iHeartMedia Made $101 Million From BMI Sale to New Mountain Capital

iHeartMedia received $101.4 million from the sale of BMI, in which it held a minority stake, to New Mountain Capital, the company announced Monday (Feb. 12) through an SEC filing. The sale was finalized on Feb. 8. 

iHeartMedia had previously announced on Nov. 27 that it expected to receive approximately $100 million from the sale, which had yet to finalize and clear regulatory approvals. Its ownership stake was “a little under 10%” and goes back to the creation of BMI, said iHeartMedia president/COO Rich Bressler on Nov. 29 at the Wells Fargo 7th Annual TMT Conference. BMI was founded by a group of radio broadcaster leaders in 1939 as an alternative to ASCAP.

The $101 million windfall — equal to about 31% of iHeartMedia’s $326 million market capitalization — comes at an opportune time for the company, which saw its revenue for the first nine months of 2023 fall 3.7% to $2.68 billion. The company plans to use the proceeds for general corporate purposes and to further pay down its debt. While advertising revenue was sluggish in 2023, iHeartMedia improved its balance sheet by reducing the face value of its debt from $1.5 billion to about $900 million, saving it about $43 million in annual interest payments. In addition, the company raised $45 million from the sale of radio towers in October, which will also be used to pay down debt.

BMI, which will continue to license its songwriting catalog to iHeartMedia, was founded as a non-profit organization and transitioned to a for-profit model in 2022 to help fund growth-oriented investments, president/CEO Mike O’Neill wrote in a note to employees at the time. “And most importantly,” O’Neill added, “our goal is to continue to grow our distributions at an even greater rate than we have before.”