iHeartMedia could strike a deal that lightens the burden its $20 billion debt carries. From a report in the Financial Times, the company and Apple are reportedly engaged in negotiations over a possible acquisition.
Apple wouldn’t purchase the entire company, but its stake would lead to significant input in operations for more than 850 U.S. radio stations. The Cupertino-based company has expressed interest in increasing distribution for Beats 1. Headed by Zane Lowe, the digital station remains a priority and does well with young listeners.
By leveraging hundreds of stations nationwide, Beats 1 could reach millions of listeners who are unfamiliar. Also, Apple Music could be promoted to no end. Apple would attract more subscribers to its premium service after listeners get a taste for it on iHeartMedia-owned stations.
The two sides are on completely different paths. While the growth rate for Apple Music continues exploding, iHeartRadio can’t seem to keep up with other music streaming rivals. Radio stations are also under pressure from these modern alternatives.
Earlier this year, iHeartMedia filed for bankruptcy. The company said it would lower debt to $10 billion, but there’s no word on whether or not that figure has been reached. iHeartMedia didn’t unload any assets during Chapter 11 proceedings. It’s unclear what exactly, if anything, changed since last year.
The discussions are in a preliminary stage, but Apple’s not shy about diving further into music. It revolutionized the industry with iTunes more than a decade ago, and there are always renewed attempts to do so again.
Last month, Apple completed its Shazam acquisition. This month, Apple and Genius forged a partnership. Its music streaming service, Apple Music, continues getting pushed on iOS devices as well as Mac and the HomePod. With Spotify’s lead not jumping too far ahead, Apple thinks it can catch up over time.
Apple’s deal wouldn’t erase the massive amount of debt iHeartMedia tacked on, but it’d ease long-term viability concerns. While not perfect, Apple typically figures out how to modify products and services for the better.