iHeartMedia files for bankruptcy

Updated on December 10, 2021

Last week news came that radio giant iHeartMedia (formerly known as Clear Channel until it changed its name in 2014) is filing for bankruptcy. For now, its operations (including its concerts, outdoor advertising agency, and approximately 850 radio stations) will continue operating as-is.

This feels familiar

Oddly, this ties into my previous post about Toys R Us, who also filed for bankruptcy. It turns out the circumstances behind iHeartMedia’s problems are very similar. That’s probably because the same people are involved.

Bain Capital bought Clear Channel in 2006 in a leveraged buyout. Bain is the same private equity firm that similarly bought Toys R Us (hence the “this feels familiar” heading). Like the toy store chain’s fate, the buyout also placed a lot of debt on Clear Channel/iHeartMedia. This hampered the radio conglomerate’s future plans by being forced to deal with a massive debt increase. While Clear Channel/iHeartMedia expanded a lot in the 90s/00s (thanks to deregulation of media ownership laws in the 90s), it at least had a more manageable amount of debt.

Why iHeartMedia’s problematic

Unlike Toys R Us’ fate, there won’t be any sadness by anyone (who isn’t an investor) over iHeartMedia’s current situation. The company represents much of what’s wrong with modern radio/media consolidation:

Buying tons of stations (owning multiple ones in each market).
Cookie-cutter radio formats.
The automation of many of its stations (see the infamous 2002 Minot, ND train derailment aftermath), leading to a loss of local identity.

And so forth.

Given the current FCC’s deregulatory bent, don’t expect things to improve for radio anytime soon. If anything, the Trump administration’s budget plans suggest they’d rather go after NPR’s already-paltry government funding.

Of course, the rise of online streaming (Spotify, YouTube, Apple Music, etc.), podcasts, etc. also isn’t helping iHeartMedia. I haven’t bothered with traditional commercial radio in years, outside of streaming audio of Chicago Blackhawks games from Chicago’s WGN. If I’m listening to the radio at all anymore, it’s usually NPR. Otherwise, I rely on Spotify, Google Play Music, and YouTube for listening to or learning about new music.