iHeartRadio Doomed By Debt?
iHeartMedia might not survive another year because of negative cash flow thanks to $20 billion in debt, the company said in an SEC filing April 20.
“Management anticipates … that there will be substantial doubt as to our ability to continue as a going concern for a period of 12 months” from the release of the first quarter financials, the 8-K filing read.
iHeartMedia, with its iHeartRadio brand, is the largest U.S. radio operator with about 250 million monthly listeners and syndicated programs by Rush Limbaugh and Steve Harvey among others.
The company has massive debt mostly because of a $24 million leveraged buyout of Clear Channel Communications, according to MarketWatch.
The company’s share price dropped more than 30 percent in the days following the news, and was just above $2 at press time. In December Moody’s had downgraded the company’s outlook from stable to negative.