iHeartMedia says its mediation with some of its creditors continues and has “yielded proposals from both sides which address a broader solution than what is at issue in the trial” which began Monday in Texas.
At issue is whether the broadcaster was allowed to move more than 100,000,000 shares of Class B common stock of Clear Channel Outdoor Holdings, Inc., a “restricted subsidiary” to Broader Media, LLC, an “unrestricted subsidiary” under the company’s various debt documents.
“We have had productive conversations over time with many of our lenders as we continue to focus on executing on our strategic plan and realize the financial benefit for all of our stakeholders,” the broadcaster said in a statement to RBR+TVBR.
iHeart told the Securities and Exchange Commission that as part of the mediation, some of its creditors made a proposal to amend the terms of iHeart’s credit agreement. They are: Benefit Partners, Franklin Advisers, D.E. Shaw and Canyon Capital. See that proposal here: http://www.sec.gov/Archives/edgar/data/739708/000119312516590998/d136037dex991.htm
iHeart made a counterproposal, see that here: http://www.sec.gov/Archives/edgar/data/739708/000119312516590998/d136037dex992.htm
The outcome of the trial may have a “substantial bearing” on the outcome of the negotiations, which may be discontinued at any time by any party, according to the broadcaster.
I don’t have a handle on huge-corporation-financing as the biggest purchase I’ve ever made was a house, but, I think iHeart is well and truly screwed, and they mostly did it to themselves. But their timing was bad, too. (The recession hit them right in the wallet just after they paid incredibly high rates for hundreds of stations and then couldn’t sell ads.) I can’t see a way out of their conundrum; they’ve cut their personnel to the bone, use networks and voice tracking like mad, sold almost all of their tangible assets, and run more spots per hour than ever before, and still have not paid down their debt in years because all they can swing is interest payments. Cumulus is right behind them, too.
Yes indeed, consolidation is GOOD for radio.
They did it to themselves.
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