Liberty Media EXITS iHeartMedia

Liberty Media has exited its business relationship with  iHeartMedia.

According to an iHeartMedia Securities and Exchange Commission filing, Liberty Media offloaded its 5.94 million shares of Class A common stock in an open market block trade in a sale worth upwards of $150 million. Between November 2017 and February 2018, Liberty Media purchased $600 million of iHeartMedia debt for a total of $490 million. After iHeartMedia reduced its debt load through a bankruptcy settlement, the bonds were converted into about 6.9 million shares.

“We appreciate Liberty’s support for iHeartMedia, originally as a holder of debt which then converted into a meaningful equity stake, and we are delighted that they received a good return on their investment,” a spokesperson for iHeartMedia told Variety.

John Malone

Headed by chairman John Malone, Liberty Media continues to hold 78% of satellite broadcaster SiriusXM and 32% of concert promoter Live Nation. The company grouped its three investments, including its previous stake in iHeartMedia, as Liberty SiriusXM Group, a tracking stock that trades on the Nasdaq.

By ending its investment in iHeartMedia, Liberty Media has exited the broadcast radio industry. The iHeartMedia platform is the largest radio broadcaster in the U.S., reaching over 90% of Americans each month through podcasts, AM and FM stations and online platforms. By using its stake in iHeartMedia in conjunction with Live Nation and Sirius XM, Liberty Media had the potential to shape how American audiences interacted with and accessed the music industry’s live and recorded offerings.

For a time, Liberty Media seemed keen to significantly increase its shareholding in the iHeart business, with officials at the US Department Of Justice giving the all-clear last year for it to increase its stake in the broadcaster from 5% to 50%.

Those iHeart ambitions on Liberty Media’s part created some competition law concerns because it already owned a controlling 72% stake in satellite broadcaster SiriusXM, which in turn owns outright personalized radio service Pandora. If Liberty Media also basically controlled the iHeart business, that would make it a very dominant player in the US radio sector, where AM/FM, satellite and online services now all compete for listeners and advertisers.

Particular concerns were expressed in the music community, because as well as controlling Sirius XM, Liberty Media also owns a third of Live Nation, the biggest live music and ticketing company in the world. And those concerns led to the Artist Rights Alliance signing up to a letter asking the DoJ to block any bid by Liberty to become a significant shareholder in iHeartMedia.