On November 21, RBR+TVBR shared the news that, after much speculation, a New York-based investment firm confirmed its lead role in a shareholder group that seeks to acquire Broadcast Music, Inc., the music rights group known as “BMI.”
What wasn’t known until now is just how much the nation’s No. 1 owner of radio stations will pocket from the deal, giving it much-needed cash to bolster cash flow battered by continued macroeconomic headwinds.
According to a brief statement distributed by iHeartMedia, the company led by President/CEO Bob Pittman and COO/CFO Rich Bressler said the sale of BMI to the shareholder group led by New Mountain Capital will bring a big payday to the radio station owner and podcast industry player.
Specifically, iHeart expects to receive approximately $100 million of proceeds related to its equity interest in BMI.
That payout is subject to approval of the transaction by BMI shareholders and customary regulatory approvals.
What’s the plan for iHeartMedia once it has that big chunk of cash? “The Company plans to use the proceeds for general corporate purposes, which may include the repayment of debt.”
With the transaction set to close no later than March 2024, that means iHeartMedia will likely report the additional dollars on its Q1 2024 fiscal report.
And, it is another shot in the arm for iHeartMedia with respect to dollars generated from non-advertising-related activities. In Q3 2023, the company enjoyed $45.3 million in cash proceeds from the sale of 122 tower sites. The cash was used to lower iHeart’s outstanding debt of $5.229 billon, as lease-back agreements were initiated for all but one of those tower sites.
The $100 million influx of cash represents roughly 1.91% of iHeart’s total long-term debt.
