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

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.

Comments

Re:Once known as ClearChannel.

[Sarten-X]

Unfortunately, those locally-run stations usually can't afford to survive on their own. That's why they mostly joined the big conglomerates in the first place.

I've worked at a local radio station. It's not a cheap business. Beyond the equipment costs, there are licensing fees that are essentially mandatory to keep content on the air. Even for talk radio, people want to be paid for their time. If you're going to avoid licensing by producing your own content, you need a studio, with facility expenses. Then, of course, you have all of the overhead of handling the technology involved, which today involves a significant IT budget, as well as the usual communications link to the transmitters, transmitter space rental, and so on...

My station was pretty much just the hobby of a few wealthy listeners. Some folks dump money into a boat-shaped hole in the lake, but these folks likes to burn their cash at the top of an antenna tower. Our advertising income barely covered the electricity costs.

Radio has been dying for a long time

[93 Escort Wagon]

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.

Re:Not surprising.

[Strider-]

I dunno, my car's radio is permanently stuck on CBC Radio 1 when in Canada, or the local NPR affiliate when in the US. But then, I'm a left leaning socialist (at least based on some people's political spectrums). I enjoy the various shows for being thought provoking, topical, and exposing me to ideas and things that I often do not agree with. If I was just snarfing down podcasts, the chance of me listening through something that I don't agree with are significantly smaller. But doing that is good for my well being.