The national pandemic dealt a crushing blow to radio’s largest operator. Revenue from iHeart’s 800 plus radio station portfolio was hit the hardest in Q2, dropping 57% from $561 million to $244 million. Network revenue was down 38% and digital revenue was up 2% thanks to podcasting. Sponsorship and events revenue also declined by $26 million.
As a result of how the COVID-19 pandemic severely deteriorating iHeart’s revenue, deep cuts and cost savings had to be made, about $250 million in 2020. Many of those cuts will be permanent. The company is also looking at other ways to reduce expenses, including real estate, travel and new technologies.
Looking ahead, like many other companies, it was clear April was the bottom and every month forward looks better. But, also as others have reported, it’s impossible to predict how the economy will recover with COVID-19 cases rising in some states. CFO Rich Bressler said, “revenue will remain challenging but we are cautiously optimistic. Q3 was materially better than Q2.” For July, iHeart was starting to climb back, down only 27%.
While voicing his optimism for the future, and for radio’s strengths, CEO Bob Pittman acknowledged the challenges are unprecedented and the pandemic has had a sever negative impact on revenue. He also said iHeart has ample liquidity to make it through this challenge.