iHeartMedia, Inc., or CC Media Holdings, Inc., is an American mass media corporation headquartered in San Antonio, Texas.[2] It is the holding company of iHeartCommunications, Inc., formerly Clear Channel Communications, Inc., a company founded by Lowry Mays and Red McCombs in 1972, and later taken private by Bain Capital and Thomas H. Lee Partners in a leveraged buyout in 2008.
As a result of the 2008 buyout, Clear Channel Communications, Inc. became a wholly owned subsidiary of CC Media Holdings, Inc.[3][4] On September 16, 2014, CC Media Holdings, Inc. was rebranded iHeartMedia, Inc., and Clear Channel Communications, Inc., became iHeartCommunications, Inc.[5][6]
Overview
iHeartMedia, Inc. specializes in radio broadcasting, podcasting, digital and live events through division iHeartMedia (sans “Inc.” suffix; formerly Clear Channel Media and Entertainment, Clear Channel Radio, et al.) and subsidiary iHeartMedia and Entertainment, Inc. (formerly Clear Channel Broadcasting, Inc.); the company owns more than 860 full-power AM and FM radio stations in the U.S., making it the country’s largest owner of radio stations. The company has also been involved in internet radio and podcasting via the digital platform iHeartRadio[7][8] (from which the company derives its current name).
In the past, the company was also involved in live events and out-of-home advertising. The company spun off these businesses in 2005 and 2019 respectively, as the present-day Live Nation Entertainment[9][10] and Clear Channel Outdoor.[11]
History
20th century
Clear Channel Communications purchased its first FM station in San Antonio, Texas in 1972.[12] The company purchased the second “clear channel” AM station WOAI in 1975. In 1976, the company purchased its first stations outside of San Antonio. KXXO (now KAKC) and KMOD-FM in Tulsa were acquired under the name “San Antonio Broadcasting” (same as KEEZ). Stations were also added in Port Arthur, Texas (KPAC-AM-FM, now KDEI and KTJM, from Port Arthur College), and El Paso, Texas (KELP, now KQBU) from John Walton Jr.
In 1992, the U.S. Congress relaxed radio ownership rules slightly, allowing the company to acquire more than two stations per market. By 1995, Clear Channel owned 43 radio stations and 16 television stations. When the Telecommunications Act of 1996 became law, the act deregulated media ownership, allowing a company to own more stations than previously allowed. Clear Channel went on a subsequent buying spree, purchasing more than 70 other media companies and individual stations.[citation needed]
In a few cases, following purchase of a competitor, Clear Channel was forced to divest some of its stations, as it was above the legal thresholds in some cities. In 2005, the courts ruled that Clear Channel must also divest itself of some “border blaster” radio stations in international border cities, such as the alternative rock radio station XETRA-FM (“91X”) in Tijuana/San Diego.
In 1997, Clear Channel expanded and diversified its business, purchasing Eller Media, a billboard media company[13] led by Karl Eller.
In 1998, it made its first move outside of the US when it acquired the leading UK outdoor advertising company More Group plc, which was led by Roger Parry; Clear Channel went on to buy many other outdoor advertising, radio broadcasting, and live events companies around the world, which were then re-branded Clear Channel International. These included a 51% stake in Clear Media Ltd. in China.[14] R. Steven Hicks and Hicks, Muse, Tate & Furst began Capstar Broadcasting in 1996, and a year later had become the largest owner of radio stations in the country, with 243 stations in total. In August 1997, Capstar and Hicks, Muse, Tate & Furst announced plans to acquire SFX Broadcasting, with the resulting company owning 314 stations in 79 markets and ranking as the third-largest radio group by income.[15] A year later, Chancellor Media Corporation and Capstar Broadcasting Corporation announced a merger that would result in Chancellor Media owning 463 stations in 105 markets when the deal was completed in second quarter 1999. Hicks, Muse, Tate & Furst owned 59 percent of Capstar, with 355 stations in 83 markets, and was the largest single owner of Chancellor (which had 108 stations in 22 markets), with 15 percent of the stock.[16] Chancellor Media later became AMFM Inc., which was acquired by Clear Channel in a deal announced October 3, 1999, and valued at $17.4 billion. The resulting company would own 830 radio stations, 19 television stations, and over 425,000 outdoor displays in 32 countries.[17][18][19]
In 1999, the company acquired Jacor Communications, a radio corporation based in Cincinnati.[20] The company also made an investment in the new satellite radio service XM Satellite Radio, giving it the rights to program a selection of stations on the service (which would be drawn from some of its stations and syndicated output).[21]
21st century
In 2000, Clear Channel acquired Robert F. X. Sillerman‘s SFX Entertainment, a concert promoter that had focused on consolidation of regional promoters under a national operation.[22] In 2005, Clear Channel spun off its entertainment and live events business as Live Nation.[23]
On November 16, 2006, Clear Channel announced plans to go private, being bought out by two private-equity firms, Thomas H. Lee Partners and Bain Capital Partners for $26.7 billion, which included their assumption of $8 billion in Clear Channel debt.[24] This was just under a 10 percent premium above its closing price of $35.36 a share on November 16: the deal valued Clear Channel at $37.60 per share.[25][24]
In a separate transaction also announced on November 16, 2006, Clear Channel said it would seek buyers for all of its television stations and 539 of its smaller radio stations, because the private-equity buyers were not interested in owning television or small-market radio. Over a hundred stations were assigned to Aloha Station Trust, LLC upon the consummation of the merger. The television stations were sold to Newport Television, a broadcaster owned by Providence Equity Partners, on April 23, 2007.[26][27][28]
Due to the credit market crunch of 2007, Clear Channel encountered difficulty selling some of its radio stations. Clear Channel’s attempt to sell off over 100 stations to GoodRadio.TV, LLC was rejected by the equity firm backing the deal.[29] The deal then shifted to Frequency License LLC, but took longer to resolve itself as the two parties were engaged in lawsuits. On top of that, the sale of Clear Channel’s television portfolio to Newport Television had also turned uncertain, as Providence considered other options, although this transaction was ultimately completed.[30]
On December 4, 2007, Clear Channel announced that they had extended the termination date of the buyout from December 12, 2007, to June 12, 2008.[31] On July 24, 2008, Clear Channel held a special shareholder meeting, during which the majority of shareholders accepted a revised $36-per-share offer from Bain Capital and Thomas H. Lee Partners, revaluing the deal at $17.9 billion plus debt.[32][33] Shareholders received either $36 in cash, or one share of CC Media Class A common stock for each share of Clear Channel common stock held.[34] The company announced that it would move to more centralized programming and lay off 1,500 employees, or approximately 7% of its workforce, on January 20, 2009. The reasoning was bleak economic conditions and debt from its transition to a private company.[35] By the completion of the restructuring in May 2009, a total of 2,440 positions were eliminated.[36]
In early 2010, it was announced that the company was facing the possibility of bankruptcy due to its “crippling debt”.[37] After 21 years, Mark Mays stepped down as president and CEO of Clear Channel on June 23, 2010.[38] Mays remained as chairman of the board.[39] Later that year, MTV co-founder Robert W. “Bob” Pittman joined the company and would eventually become CEO of CC Media Holdings.[40][41][42]
In August 2013, Clear Channel sold its minority stake in Sirius XM for $135.5 million. This also resulted in the removal of most Clear Channel-programmed stations on the service, besides simulcasts of WHTZ and KIIS-FM.[21]
On January 6, 2014, Clear Channel announced a marketing partnership with Robert F. X. Sillerman‘s SFX Entertainment (a second incarnation of a live events company that had been sold to Clear Channel, which spun off to form Live Nation), to collaborate on electronic dance music content for its digital and terrestrial radio outlets, including a Beatport top 20 countdown show.[43] The partnership expanded upon the company’s existing EDM-oriented outlets, including Evolution. Staff, including John Sykes, believed that the deal would help provide a higher level of national exposure to current and up and coming EDM artists.[44][45]
In September 2014, it was announced that the company would be renamed from Clear Channel Communications to iHeartMedia, alluding to its iHeartRadio platform to reflect the company’s growing emphasis on digital media and internet radio.[46] The previous name “Clear Channel” came from AM broadcasting, referring to a channel (frequency) on which only one station transmits. In the U.S., clear-channel stations have exclusive rights to their frequencies throughout most of the continent at night, when AM signals travel far due to skywave. CEO Bob Pittman said that the company had been “doing progressive stuff”, yet were still “named after AM radio stations”.[47]
Beginning in 2008, iHeartMedia struggled to pay down more than $20 billion in debt the company assumed from its leveraged buyout. Various media outlets, including Bloomberg News, Reuters, Radio Ink, and iHeartMedia’s hometown newspaper the San Antonio Express-News, claimed that either bankruptcy or a major restructuring was likely.[48][49][50][51] On April 20, 2017, the company warned investors that it might not survive over the following 10 months.[52]
In 2016, one of the company’s directors, Julia B. Donnelly, left the board of iHeartCommunications and was replaced by Laura A. Grattan, a director at Thomas H. Lee. Grattan was named to the board of managers of iHeartMedia Capital I, LLC, the direct parent of iHeartCommunications, as well as the board of directors of iHeartMedia, Inc., the indirect parent of iHeartCommunications.[53]
On November 30, 2017, it was reported that a group of creditors had rejected iHeartMedia’s latest debt restructuring proposal, instead bringing out a deal where the company might file for bankruptcy.[54] On March 15, 2018, the company filed for Chapter 11 bankruptcy, and claimed that it reached an agreement to restructure $10 billion of its over $20 billion in debt.[55]
In September 2018, iHeartMedia acquired HowStuffWorks‘ podcast network Stuff Media for $55 million.[56] On November 19, 2018, iHeartMedia announced its intent to acquire Jelli, the provider of a programmatic advertising platform for radio stations.[57]
In January 2019, the U.S. Bankruptcy Court for the Southern District of Texas approved a creditor-supported plan for iHeartMedia to exit bankruptcy, which would reduce the company’s debt from $16.1 billion to $5.75 billion. The plan included the spin-out of iHeartMedia’s 89.1% stake in its out-of-home advertising division Clear Channel Outdoor.[58][59] In April 2019, the company also filed a proposed initial public offering.[60]
iHeartMedia emerged from Chapter 11 bankruptcy in May 2019, with a new board of directors and the spin-out of Clear Channel Outdoor, but maintaining its existing leadership of CEO Bob Pittman and President Rich Bressler.[60] Rather than pursue its IPO (which was estimated to potentially be valued at $1.1 billion), iHeartMedia instead received approval for a direct listing on the Nasdaq.[61]
On January 14, 2020, iHeartMedia announced a major restructuring, as part of an effort to “modernize our company to take advantage of the significant investments we have made in new technology and aligning our operating structure to match the technology-powered businesses we are now in.” This included the restructuring of its Markets Group into three divisions: the Regions division for its largest markets, the Metropolitan division for other major cities, and the Communities division for smaller markets and added a multi-market partnerships unit, and announced the development of centers of excellence that would use technology investments to “provide a better experience for listeners and business partners and a more efficient process for all of its employees”.
The restructuring was accompanied by a major round of layoffs and displacements, with a large number of staff members and on-air personalities impacted.[62][63]
Businesses
iHeartMedia has purchased interest in, or outright acquired, companies in a number of media or advertising related industries. This is not an exhaustive list.
Radio
With 855 stations, iHeartMedia is the largest radio station group owner in the United States,[64] both by number of stations and by revenue. The 855 stations reach more than 110 million listeners every week, and 276 million every month. According to BIA Financial Network, iHeartMedia recorded more than $3.5 billion in revenues as of 2021, $1 billion more than the number-two group owner, Audacy.[65]
In June 2012, the company announced that it would become the first U.S. radio group to partner with record labels to pay performance royalties directly to labels and musicians (in addition to songwriters and producers). The royalties are paid via revenue sharing for advertising across platforms (including digital), rather than a flat payment each time a song is played. Big Machine Label Group was announced as the first partner in this scheme. Pittman stated that the arrangement would let “labels and artists participate in the revenue of broadcast radio immediately and in digital radio as it builds”.[66][67][68][69]
Radio acquisitions
iHeartMedia has purchased stations from or acquired the following radio companies:
- Ackerley Group[70]
- AMFM Inc.[71][72]
- Apex Broadcasting[94]
- Clark Broadcasting
- Dame Media[95][96]
- Eastern Radio Assets[97]
- Jacor[98][99]
- Citicasters Communications[100][101]
- Nationwide Communications, Inc.[102]
- Regent Communications[103]
- Noble Broadcast Group[104]
- Metro Networks[105]
- Mondosphere Broadcasting[106]
- Metroplex Communications[107]
- Paxson Communications[108]
- Quad City
- Radio Equity Partners[109]
- Roberts Radio[110]
- Taylor Broadcasting[111]
- Trumper Communications[112]
- US Radio[113]
- XM Satellite Radio (service and programming agreement)
