iHeartMedia, the owner of iHeartRadio and hundreds of U.S. radio stations, isn’t going anywhere even though it’s carrying $20 billion in debt to bankruptcy.
Declining revenue, a rise in the number of competitors, and a change in listening behavior won’t stop iHeartMedia from feeding entertainment into your ears. The company announced it’ll go through Chapter 11 proceedings but won’t shed assets or condense operations. Instead, iHeartMedia is restructuring its balance sheet and making deals with debtholders to continue business as usual.
With an agreement with debtholders in place, the company’s debt is a somewhat lighter $10 billion. iHeartMedia says it now has enough money to keep the lights on during the bankruptcy process, indicating its 800-plus radio stations will remain on the air.
Here’s a statement from CEO Bob Pittman:
“Achieving a capital structure that finally matches our impressive operating business will further enhance iHeartMedia’s position as America’s #1 audio company.”
Unaffected by the announcement, too, is iHeartRadio. The music streaming service launched almost a decade ago with live content from radio stations as well as curated content for individual users. In recent years, iHeartMedia’s added an optional subscription to the free tier that removes ads and unlocks on-demand music.
The same goes for iHeartMedia’s events. Throughout the year, the company often hosts concerts and other types of gatherings including the iHeartRadio Music Awards. None of the existing schedule will be reduced, and even future events are likely to be booked at a similar pace.
Clear Channel Outdoor, which iHeartMedia owns a large stake in, is not included in the bankruptcy filing.
The future is still uncertain, especially because the company hasn’t laid out a plan to make a comeback. Fewer people are listening to radio stations, and music streaming skews heavily toward names like Spotify and Apple Music. iHeartRadio is free, but clearly the ad-supported model isn’t enough and the subscription offering is overlooked.