The going consensus among those in attendance at Forecast is that the debt iHeartMedia and Cumulus are dealing with is hurting the industry. Wells Fargo analyst Marci Ryvicker said investors are nervous because the radio industry hasn’t done well — and that’s because iHeartMedia and Cumulus may be looking at bankruptcy. She said the sooner they go through what they need to go through, the better: “It has to be resolved in 2018.”
iHeartMedia is dealing with $20 billion in debt while Cumulus is trying to refinance $2 billion. In recent weeks, we’ve heard Cumulus mention the possibility of a Chapter 11. That is not something we’ve heard at all from iHeartMedia executives as yet.
There is also some disagreement among the financial minds as to whether there will be any assets available if iHeartMedia goes through a restructure. Some financial experts believe some markets would be sold off, but others believe it wouldn’t make sense for that to happen if iHeart comes through a restructure with a clean balance sheet. One investor said something that everyone agreed with: that they probably don’t know what’s going to happen.
David may have, at least, a philosophical point.
It’s all that upcoming collateral damage – the wiping out of the innocents that troubles me.
For that there is little forgiveness – not in a secular world.
The only collateral damage will be for the investors. Don’t cry for them, since they’ve been collection principle plus interest (at a high rate) for a long time. That’s one of the reasons they front-load the payments the way they do, in anticipation of such a thing.
KARMA…