Radio Industry’s Money-Flings

The money-shuffle has intensified in the radio industry as of late:

Clear Channel iHeartMedia: Still saddled with more than $20 billion in debt – of which more than $8 billion comes due in 2019 – the company’s going to great lengths to shuffle revenue between its subsidiaries to keep on top of its obligations. The latest move involves iHeart’s outdoor billboard division, one of the more financially solvent of the bunch, turning over nearly 90% of its latest quarterly dividends to the parent company.

In addition, iHeart filed papers with the Securities and Exchange Commission recently regarding the potential for its outdoor division to acquire the intellectual property to the words “Clear” and “Channel.” This sounds like the corporate version of scrounging for change in couch cushions; no word on how much those two words, separately or in conjunction, might actually fetch.

iHeart’s recent debt-exchange, for which it traded notes due in 2018 for paper payable in 2021, was classified by Moody’s Investor Services as a combination “distressed exchange (DE) and a Default due, in part, to the extension of the maturity date beyond its initial terms and the company’s very high leverage levels,” further observing that “the company will remain poorly positioned to withstand an economic recession or any material weakness in terrestrial radio in the future.” 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