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Marketwatch: iHeart Radio Parent Warns it May Not Survive Another Yearl

In fairness to the old guys, if iHeart were to be sold off piecewise, there would probably be quite a number of properties available that some modestly wealthy folks could use as a playtoy.
 
I know a guy in Idaho who actually is a 75-year old Oldies DJ. Makes a pretty good living at it too.
 
PTBoardOp94 said:
In fairness to the old guys, if iHeart were to be sold off piecewise, there would probably be quite a number of properties available that some modestly wealthy folks could use as a playtoy.
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They don't have to wait. There are hundreds on the market now. iHeart still have a bunch in their Aloha Trust for sale.

The reality is that no one is rushing out to buy radio stations. If so, Jeff Bezos would be the first in line. Instead he bought the Washington Post.
 
I keep hearing that there are people waiting to buy radio stations to make them live and local again, but they don't seem to be buying any that are available.
Is there a chance of a GM style bailout? I can't see the FCC letting hundreds of stations; especially big signals in big markets, going silent waiting for buyers that will never materialize.
 
gr8oldies said:
Is there a chance of a GM style bailout? I can't see the FCC letting hundreds of stations; especially big signals in big markets, going silent waiting for buyers that will never materialize.
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The feds can't buy radio stations. The reality is if iHeart goes belly up, the big signals in the big markets will get gobbled up quickly. They own most of the most profitable and highest rated radio stations in the country. The problem iHeart and Cumulus both have are all those small market, small signal stations that nobody wants. Except that guy outside Knoxville playing oldies.

I've always said that the smartest thing iHeart did was start their streaming platform. That added at least $1 billion of value to the company at a time when radio stations were losing value. The solution for iHeart is to let a Chinese company buy it. No profitable company in the US is interested in radio. The most successful media companies, like Disney, NBC, and CBS, have sold radio. If media companies don't see radio are part of their business, who's left? Certainly not technology companies.
 
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gr8oldies said:
I keep hearing that there are people waiting to buy radio stations to make them live and local again, but they don't seem to be buying any that are available.
Is there a chance of a GM style bailout? I can't see the FCC letting hundreds of stations; especially big signals in big markets, going silent waiting for buyers that will never materialize.
Click to expand...

There is nobody with money waiting to buy radio stations to make them "live and local".

A GM style buyout in the larger markets would require extensive financing. The biggest such deal to date was Summit, which is concentrated in markets ranked under #50.

It would seem that the best chance for creditors is to look for a Chapter 11 reorganization.

In either case, but more so with a Chapter 7 action, the victim is the industry. The know-nothing mass market media will call it the death of radio. They will ignore the fact that iHeart's issues stem from the effects of the recession and the introduction of the PPM even more than the increasing interest in new media. They will ignore the fact that most radio groups are profitable, and some are growing.

The unprofitable streaming services (meaning "All of them") will say that they are the future and the future is now. And they will line up at the doors of VC companies for a new round of financing so they can sustain the burn rate.
 
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What one needs to do is ask why the company included this message in their SEC filing. The fact is during the past year, the company has made an effort to re-organize its debts in a public and co-operative way, and they've been met with opposition from within. The opposition has taken the company to court several times already. This is expensive and annoying, and hasn't led to anything useful or productive.

So my theory is the company wants to make it clear that investors and creditors need to get serious about solving these issues, or the company will have no choice, and everyone will lose.
 
Always interesting how companies like those can lose millions, and still have VC companies saying "here, have another few million"



DavidEduardo said:


There is nobody with money waiting to buy radio stations to make them "live and local".

A GM style buyout in the larger markets would require extensive financing. The biggest such deal to date was Summit, which is concentrated in markets ranked under #50.

It would seem that the best chance for creditors is to look for a Chapter 11 reorganization.

In either case, but moreso with a Chapter 7 action, the victim is the industry. The know-nothing mass market media will call it the death of radio. They will ignore the fact that iHeart's issues stem from the effects of the recession and the introduction of the PPM even more than the increasing interest in new media. They will ignore the fact that most radio groups are profitable, and some are growing.

The unprofitable streaming services (meaning "All of them") will say that they are the future and the future is now. And they will line up at the doors of VC companies for a new round of financing so they can sustain the burn rate.
Click to expand...
 
gr8oldies said:
Always interesting how companies like those can lose millions, and still have VC companies saying "here, have another few million"
Click to expand...

But when they hit, they hit big. Just not with radio. Pandora is looking for more cash now. Spotify's IPO has been delayed.

Then there's Lew Dickey, who is apparently building a war chest for some new purchases. I saw where some investors are showing him a billion. With a B.
 
gr8oldies said:
Always interesting how companies like those can lose millions, and still have VC companies saying "here, have another few million"
Click to expand...

The difference here is that what we have ar enot Venture Capital folks but plain old Investment Bankers. VCs work like oil wildcatters, and they spend hoping to strike it rich with that one well out of ten that comes in big. They know that new ventures will burn capital for years.

Investment bankers are more like lenders, packaging debt for higher risk investors while often keeping a stake themselves. When they see a deal going sour, if there is a prospect of recovery of all or part of the investment, they will provide more cash in the hopes of saving the original funds.
 
If iHeart goes out and all stations owned by iHeart goes silent, it will totally cause a radio station "massacre" (not just a suicide in this situation).

Also, how is it that people think that this will be the last year of the iHR Music Awards and Music Festival, despite both of the events being a great success, just because of iHeart's debt problem?
 
Jonathan7157 said:
If iHeart goes out and all stations owned by iHeart goes silent, it will totally cause a radio station "massacre" (not just a suicide in this situation).
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No, they won't. If iHeart files Chapter 11, that means reorganization of the debt, and all stations will remain on the air. If they file Chapter 7, that means that the company's assets will be sold off to pay creditors, and will cease to exist. The stations will be sold as part of those assets, but probably few, if any, will have to shut down. The former is more likely.
 
Jonathan7157 said:
If iHeart goes out and all stations owned by iHeart goes silent, it will totally cause a radio station "massacre" (not just a suicide in this situation).
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The stations are not going off the air. iHeart and the lenders are playing "chicken" to see who gives in first. The lenders don't want to take a haircut, iHeart threatens Chapter 11 (where the unsecured lenders lose it all). Eventually they will find a point where each is less unhappy.

Even if they go Chapter 11, the stations will continue to operate and the average listener will not notice a difference. The changes are all "back room" moves.
 
Here in Vegas at NAB, lot's of talk about IHeart's next move. Whatever that is, a lot of really good stations at potentially fire-sale prices. I heard that most air and production talent are being RIF'ed in small and mid market IHeart stations.
 
TheBigA said:
Then there's Lew Dickey, who is apparently building a war chest for some new purchases. I saw where some investors are showing him a billion. With a B.
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There could certainly be money to be made. It's just a matter of buying at the right price. You can make money at anything if you correctly buy something for less than its intrinsic value. The time to buy is when few people do.
 
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