How can iHeart Media survive?

[Garrett Wollman]

<<On Wed, 2 Mar 2016 17:44:28 -0500, Kevin Vahey <kvahey@gmail.com> said:

> iHeart lost $24 a second in 2015 - how much longer can they survive?

Look at the numbers.  (The real numbers, not just AllAccess's rewrite
of the press release.)

<http://www.businesswire.com/news/home/20160225005527/en/iHeartMedia-Reports-Results-2015-Fourth-Quarter-Full>

iHeartMedia's consolidated operating income for 2015 was $1.15 billion
on near $6.25 billion in revenues; EBITDA was $1.85 billion.  That
GAAP loss is nearly entirely due to the $1.8 billion in interest
payments -- which they *almost* cover on net cash flow (if you reverse
the effects of all the non-cash charges).  On the other hand, the
shareholders are sitting on a $10 billion deficit, which means their
interest is pretty much worthless already.  So if ever they ran into a
cash crunch and couldn't find any more assets to sell off, it would be
a relatively easy chapter 11 proceeding to cancel the worthless equity
and give control of the company to the lenders.

But note that they are also doing stuff like this:

	On January 21, 2016, CCOH [Clear Channel Outdoor Holdings]
	declared a special dividend of $540 million (paid on February
	4, 2016), using proceeds relating to a $300 million demand on
	the intercompany note owed by iHeartCommunications to CCOH and
	a portion of the proceeds from the sale of the non-strategic
	domestic outdoor markets. We received approximately 90.1% of
	the dividend, or $486.5 million, with the remaining 9.9%, or
	$53.5 million, paid to the public stockholders of CCOH.

So iHeart made a debt repayment to Clear Channel Outdoor of $300
million, of which iHeart received $270.3 million back in cash.  You'd
really have to dig into the annual report to figure out what effect
this has on the company's overall indebtedness, but this could be part
of a longer-term strategy.

-GAWollman