IHeartMedia Files For Chapter 11 Bankruptcy

According to an announcement on the iHeart website, the prepackaged "agreement reflects widespread support across the capital structure for a comprehensive balance sheet restructuring that will reduce iHeartMedia's debt by more than $10 billion. iHeartMedia, America's No. 1 audio company, will continue operating the business in the ordinary course as a leading global multi-platform media, entertainment and data company".

We added that "mere size, unprecedented though it might be, doesn't fully explain the fear Clear Channel engenders among inhabitants of the radio-and-promotion universe".

Eight hundred and fifty radio stations felt the heat today when its operator iHeartMedia submitted paperwork for bankruptcy.

On Monday it disclosed that it continued exchanging proposals with creditors, but no agreement had been reached.

The roots of iHeartMedia can be traced back to the purchase in 1972 of KEEZ-FM from San Antonio, Texas, where the company now keeps its headquarters.

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It said in a statement it was seeking to maintain business as usual during the bankruptcy, and to "uphold its commitments" to its staff.

Cash on hand and cash generated from ongoing operations will be sufficient to fund the business during the bankruptcy process, said iHeartMedia, which owns Z100 in NY and Real 103.5 KISS FM in Chicago. It also produces syndicated radio programs that feature "American Idol" host Ryan Seacrest and political personalities Rush Limbaugh and Sean Hannity.

The company's lawyers told the court iHeartMedia was on the cusp of having enough support from creditors to impose its plan on hold-outs. It also owns iHeartRadio's music streaming service, a large concert business, and a 90% stake in Clear Channel Outdoor, the billboard company. And both companies are trying to restructure their debt.

The two cases are unique, but both companies face similar challenges in a troubled industry. For a while it looked like Liberty Media would be iHeartMedia's saviours, offering $1.16 billion for a 40% stake.

The company came to terms with its senior lenders just hours before filing for bankruptcy, company treasurer Brian Coleman said in court papers filed Thursday. The deal would unite iHeartMedia with Liberty's Sirius XM Holdings Inc satellite radio service.

  • Stacy Houston