IHeartMedia, U.S.’s Largest Radio Broadcaster, Files for Bankruptcy

IHeartRadio’s parent company, iHeartMedia, filed for bankruptcy protection in an attempt to restructure part of the $20 billion debt load that has burdened it since a leveraged buyout a decade ago, on the eve of the 2008 recession. The company announced that it had reached agreements with creditors to reduce its debt by more than $10 billion. It said it would continue to operate its stations during the process. 

According to court filings, iHeartMedia, known as Clear Channel Communications until 2014, paid $1.4 billion in 2017 in interest on its debts. Its media division, which includes the broadcast stations, a popular music app and a unit that syndicates shows by Rush Limbaugh, Sean Hannity and others, had $3.6 billion in revenue and $735 million in operating income. Counting its global business in outdoor billboards, which is not part of the bankruptcy, the company had $6.2 billion in revenue over all.

The bankruptcy is the culmination of iHeartMedia’s yearslong dance with its creditors; a final phase, long expected by analysts, began in Feb when the company skipped a $106 million interest payment. It is also the latest and most high-profile shift in the tumultuous radio business, which has struggled to retain advertising dollars and compete with streaming services like Spotify and Pandora.