State Champ Radio iHeartMedia
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Warner Music Group’s share price didn’t improve much this week, but its 5.6% gain nevertheless led the 21 music stocks in the Billboard Global Music Index.
On Tuesday (Aug. 8), Warner Music Group (WMG) reported that its quarterly revenue increased 9% year over year in the fiscal quarter ended June 30. That was music to investors’ ears after WMG’s revenue grew just 1.7% in the previous quarter, but it wasn’t exactly a surprise: WMG executives had previously told investors that the company’s new release schedule was weighted in the back half of its fiscal year and that its financials would pick up accordingly. And a Billboard analysis of Luminate data found that the company’s U.S. market share had started to improve by early May.
Only four of the Billboard Global Music Index’s 21 stocks finished the week in positive territory. Sphere Entertainment Co., the company behind the state-of-the-art Las Vegas venue set to open in September, improved 5.5% to $39.77 and German promoter CTS Eventim gained 4.8% to 61.80 euros ($67.76). Elsewhere, Hipgnosis Songs Fund rose 3.9% to 79.8 pence ($1.01).
This was the third consecutive week the index declined in value after reaching an all-time high in the week ended July 21.
LiveOne shares dropped 4% this week despite the company raising guidance on its fiscal 2024 revenue and adjusted EBITDA. In the fiscal quarter ended June 30, the company — which is behind music streaming platform Slacker and podcast brand PodcastOne — posted revenue of $25.7 million, up 24% year over year, and adjusted EBITDA of $4.9 million, up 46% year over year.
iHeartMedia shares fell 24.9% to $3.38 this week after the company warned of continued softness in advertising. The U.S. radio giant posted second quarter revenue of $920 million, down 3.6% year over year. Other radio companies also declined. Cumulus Media fell 5.9% to $4.96, while Townsquare Media — not a member of the Billboard Global Music Index — fell 19.7% on Wednesday following the company’s second-quarter earnings results but recaptured some of the losses on Thursday and Friday to finish the week down 7.2% at $10.50.
French streaming company Deezer fell 9.4% to 2.12 euros ($2.32) this week and has lost 16% since reporting mid-year earnings on Aug. 3. The company lowered its forecast for full-year revenue growth slightly to a range of 7% to 10%, down from a more than 10% increase. Although the company’s decision to raise its price in 2022 helped its average revenue per user to increase 8.3%, its subscribers declined by 100,000 to 9.3 million from the prior-year period.
In related news, Disney shares rose 4.9% after the company’s second quarter beat earnings expectations, even as it revealed that its Disney+ subscriber count fell 7.4% to 146.1 million in the second quarter. Starting in October, Disney will raise the prices for both ad-free and ad-supported tiers of Disney+ and Hulu by at least 20%. Following the price increases, ad-free Disney+ will cost $13.99 per month and ad-free Hulu will cost $17.99 per month.
Music services have been far more hesitant than streaming video-on-demand services to raise prices. Spotify just increased its individual plan price in the United States — by $1 to $10.99 — for the first time since launching in 2011. By contrast, Hulu last raised its prices in October 2022 and has increased its the price of its ad-free tier by 39% in less than a year.
Music stocks’ decline mirrored stocks’ broad declines this week. In the United States, the S&P 500 and the Nasdaq composite fell 0.3% and 1.9%, respectively. In the United Kingdom, the FTSE 100 was down 0.5%. South Korea’s KOSPI composite index declined 0.4%. News that the U.S. producer price index, a gauge of wholesale prices, rose 3% in July — the biggest one-month gain since January — was a factor in U.S. stock prices falling Friday.
Seeing is believing for some investors in Sphere Entertainment Co., the developer of the new state-of-the-art venue, The Sphere, in Las Vegas. Shares of Sphere Entertainment soared 22.7% this week after the world saw the first videos of the dazzling display created by the 580,000 square feet of programmable LED “pucks” on Exosphere, the exterior […]
The Billboard Global Music Index improved 1.8% to 1,270.57 in the week ending June 9, marking gains in successive weeks and four out of the last six weeks. iHeartMedia was the index leader for the second straight week. Shares of the radio company were up 13.5% to $3.54 a week after rising 30.5%. Thirteen of […]
Shares of iHeartMedia jumped 30.5% to $3.12 this week, making the radio giant the best-performing stock on the Billboard Global Music Index. The company gained 25.3% on Friday (June 2) without any clear signal — such as an SEC filing or earnings release — to drive such a sharp movement. On Thursday, CEO Bob Pittman […]
Lloyd Starr has been appointed COO at Discogs, the recorded music database, marketplace and community, effective May 1. He joins the company from vinyl subscription service Vinyl Me, Please; prior to that, he served as president/COO at digital electronic music marketplace Beatport.
In his new role, Starr will oversee Discogs’ day-to-day operations, with a focus on driving growth and innovation. He will work closely with CEO Kevin Lewandowski and the rest of the executive team to develop and implement Discogs’ strategic direction.
“We’re thrilled to welcome Lloyd Starr to the Discogs team as our new COO,” said Lewandowski. “Lloyd’s extensive experience in the music industry and his track record of success in building and scaling companies make him an ideal addition to our leadership team. We’re confident that his expertise will help us continue to grow and innovate as we serve our community of music fans, record collectors, and sellers around the world.”
Starr added, “I’ve long admired the Discogs mission and its passionate community. I am thrilled to join such a talented and creative team to help realize our vision and continue to add value for vinyl and music lovers worldwide.”
Jon Kurland was named executive vp of business affairs and chief entertainment counsel at iHeartMedia. In his new role, Kurland will lead the company’s business affairs team and focus on deals and relationships with iHeart’s podcast, music, entertainment and new media partners. He will additionally oversee the company’s entertainment legal functions across podcasts, live events and new media initiatives as well as its music licensing strategy. Based in New York City, he will report to executive vp and general counsel Jordan Fasbender. Kurland joins iHeartMedia from Amazon, where he was senior corporate counsel in the global media and entertainment group.
Jen Ashworth was promoted to senior vp of commercial marketing & streaming at Capitol Music Group (CMG), up from her previous role as vp of global commercial marketing. In her new role, Ashworth will oversee the company’s streaming strategies across its portfolio of labels, with a focus on editorial and partner activations with Spotify, Apple Music, Amazon, YouTube and Pandora. She will continue managing CMG’s relationship with Spotify as the company’s account lead. Based in Hollywood, she reports to CMG executive vp of global commercial marketing strategy Mike Sherwood.
Manager Jared Rosenberg joined Red Light Management, bringing clients Aly & AJ and Disney star Kylie Cantrall to the firm. Rosenberg has been in management for over 20 years, working with artists including Backstreet Boys, Janet Jackson and Thirty Seconds to Mars.
Mateo Dorado joined Atlantic Records as senior director of A&R. The New York-based executive will work closely with emerging artists including Luh Tyler and Alicia Creti while reporting to Atlantic co-president of Black music Lanre Gaba. He arrives at Atlantic from Alamo Records, where he signed Rod Wave.
Jonathan McHugh joined independent music publishing, rights management and catalog marketing company AMR Songs as senior advisor of creative and synch. McHugh will also sit on the company’s board. Over a decades-long career, the industry veteran has served in roles at New Line Cinema (as vp of soundtrack music), Jive/BMG and Island Def Jam/Def Jam Films; he has produced 40 music-focused films and TV series and music-supervised 85 feature films and TV shows. In addition to his new role at AMR Songs, he will continue working as an independent producer/director and music supervisor while teaching a music industry studies class at Loyola University in New Orleans.
Amanda Tumulty was named vp of global marketing at Cinq Music Group. She joins the company from Universal Music Group, where she spent over five years on the global consumer marketing team, specializing in marketing strategy and operations. At Cinq, she will oversee all marketing strategies for the label/distributor’s roster and the Cinq Music brand. Tumulty can be reached at atumulty@cinqmusic.com.
Nashville-based record label Melody Place restructured and rebranded while elevating Sanborn McGraw to president/general manager and Tony Gottlieb to COO. Under the new leadership, the company will refocus its efforts on artist development, original material and international promotion. The first signing following the restructure is Nashville singer-songwriter Makena Hartlin, who signed a recording and publishing deal with Melody Place and its affiliate, Melody Place Publications. She will release her single, “LA,” on the label April 21. Melody Place is also working on a new project from singer Jackie Evancho. McGraw can be reached at sandy@melodyplace.com and Gottlieb can be reached at tony@melodyplace.com.
Global creative audio network Squeak E. Clean Studios hired music producer Jennie Armon as executive creative producer out of New York. She joins the company following seven years at Brooklyn-based music and sound company Found Objects, where she served as executive producer and music supervisor. Armon can be reached at jennie@squeakeclean.com.
BET has joined forces with iHeartMedia to bring over the award-winning radio show The Breakfast Club to its 2023 programming lineup. The famous show from New York’s Power 105.1 FM with personalities DJ Envy and Charlemagne Tha God will air a special televised edition for an hour beginning April 17 at 9 AM EST on BET and VH1, with episodes running Monday through Friday after that. Episodes from the week will be available to stream every Sunday on BET+.
“We’re thrilled to partner with iHeartMedia to bring The Breakfast Club and their unique brand of entertainment and cultural commentary to our audiences,” said BET CEO and president Scott Mills in a statement. “We recognize the show’s influence and popularity, and we are confident that the partnership will be meaningful to our viewers and to our partners. Hosts Charlamagne and DJ Envy are long time members of the BET and Paramount family, so we couldn’t be more excited to welcome The Breakfast Club home to BET.”
Adds iHeartMedia’s president of Entertainment Enterprises, John Sykes: “What began as a daily morning radio show over a decade ago in New York City has now become a cultural beacon across America. This new partnership with BET will expand the radio show’s reach to millions more watching on this iconic television network.
Since Angela Yee departed from the show last December, The Breakfast Club has enlisted celebrity guest co-hosts to occupy her spot, including Ray J, Jason Lee, Nene Leakes, and more. This also marks the BET’s first daily program since 2014 with 106 & Park.
Even as the U.S. advertising market’s slowdown stunted iHeartMedia’s post-pandemic recovery, the company posted record revenue of $3.9 billion in 2022, up 9.9% from 2021, the company announced on Tuesday (Feb. 28).
“The macro economic conditions are certainly impacting the entire advertising marketplace,” CEO Bob Pittman said during Tuesday’s earnings call. “Even the podcasting industry is not immune to some effects of the advertising slowdown.”
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $950.3 million, up 17.2% year over year. That’s the second-best adjusted EBITDA in the company’s history following 2019 when the company hit $1 billion. Annual free cash flow of $259 million was also the second-best in history after reaching $400 million in 2019.
Podcasts, the company’s fast-growing segment, generated revenue of $358.4 million in 2022, up 41.9% from the prior year. The high-growth podcasting business could benefit from what Pittman called “a transition toward more rational behaviors” in spending. Pittman didn’t point to any specific company, but an era of big spending on podcast content deals appears to be over at Spotify, where chief content officer Dawn Ostroff recently left the company and the head of audio talk shows and partnerships, Max Cutler, also departed. “I think there were people who thought they were buying [market] share, but were really buying losses,” he said.
Digital revenue other than podcasts improved 14% to $663.4 million. Broadcast radio, by far iHeartMedia’s biggest revenue source, grew 4.1% to $1.89 billion. Network revenue was flat at $503.2 million. Revenue from sponsorships and events climbed 17.9% to $189 million. Revenue from the audio and media services group jumped 22.7% to $304.3 million.
In the fourth quarter, iHeartMedia’s revenue grew 6% year over year to $1.13 billion, the high end of guidance of 2% to 6%. Adjusted EBITDA was $316 million, in the middle of its guidance range of $305 million to $325 million. Both revenue and adjusted EBITDA hit record highs for any quarter in the company’s history.
Although the company started 2022 strong, “increased volatility and uncertainty” moderated annual results, Pittman said. Some of that slowdown was “self-inflicted,” he admitted. During the fourth quarter, iHeartMedia put greater emphasis on “sales initiatives and commission structures on targeting certain incremental revenue streams,” he explained. “In retrospect, we believe those decisions had a negative impact on our revenue growth and margin for the quarter.”
As a result, iHeartMedia has “initiated steps to realign” its focus on “higher-margin digital revenue opportunities,” said Pittman. “We believe we’ll start seeing the positive impact of those adjustments in both revenue growth and margins as early as Q2.”
U.S. radio companies aren’t exactly struggling through post-pandemic recoveries, but economic conditions are preventing a stronger comeback.
The earnings releases of four U.S.-based, publicly traded radio companies – iHeartMedia, Cumulus Media, Audacy and Townsquare Media – reveal an industry in flux. While the music streaming and satellite radio businesses enjoy some security from subscription-based models that can withstand economic upheaval, the radio industry depends on advertising dollars that can fluctuate greatly. Ongoing economic problems caused some advertisers to pull back in the third quarter and cloud radio’s future.
According to Cumulus Media CEO Mary Berner, “starting in late Q2, national advertisers reduced marketing to mitigate the headwinds they face from inflationary pressures, persistent supply chain issues, finance, market turmoil and overall recession risks,” she explained during the company’s Oct. 28 earnings call. Collectively, the macroeconomic pressures resulted in a decline in broadcast revenues of roughly 5% in the third quarter, said Berner, and was the “main driver” in the company’s 2% decline in total revenue to $233.5 million.
iHeartMedia CEO Bob Pittman lamented during the company’s Nov. 3 earnings call that the business “doesn’t have the robustness that we expected.” Still, iHeartMedia, the country’s largest radio company, landed at the high end of its revenue guidance with total revenue of $989 million, up 7% from the prior-year period. Revenue of its multi-platform group — which includes broadcast radio — was $659.0 million, up 0.1% year-over-year, with the help of political advertising. “This will be the best non-presidential political year that we’ve had,” said president, COO and CFO Rich Bressler.
Townsquare Media’s third-quarter revenue of $120.6 million came in at the low end of its guidance range — $120 million to $127 million — and its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $30.9 million hit the midpoint of its guidance range of $30 million to $32 million.
Audacy was hurt by advertisers’ pullback in the third quarter. Revenue dropped 3.8% to $317 million, and radio revenues dropped 6%, due to “a substantial deterioration of market conditions,” president and CEO David Field said on the company’s Tuesday (Nov. 8) earnings call. “This has obviously taken a toll on our EBITDA and [debt] leverage and has raised concerns.”
Digital remains radio companies’ growth engines. S&P Global Market Intelligence forecasts radio digital revenues to climb 4.8% next year. iHeartMedia’s digital audio segment, which includes its podcasting business, grew 23.4% year-over-year to $254 million in the third quarter. That accounted for 26% of the company’s consolidated revenue, up from 12% in the first quarter of 2020. Podcasting revenue alone accounted for $91.3 million, up 42.1% year-over-year. At Cumulus, digital revenue growth of 20% far outstripped overall revenue growth of 5% in the third quarter. Within its digital segment, podcasting revenue grew 27% year-over-year. Townsquare Media’s digital revenue increased 17%, accounting for half of total revenues, and helped the company set records for third-quarter net revenue and adjusted EBITDA.
Radio companies have taken measures to weather financial uncertainty that will extend into 2023. Cost-cutting remains popular after companies sharply reduced expenses in 2020. IHeartMedia saved about $250 million from 2020 to 2021 — a reduction of historical annualized cost base of about 10% — and targeted an additional $75 million of annual savings this year, said Bressler. Cumulus is “on track to be more than $75 million below the 2019 baseline” of fixed costs, said Berner. Audacy added to its cash reserves by selling real estate worth $56 million in the third quarter and has plans for additional sales.
S&P Global Market Intelligence expects radio local spot advertising to improve by 3% and national ad revenues to grow 1.5%, both down significantly from 2022 growth levels. Solomon Partners estimates 0.8% audio ad spending growth in 2023 based on major advertising agency forecasts from Dentsu, GroupM, Zenith and Magna.
Whatever happens in 2023, radio companies are better prepared than they were for the pandemic in 2020. That downturn “was probably the swiftest and worst downturn I’ve ever lived through,” said iHeartMedia’s Pittman. “And even in that year we had positive free cash flow.”
Still, economic pressures have weighed heavily on radio companies’ share prices. Barrington lowered its price target for iHeartMedia shares from $18 to $13 in an investor note issued Monday. iHeartMedia shares fell 15.1% over Tuesday and Wednesday, to $6.61. Year to date, iHeartMedia shares are down 68.6%.
Shares of Cumulus Media rose 8.9% following its third-quarter earnings release on Oct. 28 — although the stock gave back those gains and more over the next week and a half. As of Wednesday, Cumulus shares are down a relatively mild 38.7% year-to-date. Investors pushed up the share price 39.9% on April 14 on news of a takeover bid by a consortium led by radio veteran Jeff Warshaw. Cumulus rejected the offer and instead offered shareholders a $50 million stock repurchase program. In June, Cumulus spent $25 million to purchase 1.7 million shares, or 8.7% of outstanding Class A shares.
Audacy shares fell 6.3% to $0.298 on Wednesday following the company’s third-quarter earnings release, bringing the year-to-date decline to 88.3%. Audacy shares were trading at $0.59 per share on Aug. 1 when the company was notified by the New York Stock Exchange that it was not in compliance with a listing standard that requires a minimum closing price of $1 over 30 consecutive trading days.
iHeartMedia Atlanta president Drew Lauter has departed the radio giant after video surfaced of the executive using racial and misogynistic slurs. The national radio conglomerate confirmed to Billboard on Friday (Oct. 14) that Lauter was no longer with the company, stating, “allegations of this nature go against our company values and our policies and we take them very seriously.”
The videos – provided to the local news station WSB-TV Atlanta, which first reported the news – shows Lauter repeatedly telling the driver, a fellow iHeartMedia executive, to “run over n—os” and using other racist language in front of two other iHeart employees, one of whom filmed the incident. According to attorneys Jason Castle and Roosevelt Jean, who are representing the client who filmed the incidents, the videos were recorded in August 2021 after a charity event.
In two videos, Lauter can be heard repeatedly using racial and sexist slurs and groping a male coworker while stating, “you better give me that t-tty.” Castle and Jean’s client – who is a top-ranking Black iHeart executive in the Atlanta region – claims to have reported the incident to his immediate supervisor at the time. He informed his attorneys that this was not the first instance of Lauter using racially insensitive language in front of employees.
In a statement provided to Billboard, an iHeart spokesperson said, “As soon as [the videos] were brought to our attention we acted quickly, retaining an outside investigator to conduct a thorough review, and when we received the outside investigator’s findings we immediately took decisive action.”
“From our client’s perspective, this isn’t about our client,” Castle tells Billboard. “It’s that this particular video is a representation of the hostile work environment and the discriminatory and racially insensitive, as well as sexually harassing environment that existed in the iHeart Atlanta offices.”
iHeart employees were reportedly informed of Lauter’s departure on Thursday, the same day the WSB-TV investigative report aired.
Castle says his client has not filed any legal action against iHeart or Lauter.
