iHeartMedia Beyond Borrowed Time

3/15 Update: Today iHeartMedia filed for Chapter 11 bankruptcy protection, after coming to a deal with a viable cross-section of its creditors to wipe some $10 billion in debt off of its balance-sheets…leaving the “restructured” company with about $10 billion left to pay down. Some creditors, who hold eight to nine figures of this debt, will be wiped out, but it’s too early in the process to tell just who will get screwed the most. Just today, iHeart tendered nearly 20 filings with the U.S. Bankruptcy Court in Texas’ Southern District – and those to whom the company owes money, as well as other interested players looking to intervene, have filed another 70+, suggesting this process will not be smooth nor speedy. [Original post follows below.]

What a strange way to go bust. After spending years telling the public that all was well – consolidation, automation/syndication, and cost-cutting was “good for radio” and tens of billions of dollars of debt was of little to no concern – Clear Channel iHeartMedia is finally preparing to pay the piper.

On February 1, the nation’s largest radio broadcast conglomerate welshed on a $106 million dollar interest-payment, triggering a 30-day countdown to default. As the clock ran down, on March 1 the company also skipped an additional $138 million in interest-payments, all in the hopes of forcing its creditors to the table to hammer out a soft landing in Chapter 11 bankruptcy, similar to what Cumulus Media did late last year (though Cumulus was only in one-tenth the debt that iHeart is, and Cumulus’ reorg-timetable has also hit some snags).

In between skipping these payments, iHeart tendered a restructuring offer to its lenders that seeked to reduce the company’s total debt from nearly $21 billion to $5.5 billion, all of which would be expected to be repaid over five to seven years. In exchange, “senior lenders” would receive an 89.5% equity share in the company, including 100% ownership of Clear Channel Outdoor – the most healthy division in the iHeartMedia constellation, and the one that iHeart itself’s been drawing money from over the last few years in order to juggle its crippling debt. Bain Capital – the private-equity firm which more than doubled iHeart’s debt when it took the company private in 2008, setting it up on the crash-trajectory it faces now – would walk away with less than 2% of the restructured company. Read More

Fiscal “Threat” Posed By NY Pirates Belied By Broadcasters’ Own Data

As a part of the campaign now underway to bring the (nonexistent) hammer down on unlicensed broadcasting in the New York metropolitan area, licensed broadcasters are alleging a variety of “harms” caused by pirate stations. Many of them are vastly overblown, such as the threat of interference they pose to a variety of communications networks, dangers from uncontrolled radiation — and, in the newest charge, economic hardships they cause to licensed stations.

The contention that pirate radio stations infringe on the radio industry’s right to make mad profits was first floated in an April 2015 blog post by Republican FCC Commissioner Mike O’Rielly; he claimed unlicensed broadcasting “causes unacceptable economic harm to legitimate and licensed American broadcasters by stealing listeners.” Read More

O’Rielly Outlines Anti-Pirate Agenda for 2016

Speaking at the Country Radio Seminar last week, FCC Commissioner Mike O’Rielly laid out several items he’d like to make part of radio’s regulatory agenda this year. And true to form, the man who’s made pirate radio a personal crusade has big plans to try and wipe out what he calls “poison ivy in the garden of the radio spectrum.”

O’Rielly acknowledged that the largest concentrations of unlicensed broadcasters are in America’s cities, such as New York, Boston, and Miami, but claims that “the problem is expanding rapidly,” and it represents “an attack on the integrity of our airwaves – an attack that must be confronted and defeated on no uncertain terms, lest it continue to push forward.” Read More

Radio Preservation Task Force Convenes in D.C.

Two years ago, the Library of Congress’ National Recording Preservation Board founded the Radio Preservation Task Force. Initially a collection of about 100 radio history scholars and archivists, the RPTF now counts more than 150 members and 300 member-archives.

In 2015 the Task Force conducted a multi-phase survey of existing radio recording archives and identified caches heretofore lost to history, particularly as they related to noncommercial and educational broadcast stations. Enriched by this metadata, where do we go from here? Read More

NextRadio Cuts Costs to Spur Adoption

It’s been a good year for NextRadio. The Emmis-developed smartphone application that enables FM listening on compatible devices is making great headway with wireless carriers. After paying Sprint to become the first-adopter, well-coordinated lobbying and social media campaigns this summer convinced T-Mobile and AT&T to request that the device manufacturers they work with enable FM reception. (Verizon remains a holdout, but that campaign continues).

With the consumer-side adoptive trend gaining momentum, efforts are now afoot to bring more broadcasters into the NextRadio fold. The back-end system that broadcast stations interface with is called TagStation; it maintains the NextRadio directory, provides all images and supplementary content to the audio broadcast, and manages the in-app advertising experience. Stations can sign up with TagStation for free, which means they’ll be listed in the NextRadio app and can display their logo to users. Read More