SAN ANTONIO - A company that owns hundreds of radio stations across the country, including two in Berks County, is seeking bankruptcy protection as part of an agreement with its lenders to reduce debt it took on to become a privately held company.
iHeartMedia, formerly known as Clear Channel Communications, said it will operate its businesses as usual while it restructures its finances under Chapter 11 protection to reduce debt by more than $10 billion.
IHeartMedia, which is based in San Antonio, operates 858 broadcast radio stations in more than 150 markets around the U.S., including WRFY-FM (Y-102) and WRAW-AM (Rumba 1340). Both stations have their studios on Perkiomen Avenue in Reading.
The company also runs big live events such as the iHeartRadio Music awards.
"We have transformed a traditional broadcast radio company into a true 21st century multi-platform, data-driven, digitally-focused media and entertainment powerhouse with unparalleled reach, products and services now available on more than 200 platforms, and the iHeartRadio master brand that ties together our almost 850 radio stations, our digital platform, our live events, and our 129 million social followers," said Bob Pittman, iHeartMedia's chairman and CEO.
Though iHeartMedia has a large online presence and its iHeartRadio app is popular for streaming music, it faces stiff competition from Spotify, Apple Music and other online streaming services. Spotify, which recently filed for an initial public offering, said Thursday that its shares would begin trading on the New York Stock Exchange around April 3.
The reason for iHeartMedia's financial problems is primarily its massive debt, which it amassed when private equity firms Thomas H. Lee Partners and Bain Capital led a buyback of publicly held shares to take the company private in 2008. IHeartMedia had warned in 2016 that it had reached an impasse with lenders.
"The agreement we announced today is a significant accomplishment, as it allows us to definitively address the more than $20 billion in debt that has burdened our capital structure," Pittman said. "Achieving a capital structure that finally matches our impressive operating business will further enhance iHeartMedia's position as America's #1 audio company."
IHeartMedia Inc. said its billboard subsidiary, Clear Channel Outdoor, isn't part of the bankruptcy proceedings.
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