Author Topic: IHRT - iHeartMedia  (Read 1423 times)


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IHRT - iHeartMedia
« on: August 15, 2019, 01:45:15 PM »
iHeartMedia operates broadcast radio stations and several other audio entertainment assets.  The core business has been quite stable ó neither growing nor shrinking in a meaningful way ó for a number of years now but the company went bankrupt recently due to excessive leverage.  They emerged from bankruptcy in May, re-listed in July, and just reported their first post-BK financial results.

Based on the report, it looks like they will be getting somewhere around $3.8bn in revenue, $1.1bn in EBITDA, $240m in net income, and $500m in FCF (net income + D&A - CapEx) over a 12 month period.

There are about 145m shares outstanding (including the special warrants), so at the closing share price of $13.4 their market cap is a bit below $2bn.  Their net debt is around $5.7bn.

So bottom line this seems quantitatively cheap (if a bit over leveraged), and I think shareholders will do well as long as (a) the business doesnít start declining in a big way, (b) interest rates stay reasonably low, and (c) capital allocation is reasonable.  Regarding (c), management has indicated that they will be prioritizing debt reduction for the time being, which I think is the right move.

There was an article in Barronís a few days ago that makes similar observations and also provides some more background:

The article in particular talks a bit about the companyís history/relationship with Liberty Media, which Iím sure some of you are well aware of.  I guess a related risk factor is that if the stock price were to keep going down for no good reason then the company will likely be bought out by a Liberty entity and you will not get to ride the recovery.  This may be less of an issue though if you already have a stake in the potential buyer (most likely LSXM/SIRI). 

To be clear, I have no special insights regarding the qualitative aspects of the business (e.g, the current state of broadcast radio, their growth potential in areas like podcasts, etc) and I may be missing something important thatís obvious to experts.


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Re: IHRT - iHeartMedia
« Reply #2 on: September 26, 2019, 03:10:53 AM »
Again, from competitors, but interesting discusion on podcasts and radio: