are run off of nationwide feeds. Everything they broadcast is tied to advertising, IE (product) digital studios, (product) Sportdesk, (product) news center (prouduct) weather center, (product) traffic report, then to top if all off each broadcast is brought to you by (product).

    • Yes.. corporations, specifically Clear Channel/iHeart killed terrestrial radio.

      On today's corporate radio, controlled by computers from a central location in New York, with no local programming, no local DJs, ever playing anything even remotely interesting or controversial? You never hear protest music. Bob Dylan or Woody Guthrie would never get airplay now... hell, Bruce Springsteen is considered "controversial" by iHeart and if he wasn't a big star, they wouldn't play him at all. Rage Against the

  • I have a love hate relationship with iheart. I love the streaming service, but that what they did the broadcast radio. EVERY station playing the same thing. I can hear 8 country stations on my drive in 6 are iheart and have the same bobby bones programs running. I listen to radio for music not some morning DJ blabbing out his crappy love life. SHut up and play the music.
    • by jwhyche ( 6192 )

      I have a love hate relationship with iheart. I love the streaming service,

      If you really love music then I would suggest you ditch iheart and sign up with spotify. You can have it with or without commercials.

      But if you really want to go back to the days before clear channel get a app like Xiialive and explore the world of shoutcast and icecast. Any one can set up a icecast or a shoutcast station and you can fine lots of independent artist. Lots of crap too, but there are some really good stations that have a shout cast stations. If you like jazz, ie music, its hard to beat

  • this is one of the worst Radio monopolies in America. https://en.wikipedia.org/wiki/... [wikipedia.org]
    • by Nidi62 ( 1525137 )

      this is one of the worst Radio monopolies in America. https://en.wikipedia.org/wiki/... [wikipedia.org]

      I remember when they switched 96.1 in Atlanta over from rock to a Top 40 station (since already having 2 or 3 Top 40 stations in the same market isn't enough). Listening to rock music in my truck before refereeing a football game. Hopped in my truck after the game and it was Top 40. They never put out any warning, and from what I remember they didn't even warn the staff about the switch over. Haven't had good rock music on the radio since. The closest station we have now, every other song has a mandoli

  • by Trailer Trash ( 60756 ) on Thursday March 15, 2018 @01:01PM (#56265097) Homepage

    I am just shaking my head. They own 858 stations and have $20,000,000,000 in debt?

    Holy. Shit.

    That's more than $23,000,000 per station. In debt. Radio stations do not cost $23,000,000.

    I cannot figure out how they've managed to run up $20,000,000,000 in debt. That takes a special kind of talent.

    And, I mean "special" as in "special ed".

    • by Strider- ( 39683 )

      That's more than $23,000,000 per station. In debt. Radio stations do not cost $23,000,000.

      Given the capital cost of building an HD radio transmitter, maintaining the transmitter site, the studios etc... maintaining a radio station isn't cheap either.

    • by tomhath ( 637240 )
      FTFA:

      IHeartMedia has struggled with debt that was taken on to finance a $17.9 billion leveraged buyout in 2008 of what was then Clear Channel Communications Inc...the company spent $1.4 billion on interest payments last year

      It's not hard when you pay $18b for a company that isn't profitable enough to pay the interest on the junk bonds.

    • Radio stations do not cost $23,000,000.

      The typical value of the spectrum for a radio station (just the rights to broadcast on it) are worth more than $23 million. And then the transmitter, etc...

      • Radio stations do not cost $23,000,000.

        The typical value of the spectrum for a radio station (just the rights to broadcast on it) are worth more than $23 million. And then the transmitter, etc...

        Around $100m in the LA area some years ago. That’s the cost of the spectrum of The Sound 100.3 when the station was created. The station was recently sold off for $18m.

        • While the station sold for $18 million, you have to ask what debts it had. After all, Newsweek sold a few years ago for a single dollar. The domain name newsweek.com is worth more than a single dollar.

        • Radio stations do not cost $23,000,000.

          The typical value of the spectrum for a radio station (just the rights to broadcast on it) are worth more than $23 million. And then the transmitter, etc...

          Around $100m in the LA area some years ago. That’s the cost of the spectrum of The Sound 100.3 when the station was created. The station was recently sold off for $18m.

          I should have qualified my statement better. Yes, you can find a radio station that has at some point sold for more than $23,000,000. But not 858 of them. Clear Channel has stations all over the US, so while it's possible and even likely that they own a couple of stations that are worth more than that, they also own a bunch of stations in the middle of nowhere that are priced at a couple of orders of magnitude less.

    • This isn't about radio. This is a company whose business was buying and selling IOUs. Like any derivatives market it will eventually catch up, but not to worry, all the bosses still got paid, took their money and ran.

    • You're looking at this from the wrong perspective. Somewhere banksters and the CEO were able to extract 23 million per radio station. I'm sure a shell company in a tax haven is doing quite well. Perhaps even Clinton was able to monetize this move since he kicked it off. Citation: https://en.wikipedia.org/wiki/... [wikipedia.org]
      • by kqs ( 1038910 )

        Perhaps even Clinton was able to monetize this move since he kicked it off.

        You do realize that iHeartMedia is a conservative media company which was known for filtering criticisms of George W Bush, right?

      • by dryeo ( 100693 )

        You guys should get a legislature, perhaps call it something like Congress, have the people vote for members even. Seems it would be better then having a series of Presidents passing whatever laws they feel will make them rich.

  • by rjejr ( 921275 ) on Thursday March 15, 2018 @01:06PM (#56265127)
    Toys R Us went bankrupt, they had only $5B debt but plenty of stock and store property and we're still selling items. How does any radio corporation get to the point that they are $20B in debt, they basically own nothing of any real worth. Even the stations themselves are small and limited tech. iTunes has been out for years. Napster. Writing has been on the wall for years. Who was loaning or lending this company money? At $10B or $15B in debt people didn't stop to think, hmm, may even we should cut them off? $20B is what it takes. Insane.
    • Toys r us had that debt as a result of a leveraged buyout from Bain and friends.
      • And whattaya know? Guess who owns IHeartMedia.
      • Toys r us had that debt as a result of a leveraged buyout from Bain and friends.

        Banksters strike again.

    • There was significant debt from way back, but the bulk of it was racked up when the company was acquired in a leveraged buyout back in 2006. The way a leveraged buyout basically works is the company being acquired borrows a bunch of money that the buyer uses to pay the current owner. So in this case they borrowed something like 12 billion just for that bit alone. If all goes well, your investment is profitable and can pay off its debts free and clear, but if you don't prioritize getting rid of debt over p
    • Toys R Us went bankrupt, they had only $5B debt but plenty of stock and store property and we're still selling items. How does any radio corporation get to the point that they are $20B in debt, they basically own nothing of any real worth. Even the stations themselves are small and limited tech. iTunes has been out for years. Napster. Writing has been on the wall for years. Who was loaning or lending this company money? At $10B or $15B in debt people didn't stop to think, hmm, may even we should cut them off? $20B is what it takes. Insane.

      I can answer these. My response is meant to be an example and the numbers I mention are not meant to be representative of actual amounts involved.

      Imagine you owe $10,000 on a car and your neighbor, who makes a similar salary, owes $20,000 on his. But imagine he pays $400 a month and the interest rate is 3%. Imagine you have to pay $1000 a month but $900 is interest (you got a terrible loan which we will pretend is even legal) and $100 against the principle. By the time your car is paid off, you wil

      • Thanks for all that. I kind of get it, but still, $17Billion for even 800 radio stations. They're just radio stations. Might as well spend $17B for some carriages for your horse and buggy business. The Nabisco buyout cost more at $25B but that was a huge business with some real assessts and a future, people gotta eat. Nobody thought $17B in debt for radio stations was a bad idea? No wonder the whole world nearly collapsed in 2008.
  • by 93 Escort Wagon ( 326346 ) on Thursday March 15, 2018 @01:06PM (#56265137)

    I seem to recall that radio stations were already failing left and right before the Internet was a thing. It’s hardly surprising that a large corporation whose main business model is the purchase and consolidation of cash-strapped radio stations would in turn fail at some point. It’s basically the old “we sell everything at a loss, but make it up in volume” model.

    • Clearchannel destroyed radio about a decade before the internet hit.

      Lessee, shitty music, twice the commercials, all local DJs canned for someone thousands of miles away. Gee, why don't people listen to the radio anymore?
  • Just like Toys 'R' Us was bought out by KKR and Bain in 2005, ClearChannel was bought by Bain and Thomas H Lee in an LBO in 2008. In both cases the company was saddled with more debt than they could pay off and had to file for Chapter 11.

  • iHeartRadio purchased all of the local independent radio stations in the Seattle area. Each of these stations at one point had their own unique niche. Now they're just generic top-10 playlist genre stations. There is no longer diversity within the market.

    Also, iHeartRadio and Clear Channel are that closely related? I didn't even realize. Clear Channel is one of the most hated companies locally. There was a 20-year dispute between the city of Tacoma and Clear Channel over their lack of maintenance of their b

  • http://www.expressnews.com/bus... [expressnews.com]

    > iHeartMedia financial troubles embedded in 2008 leveraged buyout ....

    Their recent telephone conversation, though, focused on the news that the company, with different owners and now called iHeartMedia Inc., was conducting pre-bankruptcy talks with lenders and bondholders after declaring that the company by February may not be able to meet some of its maturing $20.4 billion in debt.

    The company’s daunting repayment schedule, stemming from the 2008 leverage buyout by

  • a few weeks ago when I heard a song on the radio I liked (One Night Only by the Struts). I overheard it at a Sonic Drive in. I promptly googled some of the lyrics and listened to the song on Youtube.

    Meanwhile Radio is chock full of stuff like Rush Limbaugh and Alex Jones. I don't need that in my head.
  • Most people have moved on to streaming services.

    That left just talk radio. Talk radio's biggest money maker was Rush Limbaugh, but they paid him so much, the company did not net anything.

    • People moved to streaming because radio sucks so hard. In the decade between Clearchannel destroying radio and streaming radio becoming a thing people deserted radio in droves in favor of CDs and hiring buskers to sit in the back seat to provide music. Anything but Crapchannel.
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    • When you ask "Who needs iHeart ?", you're effectively asking "Who needs radio?". I, for one, don't want to have to rely on Internet infrastructure for music and news. I don't have Internet in my car, and I specifically plan NOT to. I seldom have data enabled on my cell phone, and I plan to continue that practice. I like radio because I often hear new stuff that I really like - that keeps me out of the musical 'echo chamber' that results from playing only music I already have. I also hear tuff I don't like -

  • I don't know where I came across this link. It may even have been SlashDot.

    http://radio.garden/ [radio.garden]

    A Google Earth type globe with radio stations lit up as little green dots, zoom in, select radio station, and play it.

  • Seems like a ton of Canadian radio stations have jumped on this bandwagon as well. The app is horrible, and it's nearly impossible to find the "recently played" list online anymore. The older, non-unified system worked way better. Sure it wasn't as easy to search for things but the streams were far easier to access, as were the playlists.
  • One less preinstall bullshit app on the Windows 10 start menu. Yay! Now if only King would go out of business.
  • Sadly, I think this will likely result in even _more_ consolidation in the terrestrial radio market.

    That and probably a bunch of smaller market or fully saturated markets transmitters shutting down.

    Again, less voices, less venue.

  • by Jim Hall ( 2985 ) on Thursday March 15, 2018 @05:47PM (#56266533) Homepage

    For anyone looking for a list of radio stations owned by iHeartMedia, you can find it on their website: list of stations. [iheartmedia.com] They even have it broken down so you can search by City, State, and Genre.

  • by jandrese ( 485 ) <kensama@vt.edu> on Thursday March 15, 2018 @10:43PM (#56267599) Homepage Journal
    As someone who has been driven off of commercial radio by Clearchannel/IHeartRadio all I can say is "about damn time". They took on a ton of debt to buy out all of the local stations and convert them to bland corporate garbage and it's finally coming back to bite them in the ass. I hope the go Chapter 13 and local buyers have to step in to restore the radio stations. I know that will never happen in the real world but I can dream. Clearchannel killed radio.

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