iHM Confirms Bankruptcy Hearings Set

iHeartMedia is expected to have confirmation hearings next month related to its Chapter 11 bankruptcy filing earlier this year, allowing the company to emerge with $5 billion in debt rather than the $20 billion it had amassed when it filed for bankruptcy protection earlier this year.

Bob Pittman said the move will free up the company to use more of its earnings on “other things” than paying its debt. He said iHeartMedia isn’t looking to acquire any more companies. However, he said, it does plan to be more active in the digital advertising space.

Audio consumption and the complexity of audio advertising is growing across some of the largest streaming platforms. According to a report by Edison Research and NPR earlier this year, 18 percent of Americans—or about about 43 million—now own a smart speaker. A quarter of those surveyed said they listen to audio most often using a smart speaker, while only 17 percent cited AM/FM radio as their medium of choice.

“Suddenly, audio is the shiny new thing, and we want to make sure we’re completely prepared for that demand,” Pittman said. “You don’t get many chances to be a shiny new thing.”

Apple is also reportedly eyeing iHeart as a shiny object, though in a different light. According to the Financial Times, Apple is considering taking an equity stake in iHeart as a way to boost its streaming service. A deal, reportedly worth “tens of millions,” could also be a marketing partnership rather than a direct investment, according to FT.

Pittman declined to comment on the report, according to AdWeek.

The latest bankruptcy plan outlines the New Term Loans to be issued by parent company iHeartCommunications.

They include: an Asset-Based Loan of $450 million with a five-year term; a Term Loan of $3.5 billion with a seven-year term; $800 million in secured notes with a seven-year term; and $1.45 billion in unsecured bonds with an eight-year term. 

The Plan also lays out the salaries of chairman and CEO Bob Pittman and COO and CFO Rich Bressler – both of whom who will make $1.5 million in salary per year and whose annual Target Bonuses will be $3.4 million.  Note that these figures are for the year 2019 and beyond that changes in the employment terms are at the discretion of the board of directors.