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.
I just lost 50 IQ points reading some of these juvenile comments on this string.
Grow up, girls and boys.
So your real name is Big A? Speaking of fake names…
I spent 36 years in the business pal. You dont even know me. How dare you call my career fake.
If you aren’t Pitchman you are certainly a pitchman apologist. Typical…when beaten by the facts resort to name calling and personal attacks.
It is inappropriate and off point, for commentators here to be calling out The Big A and stating that he is Bob Pittman. Any objective pundit here realizes that Bob Pittman is a visionary, and he has been recognized for that as Radio Executive of the Year. There are just a lot of jealous folks on here. And consider: where would the iHeart stations be, without Bob Pittman and Rich Bressler?
Thanks. The real Pittman is not wasting his valuable time reading any industry media unless those in his inner circle of management show it to him.
Going to be hard to repeat the title of “Executive of the Year” At this rate.
They count trade as revenue so in terms of cash sales it is assuredly worse than that.
As newspapers have shown us, you cannot cut your way to success. All it does is lead to a drawn our and painful failure. Large, heavily leveraged conglomerates such as iHeart, Cumulus, etc., are in a slow death spiral – temporarily hastened by the pandemic. They should honestly be broken up and assets sold off to smaller companies that have a better chance of being financially successful with them.
While that break-up should be an entirely voluntary, free-market arrangement, I would agree that spinning off stations to smaller companies is a great idea…IF those smaller companies are actual, LOCAL, community-based and -oriented entities.
If spinning off means just divesting to other nationwide companies that are ‘smaller’ than iHeart or Cumulus, and not to genuinely local broadcasters, then what difference would it make?
Smaller companies? Like who? You think small radio companies have money right now to buy radio stations? They can barely pay their electric bills. Small companies are in worse shape than iHeart. At least iHeart has other revenue streams such as podcasting to make up for losses in on-air. But small companies haven’t invested in digital, and they don’t have other sources of revenue. You’re likely to see a lot of small radio companies shut down this year. We’ve already seen a lot of single station AMs shut down, licenses turned in, and owners giving up. You need to look around and see how bad the situation really is.
There is no true increase in digital.
When AEs are pressed to sell digital most simply talk clients into moving money to digital, with no overall increase to their budget. They used to call it the shell game. This keeps market managers who’s primary goal is to cover their tails off their back.
Big A ( AKA Pittman) should know this unless he’s more out of touch with reality than we think.
None of the that is true. Most companies have their own digital sales team (because the metrics are different) so they don’t move money to digital. It’s new money, coming from accounts that don’t buy traditional spots. Some advertisers prefer digital ads because it allows them to target to specific demos. There is no growth in traditional radio ads. But as I said, small stations don’t have any digital money, so they’re in big trouble.
Actually it is all true. This I know from working with a top 30 market and managing the sales in 2 smaller markets for years. 20 years of experience with Clear Channel/ I Heart gives me the ability to speak intelligently on this subject.
Believe what you want if it makes you feel better. Some believe that the Earth is flat too.
A fake career that uses a fake name. Who also thinks I’m Bob Pittman. Lots of credibility.