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iHeartRadio owner files for bankruptcy
- fancyfacebook 9y agoIs this the end game of consolidation of an industry? Where are the supposed advantages and efficiencies of all that merging and streamlining?
- dvdhnt 9y agoI mean, I think it's the end game of any capitalist, extract the maximum value from whatever resources are available. That generally requires acquiring and ultimately consolidating resources either drive the value of what is produced or dictate production costs. They are able to manufacture popularity through choosing what music is most widely available on their stations and streaming services. Then, they use that ability, along with the data they acquire, to decide what artists to book for what festivals and where. It's similar to Netflix using its streaming data to decide what original content to produce, down to the second, no less.
- brickmort 9y agoiHeartRadio is the company that nobody asked for, who attempts to shove their music down your throat with moderate success. The sooner it's gone, the better off the music industry will be.
- samfisher83 9y agoIt was originally called Clear Channel communication, and they are the biggest radio company in America. The business is actually ok. The issue is that a few years ago Bain capital did LBO. Basically they have a massive amount of debt on their balance sheet which they can't service. If you look through their earning they are generating about 800 mil or so in profit. The issues they have like 1.2billion dollar interest payment. This has kind of the been the MO for Bain Capital.
- Aloha 9y agoYou don't have to listen to the radio if you don't like what's on.
- sp332 9y agoI don't get to listen to what I want on the radio if they keep closing stations I liked.
- khazhoux 9y agoWhy the hate? I sometimes catch Martha Quinn's 80s show in my morning or evening drive and enjoy it. No throat-shoving there!
- jhayward 9y agoThe hate is because the Clear Channel business model destroyed local music stations, with ties to the local community and culture, by buying up stations, firing everyone, and running them as automatons by remote programming. Complete with phony "we love XYZ" promos by well-known local personalities whose entire involvement was 15 minutes in a sound booth and a check. It's a business model designed to mine the value of local radio, extract the money, kill the host organism, and move on. The zombie shells left behind are vanilla, deceptive, and empty.
- mi100hael 9y agoThe irony of Bain doing the same thing to them.
- spaceflunky 9y agoThis is a perfect summation of what has happened. Turns out after you remote play Rhianna, Bieber, and Katy Perry on loop for 15 years, (with a 60/40, commercial to music ratio) people stop paying attention.
- khazhoux 9y agoEh, pop radio has been like this as long as I remember (back to the 80s). Then as today, pop radio is just rotation of a few tracks every single day, and if you want anything non-robotic, you go to college radio, jazz, classical, or NPR. Even before Clear Channel, pop radio stations would have you believe that Bruce Springsteen and Prince only ever recorded 3 tracks each, Radiohead recorded a single track in 1991 and then stopped, U2 got stuck at Joshua Tree, Soundgarden made a single track... I could go on. That fine tradition continues today, where at any given moment I can turn on the radio and find Portugal The Man's "Feel it Still", or one of ten other predictable tracks. Looks to me like Clear Channel just replaced one brainless programming model with another.
- msla 9y agoThis is an undead trope: Mass-media radio was shoved down people's throats to some extent back before there was any serious alternative to radio in general, but there are so many ways to hear music now it isn't justified anymore. It reeks of hating something simply because it's popular, as if you're wounded by the notion that popular music is popular because a lot of people like it, as opposed to some vast conspiracy.
- swyx 9y agoexcuse me, what? they owe 20 billion dollars? That is way more than Spotify! Am I missing something here, what have they done with that money?
- guyzero 9y agoNothing. They never had it. It was a leveraged buyout run by Bain.
- kevin_b_er 9y agoBain capital, the same ones who killed Toys R US, bought them out with a loan. Extracted the loan money and turned it into debt saddled onto the victim company. Bain made a bunch of money and iHeart now magically has a bunch of debt. Free money for Bain and iHeart dies. Same story as Toys R US.
- guyzero 9y agoSo in case you're wondering how a bunch of radio stations got $20B in debt (yes, that's twenty billion US dollars) - the answer as always is a leveraged buyout. From https://www.forbes.com/2008/05/14/clear-channel-buyout-markets-equity-cx_md_0514markets14.html https://www.forbes.com/2008/05/14/clear-channel-buyout-marke...: "Thomas H. Lee Partners and Bain Capital, agreed to a lower sale price of $17.9 billion or $36.00 per share of the radio company" Wait, maybe the name "Bain Capital" rings a bell? That's because their leveraged buyout of Toys R Us saddled the company with so much debt they went completely out of business. https://nypost.com/2017/09/21/bain-capital-has-now-plunged-two-toy-retailers-into-bankruptcy/ https://nypost.com/2017/09/21/bain-capital-has-now-plunged-t... Also see https://dealbook.nytimes.com/2012/02/29/sorting-through-the-aftermath-of-private-equity-deals/ https://dealbook.nytimes.com/2012/02/29/sorting-through-the-... There's really no reason for iHeartMedia to have all this debt other than Bain Capital did their thing.
- smaili 9y agoI’m a bit confused...are you implying Bain Capital wanted these companies to go out of business? And if so, why? What’s the point of investing into something that you want to force go under?
- guyzero 9y agoNo, Bain Capital wanted their fees and after the buyout servicing the deb wasn't their problem. I'm not the best person to explain LBOs really.
- toomuchtodo 9y ago[removed] Please see exelius's sibling comment, as it's a better and more in depth explanation.
- ambicapter 9y agoWhy do all these CEO's (who I'm told are the smartest) and creditors keep on falling for this? I'm guessing they are getting paid off as well?
- legitster 9y agoI think these are good examples of the limits on economies of scale. Certain things work well when you consolidate them (One corporate headquarters, lower margin). But a large corporate office somewhere in corporate land does an awful job determining local taste and selling ad space.
- wolfspider 9y agoiHeartMedia does more than radio they also previously owned a bunch of television stations and do billboard advertising. You may recognize their former name "ClearChannel" a little bit better. I would say this not only signals how difficult it is to make money from radio broadcast but how difficult it is to make money from any type of broadcast. They make use of a bunch of towers and satellites which I think is probably where the returns are failing in comparison to the internet. That whole industry needs to change anyways they are all living in a different age. This is what happens when the leadership of such a big corporation becomes so exclusive they fail to adapt and promote people with fresh ideas. They live an extremely narrow vision of reality- so now this vision is paying them all back the dividends that they earned.
- guyzero 9y agoiHeartRadio makes billions of dollars in revenue every year, they just can't keep up with their debt payments from the leveraged buyout. Radio ads make plenty of money and stations aren't really that expensive to run. edit: to be more specific, in 2016 they had $1.5B of operating income which is great. Too bad they had $1.8B of debt payments.
- 220V_USKettle 9y agoAlso, outdoor advertising is quite profitable as well.
- guyzero 9y agoI think the outdoor advertising arm has been sold off from iHeartRadio. https://www.iheartmedia.com/press/clear-channel-outdoor-holdings-inc-sells-interest-adshel-joint-venture-partner-apn-news-media https://www.iheartmedia.com/press/clear-channel-outdoor-hold...
- dv_dt 9y agoFiling for bankruptcy strongly implies that that can't keep it up...
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- bluedino 9y agoI like iHeartRadio. Non-intrusive app on my phone and computer, it's free with very few ads. It's simple and I can just fire it up when I want some music. No libraries, no discovering music or sharing playlists with friends, it's simple and works.
- 8bitsrule 9y agoMuzak, 2009. iHeart, 2018. One more heart, one more stake.
- spaceflunky 9y agoBut where will people go to listen to 21 Pilots!?!? Won't someone think of the children for once.
- msie 9y agoIf only it was possible to do a LBO of Bain Capital...
- nugi 9y agoI do love radio, which is why I celebrate the continued demise of clear channel and their affilliates. You ruined what was left of radio. I 'heart' radio indeed.