iHeartMedia Reports Growth In Q1 As Bankruptcy Threat Looms
Consolidation in radio led to huge debt loads for many broadcast groups. And while the shift began during the Clinton administration, we're feeling the effects today with companies like iHeartMedia teetering on the edge on bankruptcy.
iHeartMedia this week announced their financial results for the first financial quarter, showing an uptick in both operating income and revenue.
“We’re pleased with the success of our growth initiatives in the quarter,” said Bob Pittman, Chairman and Chief Executive Officer. “We expect this momentum to continue to build, as we keep investing in our employees and transforming iHeartMedia, Inc. into a multi-platform, 21st century media and entertainment company with groundbreaking programmatic, data-learning and research capabilities. Our iHeartMedia results reflect our growing audiences across broadcast radio, digital, social, mobile and events, as well as our enhanced ability to monetize them, such as our ongoing success in attracting political campaign spending."
Revenue for the company increased by $41 million, or 5.9%, during the first quarter 2016 as compared to the first quarter 2015, with the company attributing the revenue gains to gains in their core radio business, both broadcast and digital, as well as heavy political advertising spending. The company also pointed to growth in live events, as well as traffic and weather business.
OIBDAN (operating income before depreciation and amortization) increased 10.6% to $247 million for the first quarter of 2016 as compared to the first quarter of 2015.
The financial results come against the backdrop of the company seeking to resolve disputes with lenders that have declared a default on billions of dollars of the company’s debt ahead of a trial on that default, scheduled for next month.
Earlier this week, the company announced that it had begun mediation with certain creditors in an effort to "try to resolve the dispute and to explore possible alternatives to the terms of the Company’s existing senior secured indebtedness."
In April, a group of creditors including private equity firms claimed that iHeartMedia was in default, with the default event triggered by a transfer of shares that the lenders say are worth $1.241 billion. iHeartMedia has since asked a Texas court to nullify the default event. – Staff Writers