iHeartMedia, the largest existing US radio company, has officially declared bankruptcy.
In filing for Chapter 11, iHeartMedia has also put in place a restructuring plan to get a grip on its overwhelming debt. Thanks to a new in-principle agreement with creditors, the company has hopes of reducing its debt by more than $10 billion.
iHeartMedia reportedly racked up $20 billion worth of debt and has suffered from falling revenue over the company’s 858 radio stations. More than ever, iHeartMedia, along with its iHeartRadio stations and the iHeartRadio app, can feel the pressure to hang with leading music platforms like Spotify and Apple Music.
Chief Executive Bob Pittman addressed the Chapter 11 filing on behalf of iHeartMedia: “The agreement … is a significant accomplishment, as it allows us to definitively address the more than $20 billion in debt that has burdened our capital structure.”
John Malone’s Liberty Media proposed a deal to buy a 40 percent stake in the restructured iHeartMedia plan for $1.16 billion. This move unites the company with Liberty’s Sirius XM Holdings satellite radio service.
For the company and its 14,300 employees, business will go on as usual for now.