iHeartRadio is in trouble, and it’s not certain whether it will last another year.
The radio giant is straddled with enormous debt dues, with almost $350 million due this year and another $8.3 billion in debt due by 2019. This debt is part of a debt load it took on in the buyout of Clear Channel Communications, the billboard advertising giant which is also owned by iHeartMedia.
In its latest filing with the SEC, iHeartMedia stated that they plan to include a disclosure for investors in its next quarterly report which will indicate “substantial doubt” as to whether the company will be able to continue for another 12 months. The company’s revenue fell further this year, its expenses rose, and its cash flow continues to be negative. iHeartMedia stocks fell three percent after the announcement.
It’s uncertain what this means for iHeartRadio and its 850+ stations. It will probably go into Chapter 11 bankruptcy where the lending party will take on the company, bankruptcy expert Chuck Tatelbaum of the Tripp Scott firm told Market Watch. In such a scenario, the company will be temporarily protected from creditors and given time to reorganize.