In an almost supervillain-like showcase of the chronic greed and shortsightedness of the radio industry in the United States, iHeartMedia – the bankrupt remnants of the once-mighty Clear Channel empire – recently began laying off editorial staffers at their stations around the country.
The news of layoffs came just a week after iHeartMedia executives plan to take the company out of bankruptcy protection – reputedly the 30th largest bankruptcy in history – with a $100 million stock offering.
According to allaccess.com:
Laid-off staff reported being “blindsided” by the news.
Six days prior to this round of layoffs, iHeartMedia executives shared their appalling plan to float their bankrupt company on a listed stock exchange. (The company’s stock currently trades in the OTC market, commonly known as penny stocks or “pink sheets.”)
The largest broadcaster in the United States (and not coincidentally the people who are most responsible for making American radio an unlistenable mess), iHeartMedia had been crushed in a leveraged buyout that saddled it with $20 billion in debt.
iHeartMedia’s investor prospectus filed with the SEC is an enlightening document, filled with breezy PR spin on why the product iHeartMedia is selling – terrestrial radio – is both relevant and highly desirable. After framing themselves as the “number one audio media company” in the US, iHeartMedia explains that they offer people more than Spotify or Pandora can. They offer love. iHeartMedia provides “the radio — ‘companionship’ — segment, in which people look to audio, starting with broadcast radio and the personalities there, as their friend and companion.
“Consumers listen to the radio because the voice on the other side sounds like a friend,” iHeartMedia waxes. “It is this companionship relationship that has withstood the test of time.”
And like any good friend, iHeartMedia wants to fulfill your needs and leverage you so hard:
The company says the stock offering is meant to further pay down debt not discharged under bankruptcy, though such a move is also commonly employed to make executives shockingly wealthy. iHeartMedia also disclosed the company had agreed with some creditors on swapping debt for equity, which would clear up the company’s books and further help position the country’s largest terrestrial broadcaster to be sold to a still larger company (or, more likely, yet another private equity firm).
The company was previously reported to be shopping a large stake to outside investors, but other companies – including Apple and Liberty Media – kicked the tires on purchasing a stake in iHeartMedia and took a hard pass.