iHeartMedia May be Forced to Declare Bankruptcy

: Chris Lee Law Firm

  Filed under: News

iHeartMedia Inc. is a mass media company headquartered in San Antonio, Texas and was founded in 2008. The company’s main offering includes radio broadcasting services and owns more than 850 full power radio stations throughout the US, making it the nation’s largest radio station owner. The company also offers outdoor advertising through its subsidiary Clear Channel Outdoor Holdings, Inc.

iHeartMedia has been on bankruptcy watch for some time now, as it has struggled to pay down more than $20 billion in debt the company acquired from its leverage buyout. Many analysis and media outlets including San Antonio Express-News have stated that a bankruptcy or a major restructuring are inevitable for iHeartMedia. iHeartMedia themselves even claimed in April of 2017 that it may not survive the next 10 months.

More bad news arrived this week as iHeartMedia announced a loss of $174 million in the second quarter due to reduced advertising revenue. This makes the 28th straight loss over the last 29 quarters and represents a revenue decrease of 1.5 percent. It’s still uncertain if iHeartMedia will declare bankruptcy or not, and this will depend primarily on its cash flow, which will represent its ability to stay in business without restructuring.

This is most likely not all we’ll hear coming from the financially battered company as they seek to reach a pre-bankruptcy agreement with lenders and bondholders. A Chapter 11 bankruptcy would mean a possible debt reduction for iHeartMedia while they remained operational as they essentially force creditors to accept a reorganization of their debt.

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