iHeartMedia expects bankruptcy this year
iHeartMedia, the holding company of IHeartRadio, which is the biggest operator of radio stations in U.S., plans to tell investors on next month's quarterly earnings report that it may not survive financially another year, MarketWatch reports. Shares have dropped over 30% since iHeart made the announcement to investors April 20.
In its latest regulatory filing, the company says it's next quarterly update will include a disclosure indicating there is "substantial doubt" in the company's ability to operate by Q1 2018. The company says their uncertainty revolves around its ability to refinance its debt. Most of the company's cash on hand comes from its billboard company, Clear Channel Outdoor Holdings Inc., but even with the billboard business rising, the company has been unable to offload Clear Channel to lenders in exchange for relief.
Why it matters: iHeartRadio, which owns over 850 radio stations throughout the country, has very quickly seen its business dwindle due to the rise of audio streaming, mainly via Pandora and Spotify. The company launched a subscription service less than a year ago with Napster, that has been unable to compete in the market.