"IHeart's going bankrupt. They're giving a golden parachute to their executives while they still owe artists millions?" — Conversations In Advocacy #15
The news broke more than two weeks ago already that iHeartMedia, the parent company to iHeartRadio, the largest terrestrial radio network in the country, was declaring bankruptcy. Since there's now been ample time for the news to sink in, let's look at just how this filing impacts the artists and songwriters to which the media conglomerate still owes millions.
IHeartMedia filed for Chapter 11 bankruptcy on March 14 to restructure an astounding $20 billion in debt, the result of a 2008 leveraged buyout by Bain Capital and Thomas H. Lee Partners. In addition to facing stiff competition in the music space, iHeartMedia's monthly interest payments were bleeding the company dry. The company made a decision in February to miss an interest payment and work on restructuring their debt, with an inevitable bankruptcy filing close behind.
Pollstar reported that among those iHeartMedia owes money to are a number of music trade organizations, including ones that benefit artists and songwriters. SoundExchange is owed $6.4 million, and Warner Music Group and Universal Music group are both owed $3.9 million. ASCAP and BMI are owed nearly $3 million, collectively, and Global Music Rights an additional $2 million — representing more funds that belong in the pockets of songwriters.
However, buried among these numbers are the bonus payouts iHeartMedia executives will receive for their role in "navigating" the company through bankruptcy. According to Digital Music News, top level management is rumored to be getting more than $15 million in bonus payments, including $9.3 million for iHeartMedia CEO Bob Pitman alone.
Some simple math tells us that these bonus buyouts could cover much of what's due artists and songwriters — but instead, they are slated to get shortchanged in the negotiated bankruptcy deal.
Considering creators already clamor for fair pay from AM/FM radio, the bonus buyouts add insult to injury.
"Conversations in Advocacy" is your weekend digital tip sheet on music advocacy and the policies that affect music makers and their craft. New installments post every Friday.
