iHeartMedia Dodges Bankruptcy, Option Remains

iHeartMedia’s lawyers are probably very happy to see May in their rearview mirrors, after dodging a bullet in a Texas courtroom last week. A friendly judge barred the company’s creditors from seeking notices of default on some $6 billion of iHeart’s $21 billion in corporate debt, racked up primarily from pillaging the radio industry over the last 20 years.

iHeart’s creditors were attempting to call out the company for constructing a shell game in an attempt to keep its debt from crushing it. They noticed last year that the company had begun transferring hundreds of millions of dollars in assets to two “independent” subsidiaries named Broader Media and CC Finco. In simple terms, having already borrowed tens of billions against hundreds of stations, thousands of billboards, and countless other media ventures, iHeart moved some of those assets to “new” corporate parents, thereby creating “new” value against which to borrow even more money. Even better, this shuffle protected those assets against existing debt claims. Read More

When Will They Learn: Several Radio Stations + One Network Hijacked

Listeners to at least three radio stations and one (unidentified) radio network got quite an earful last week when their programming was hijacked by an unknown hacker. The intruder, who used a search engine of internet-connected devices to find unprotected audio transfer equipment in radio stations/networks’ airchains, was able to compromise several of them because the targeted stations/networks either never changed the equipment’s default password, or they used a weak password that was easily bypassed.

The hacked stations all broadcast episodes of a comedy podcast devoted to furries, a subculture of people who like to dress up (and oftentimes, have sex) in animal costumery. “FurCast” is defintiely not-safe-for-work material, and the stations spent more than an hour airing them. According to the podcast’s producers, they noted a spike of “hundreds of connections” in podcast-download traffic last week, all of which were coming from hacked radio stations/networks, and were able to cut off the OTA simulcasts by changing the IP address from which podcast downloads originate. Read More

iHeartMedia’s Debt Dance Intensifies

The nation’s #1 radio broadcast conglomerate stands another step closer to defaulting on nearly $21 billion of IOUs racked up during its consolidation and conglomeration spree of the last twenty years. For those just tuning in, iHeartMedia owes nearly $1.4 billion in debt payments between now and 2018, with nearly $200 million of that due this year.

The company announced a curious plan in late 2015 to ask some of its debt-holders to swap existing debt for stock, the idea being to try and retire the pressing debt first and keep the fiscal ship afloat. In practice, iHeart began shifting some of its assets into a subsidiary named Broader Media, which is effectively a subsidiary holding company within iHeart itself. Those who agreed to swap their debt in iHeart would get paid back in Broader Media equity. Read More