iHeartMedia Announces Cost Savings Initiatives

[audiophile]

Take this with grain of salt, it's a press release.

https://investors.iheartmedia.com/news/ ... fault.aspx

[rugratsonline]

I was expecting them to announce that they're downgrading from a radio equivalent of McDonald's to a radio equivalent of a 7-Eleven.

[MWmetalhead]

Here's what the press release means in plain speak:
- We borrowed damn near as much as we could borrow under our Asset Based Line of Credit;
- We're stockpiling cash because we think our vendors and customers might be scared shitless by how piss poor our pro forma cash flow from operations looks;
- Our Asset Based Lenders (and other lenders) are basically at our mercy for the time being since the ABL credit facility does not mature until 2023 and is covenant-lite;
- We are hyping our digital business's growth without giving any hard data because the truth of the matter is such growth is only a drop in the bucket compared to how fast we're hemorrhaging revenue at our AM/FM properties, at our concert business, and at Premiere;
- We hope and pray we find a way back to positive cash flow before our Asset Based Line of Credit is deemed a current period maturity.

iHeartMedia is nothing more than a slowly melting glacier...

iHM's stock price was trading around $18 per share earlier this year. It's now trading at $7.48. Earlier this month, the price dipped below $5 per share!

BTW, their outdoor business is f*cked, too. Its stock is trading at $0.76 per share. Within the last 30 days, it was trading as low as $0.36 per share! In January, the stock was trading at much higher levels - around $3 per share.

[RadioRat]

They're going to save $150 million by cutting executive salaries and 401(k) matches? That doesn't seem likely...

[MWmetalhead]

Here's what the press release said:

In addition to the in-year expected savings of approximately $50 million related to the modernization initiatives announced in February, the Company has also initiated an additional $200 million in operating expense savings for 2020 driven by:
- Reductions in compensation for senior management and other employees
- Furloughing of certain employees that are non-essential at this time
- Suspension of new employee hiring, travel and entertainment expenses and 401(k) matching program
- Major reduction of consultant fees and other discretionary expenses

Total direct operating expense savings in 2020 are expected to be approximately $250 million

So, a good chunk of the $200 million in "new" savings comes from furloughs that will be financed by our tax dollars.

I also suspect there'll be another wave of permanent job reductions at some point.