IHeartMedia has officially filed for Chapter 11 bankruptcy protection. The largest operator of radio stations in the United States has been struggling under the weight of billions of dollars in debt for years now and could not pay down or re-negotiate their debt.
With the filing today, IHeart has reached an in-principle agreement with creditors to restructure its debt load. It will restructure the agreement with creditors for more than $10 billion of its debt, reducing its debt load from around $20 billion to almost $10 billion.
It says cash on hand and current revenue will be able to keep operations going at its 858 radio stations across the United States as it navigates this bankruptcy process.
"The agreement ... is a significant accomplishment, as it allows us to definitively address the more than $20 billion in debt that has burdened our capital structure," Chief Executive Bob Pittman said via CNBC.
Clear Channel Outdoor, a subsidiary of IHeartMedia and one of the world's largest billboard companies will not be filing for bankruptcy protection.
The writing has been on the wall for some time now, but it became dire in the past two weeks as IHeart started to circulate bankruptcy papers and miss more debt payments. As the largest operator of radio stations in the US, this matters, and hopefully it doesn’t do irreparable damage to the radio business.