The Chapter 11 bankruptcy filing of iHeartMedia represents a startling descent in fortunes for a corporation that owns more than 800 radio stations across the country, including ten of the most powerful signals in the Denver market. The firm once known as Clear Channel insists that it will be business as usual during the bankruptcy process, but its circumstances are already drastically reduced from the period around the turn of the century when it was considered an unassailable broadcasting colossus.
The Denver-area stations owned by iHeartMedia are Channel 93.3 (KTCL), 95.7 The Party (KPTT), 97.3 KBCO, 103.5 The Fox (KRFX), KOA Newsradio (at 850 AM and 94.1 FM), 107.9 KBPI, 630 KHOW, Orange and Blue 760 (KDSP) and 106.7 The Bull (KWBL). The first filing in the bankruptcy case as well as a docket filled with dozens of additional documents put forward on March 14 and 15 are accessible below.
One illustration of the former Clear Channel's muscle can be found in our 2001 feature article "Taking on the Empire," about a lawsuit filed against the outfit by the promotion concern Nobody in Particular Presents. At the time, the San Antonio-based "company and its various subsidiaries own approximately 1,200 radio stations in the United States (and several hundred more overseas)," we wrote at the time. "It also holds Premiere Radio Networks, the country's most prominent purveyor of syndicated radio programming (Rush Limbaugh and Dr. Laura Schlessinger head its talent roster); nineteen television stations; over 700,000 billboards and related advertising forums; and Clear Channel Entertainment, a live-event arm (known until July as SFX) that dominates the concert medium from sea to shining sea."
We added that "mere size, unprecedented though it might be, doesn't fully explain the fear Clear Channel engenders among inhabitants of the radio-and-promotion universe. The company has also earned a reputation for ruthlessness and ethically debatable activities that raise eyebrows, and hackles, even among industry veterans who thought they'd seen it all."
Nonetheless, Clear Channel's swagger began to falter over the course of the decade, and by 2009, local outlets suffered 23 layoffs, hitting such popular personalities as the Fox's G-Man. More layoffs took place in 2012, with the victims including Andy Torri, engineer for KBCO's Studio C sessions. Torri was let go days after a new Studio C album was released.
The branding switch to iHeartMedia didn't make the stations in the corporation's roster immune from the same kind of digital-age revenue downturns that have afflicted the Denver Post, which announced thirty layoffs yesterday. Indeed, the corporate press release that announced the bankruptcy filing acknowledges debt in excess of $10 billion.
The iHeartMedia outlets in Denver remain on the air at this writing, and that's unlikely to change anytime soon. But the days of the company causing competitors to quake with anxiety appear to be over.
Click to access the iHeartMedia voluntary petition for non-individuals filing for bankruptcy, as well as the complete docket of filings in the case to date. Continue to read the aforementioned press release.
iHeartMedia Reaches Agreement in Principle with Stakeholders Across Capital Structure to Definitively Restructure Debt and Further Enhance Position as America’s #1 Audio Company
iHeartMedia, Inc. and Certain Subsidiaries Voluntarily Commence Chapter 11 Proceedings to Implement Agreed Upon Balance Sheet Restructuring
Day-to-Day Operations Will Continue as Usual During Restructuring Process
Clear Channel Outdoor Holdings, Inc. and Subsidiaries Did Not Commence Chapter 11 Proceedings
San Antonio, TX, March 14, 2018 — iHeartMedia, Inc. (PINK: IHRT) today announced that it has reached an agreement in principle with holders of more than $10 billion of its outstanding debt and its financial sponsors. The agreement reflects widespread support across the capital structure for a comprehensive balance sheet restructuring that will reduce iHeartMedia’s debt by more than $10 billion. 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.
“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,” said Bob Pittman, Chairman and Chief Executive Officer. “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.”
To implement the balance sheet restructuring contemplated by the agreement in principle, iHeartMedia and certain of its subsidiaries, including iHeartCommunications, Inc., have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas, Houston Division. Clear Channel Outdoor Holdings, Inc. and its subsidiaries did not commence Chapter 11 proceedings.
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The Company has filed with the Bankruptcy Court a series of customary motions seeking to maintain business-as-usual operations and uphold its commitments to its valued employees and other stakeholders during the process. These “first day” motions, which the Company expects to be granted in short order, will help facilitate a smooth transition into Chapter 11.
iHeartMedia believes that its cash on hand, together with cash generated from ongoing operations, will be sufficient to fund and support the business during the Chapter 11 proceedings.
For additional information about iHeartMedia’s restructuring, including access to Court filings and other documents, please visit https://cases.primeclerk.com/iHeartMedia, call the Company’s Restructuring Information Hotline at (877) 756-7779 (for toll-free domestic calls) and (347) 505-7142 (for tolled international calls), or email firstname.lastname@example.org.
Kirkland & Ellis LLP is serving as legal counsel to iHeartMedia, Moelis & Company is serving as the Company’s investment banker, and Alvarez & Marsal is serving as the Company’s financial advisor.