On Wednesday (14 March ), iHeartMedia voluntarily filed for Chapter 11 bankruptcy protection, as it looked to “definitively” restructure a debt of over $20bn.
In a statement from the company, which owns over 850 radio stations and the iHeartRadio streaming service, iHeartMedia said, “The agreement reflects widespread support across the capital structure for a comprehensive balance sheet restructuring that will reduce iHeartMedia’s debt by more than $10bn. iHeartMedia, America’s #1 audio company, will continue operating the business in the ordinary course as a leading global multi-platform media, entertainment and data company.
According to Variety, some of the suppliers reportedly owed money include Nielsen ($20m), SoundExchange ($6.4m), Warner Music Group ($3.9m), Universal Music Group ($1.3m), and Spotify ($2.1m). ASCAP and BMI, two prominent performance-rights organizations, have also been listed as creditors of over $1.4m while Global Music Rights is said to be looking at a $2m debt.
While certain subsidiaries such as Katz Media and iHeartCommunications have been affected by this announcement, other iHeartMedia properties such as ClearChannel Outdoor (which iHeartMedia has a 90% stake in) did not commence Chapter 11 proceedings.
Chairman and chief executive Bob Pittman said, “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.”
Pittman added, “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 believed that it has enough cash on hand and revenue coming in to fund and support itself during the proceedings.