(By Ed Ryan) It was less than one year ago Radio Ink reported that, out of the approximate 11,300 radio stations, 11% of them (1,300) were under a bankruptcy umbrella. Cumulus was working through the process (445 stations) and iHeart had just filed (850 stations). Many industry executives had been saying for years that once radio’s two biggest companies clean up their balance sheets radio would be in a much better place. That process was well underway.
Cumulus emerged from bankruptcy, under the leadership of CEO Mary Berner, in the Summer of 2018, with $2 billion in debt gone. Yesterday, iHeart received approval from the bankruptcy court which will lead to $10 billion coming off their books. When you throw in the strong possibility that the FCC, under the leadership of Ajit Pai, will likely approve additional deregulation, and radio’s recent focus on data, all signs appear to be positive for the radio.
Many radio executives, as well as industry watchers, have said that the enormous amount of debt iHeart and Cumulus have been carrying around, combined with their inability to pay it down, had cast a dark shadow over radio. Investors and advertisers have been hesitant to side with a 100-year-old medium, burdened with all that debt, competing with digital companies that offer instant metrics. Will this be the turning point for radio? Will the positive news of Cumulus and iHeart cleaning up their balance sheets finally give radio the ad revenue boost it so badly needs?
Everybody knows a well executed commercial that’s not buried in a 15-20 minute long stopset will net results for local, regional, and national advertisers. Everybody agrees that when live DJs (local or national) read an ad, with that genuine passion, cash registers sing. And nobody argues that when disaster strikes, Facebook and Pandora and Spotify are no match for WCBS, WTOP, and every other radio station delivering what the community needs when the community needs it.
Maybe 2019 will be radio’s year.