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

NAB Show Leaves Radio in Shadows

According to reportbacks from the just-concluded NAB Show in Las Vegas, it was a lopsided affair in favor of the future of television. And why not: broadcasters stand to make billions over the next year selling off their spectrum, and those who stay on the air will be rolling out a new digital television standard with new content and datacasting potential.

Meanwhile, the radio industry’s been rocked back on its heels by a slew of bad fiscal news. iHeartMedia, for now, has managed to stave off several billion dollars’ worth of its debt being called in early by angry bond-holders, but the company’s effectively now engaged in increasingly nasty legal maneuvering to decide its debt end-game sooner rather than later. #2 conglomerate Cumulus Media’s still squeezing its broadcast properties also in hopes of keeping bankruptcy at bay. Emmis faces delisting by NASDAQ in early June. Even the relatively fiscally-sound CBS has announced its intent to spin off its entire radio division into a separate company, selling it also seems to be an open option. 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

Congress to Target Pirate Advertisers (and Others?)

All five FCC Commissioners spent more than three hours on Capitol Hill last week being questioned by the House Energy and Commerce Committee during an “oversight hearing,” which is a fancy way of saying “let members of Congress score political points by grandstanding on the FCC-related issues they care about the most.” While the hearing itself was mostly dominated by subjects such as the agency’s upcoming spectrum auctions and proposals to detach set-top TV boxes from the grip of cable service providers, two Congressfolk raised the issue of pirate radio with the Commissioners.

First was Rep. Frank Pallone (D-NJ), who’s been a very vocal supporter of increased enforcement efforts against pirate stations in the New York City metropolitan area. He announced that he plans to draft legislation to asssist in these efforts and lobbed Commissioner Michael O’Rielly a softball question on the state of pirate radio enforcement: in effect, “what should this bill include?”

O’Rielly said that “getting at the money part” of pirate radio was paramount. Many entities advertise on pirate stations; he mentioned concert and club promoters and political campaigns (?) in particular. However, O’Rielly also noted that he did not want such legislation to penalize those who may “inadvertently” assist unlicensed broadcast operations, such as landlords who may not know they’re renting space to a pirate station. Read More

“The Documents Are Not Available”

On Thursday, February 25th — one day before the Radio Preservation Task Force‘s inaugural conference — I traveled to Washington, D.C. to meet up with friend and colleague, Dr. Christopher Terry, who was also attending the conference. Like me, Dr. Terry is a media law and policy scholar who hails from Wisconsin. And also like me, Dr. Terry has been watching with interest the FCC’s foray into definining journalism on the public airwaves.

In his classes, Dr. Terry uses the Commission’s $44,000 fine against WLS-AM for airing newscasts produced by Workers Independent News as a teaching point to explore the FCC’s regulation of sponsored content. In prior posts, I’ve explained how Workers Independent News purchases airtime on selected commercial radio stations to air its newscasts and features. The FCC case stemmed from WLS-AM’s failure to run the required disclaimer that WIN had paid for its own airtime in a small fraction of broadcasts.

But when the FCC decided to sock WLS with such a stiff fine, it made WIN’s legitimacy as a news organization key to its rationale. Unprecedented in the history of U.S. broadcast regulation, the FCC effectively declared Workers Independent News to not be news, thereby justifying such a large forefiture.

Shortly after the FCC’s 2014 decision, I filed a Freedom of Information Act request with the agency for all documents related to its decisionmaking process in the WLS case. Last November, FCC attorneys reported back that they had identified several thousand pages of material…but released less than 90 redacted pages. Among them was the original complaint that kicked off the FCC’s inquiry, which defamed Workers Independent News as an activist organization masquerading as a news outlet. It was on this allegation that the FCC seemed to rest its case. Read More