iHeartMedia, the largest radio broadcasting conglomerate in the United States, has filed for bankruptcy after failing to manage its estimated $20 billion of debt. The radio conglomerate was reportedly obligated to pay off nearly $2 billion in debt this year. For the past few years, the home Power 105.1’s The Breakfast Club has sought out ways to restructure ways to manage their debt. In 2017, iHeartMedia put off paying nearly $500 million in debt by exchanging the debt for the same amount at a higher interest rate due in 2021. iHeartMedia has also used the same mindset to restructure smaller debts due in 2021 by exchanging them for debts of the same amount due in the immediate future with lower interest rates.
Crippled by falling revenue and piles of debt, radio conglomerate iHeartMedia has filed for bankruptcy. https://t.co/xFwTFfOj5Z
— CNNMoney (@CNNMoney) March 15, 2018
As a result of the iHeartMedia bankruptcy, the company will redistribute 91.79% of its “reorganized common stock” and establish $5.41 billion in new secured debt to its debtees. Ultimately, iHeartMedia wrote in its press release that “an agreement in principle with holders of more than $10 billion of its outstanding debt and its financial sponsors,” which will cut its debt in half.
iHeartMedia’s bankruptcy comes less than six months after Cumulus, the country’s second-largest radio broadcasting conglomerate, filed for bankruptcy. Cumulus, much like iHeartMedia, filed bankruptcy to offload debt. As a result of filing for bankruptcy, Cumulus was able to remove $1 million of debt.