Bob Pittman, president of iHeart Media, recently begged a San Antonio judge for a restraining order from creditors in order to stop them from putting the company into default and bankruptcy in the face of $20 billion debt.
iHeart Media currently owns 850 radio stations spanning the country. These stations include “hate radio” pundits like Glenn Beck, Michael Savage, Rush Limbaugh, and Sean Hannity. All of these talking heads have been accused of fear mongering and spreading messages of misogyny, homophobia, racism, and xenophobia. Rush Limbaugh is so infamous for spreading ignorant ideas that nearly 140,000 people have signed a petition to boycott his sponsors.
Despite the national Rush Limbaugh boycott which led to thousands of sponsors fleeing iHeart Media over the last three years, President Bob Pittman refused to make changes, losing them millions. While this was not make or break for the $20 billion in debt company, the consumer brand name damage and loss of thousands of sponsors and listeners did nothing for the flagging outlet.
Ever since the 2008 Bain Capitol acquisition, which was alleged to be a move by presidential hopeful Mitt Romney to control media and get himself elected, iHeart has been struggling. According to Billboard reports, iHeart brought in $6.5 billion in revenue in 2015, but they also had $1.74 billion expense that resulted in a net loss of $661 million.
A group of creditors claimed Monday that iHeartMedia had violated the lending agreement by shifting money from one division of the business to another. The company is seeking a temporary restraining order and a permanent injunction that would provide time to resolve the matter before its debt goes into default. iHeartMedia disagrees with the lenders, saying in a statement that the contribution “constituted a permitted investment under, and fully complied with, our financing agreements.”
The event in question was iHeartMedia’s transfer of a $200 million dividend from Clear Channel Outdoor Holdings, Inc., it’s outdoor advertising company, to a subsidiary, Broader Media LLC. The senior debt holders — senior because the have the first claim to assets if a company goes out of business — believe the stock transfer constitutes a default and might call their debt within 60 days. That default would have a cascading effect, triggering defaults on other debts the company owes.
Pittman has been able to wrangle a 14-day restraining order, however creditors threaten to force iHeart Media into bankruptcy. Due to the hateful propaganda they’ve spread, there’s no doubt that many will be celebrating iHeart Media closing their doors.