Pittman, Bressler Pump up The Troops

iHeartMedia, which on March 15 announced it had reached an agreement with lenders to restructure its balance sheet, has about 17,000 employees working at 850 radio stations. With so many news outlets available today, and so may ways to receive that news instantly, it becomes a challenge to keep all those people motivated if they are being fed misinformation. That’s where CEO Bob Pittman and CFO Richard Bressler come in.

In an internal memo to employees Thursday, Pittman and Bressler took aim at an opinion piece that appeared in Forbes this week, from a writer with a history of bashing the company, who, without any proof, said many iHeart stations were going to be sold off. Pittman and Bressler referred to the writer as “sadly misguided and uninformed.” Nobody really knows what will happen once iHeart (and Cumulus) are restructured, however, everyone agrees these restructures were exactly what was needed.

Pittman and Bressler also highlight radio’s strengths in their memo, while pointing out the struggle Facebook is having with its data-sharing issues. Their conclusion: radio is a safe environment for advertisers, digital…not so much. And, they point out that radio’s on-air personalities are “true social media influencers.”

Every once in awhile the troops out on the street like to hear from the bosses running the company. They want to hear that their jobs are safe and the company is going to be ok. Pittman and Bressler tried to do that for them yesterday and keep them pumped up. Here’s the memo they sent out in its entirety.

Team,

It’s been a week since we reached an agreement with our lenders to give iHeartMedia a capital structure that finally matches its strong operating business. We’re pleased that a number of news outlets got the story right.

For example, The Wall Street Journal quoted analyst Lance Vitanza, who said, “This company going bankrupt is not a problem – it’s the solution.”

Forbes wrote “….that agreement will reduce its crippling debt by more than $10 billion, effectively cutting it in half. That could be a game-changer for the company.”

And in the New York Times, “….when they come out of bankruptcy, they will be in a much better position. We expect them to be able to focus their resources on growing their business rather than on debt service, which is what they’ve had to do for the last 10 years.”

Of course there is always someone who wants to tear us down. In fact, one sadly misguided and uninformed freelancer wrote an opinion piece claiming that we were going to sell off all our radio stations.   Clearly this is someone who didn’t bother to read anything published on the company or any reliable analyst reports.   The debtholders have spoken; they traded their $10 billion of debt for equity in our company. They don’t want to break up the company. So if you see anything else like this, you now have the right filter for how to think about it.

While iHeartMedia has had 18 consecutive quarters of year over year revenue growth, we still have more people to convert. So as we talk with our partners and advertisers about the positive news surrounding our capital structure, we should also use it as an opportunity to remind them that we provide unique solutions to problems they’re facing today.

Broadcast radio is one of the most brand-safe environments for advertisers. We are even regulated by the Federal Communications Commission (FCC) and deliver live, human and authentic programming to 9 out of 10 American consumers every week.

Nothing bears this out like the scandal we’ve seen in the last few days about Facebook, which had a relationship with a company that harvested and exploited private member data without permission, manipulating the social media activity of tens of millions of people.

While advertisers have been directing significant dollars to social media, in light of this massive data breach, many advertisers are seriously rethinking it because they are not getting the ‘influencers’ they think they’re paying for; in fact, because of social media fraud, they’re often not getting real people, they’re getting ‘bots.’

In contrast, our on-air personalities are the true social media influencers – they’re real, they’re genuine and they’re often among our listeners’ best and most trusted friends.   When our personalities recommend a product, listeners – and advertising partners – know they are getting the real deal.

The agreement to reduce our debt by $10 billion has added to our momentum. Lots of people are interested in talking to us. This is an exciting time for our company, and we should use this as an opportunity to tell people about all the other good news at iHeart.     We’ve attached a few slides to help you tell the basic story.

Keep us posted on what you hear, and we’ll continue to keep you updated on any new developments.

Thanks for all you continue to do to make iHeartMedia the leading media company by reach in America – and the number one audio platform by far.

Bob and Rich