iHeartMedia
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Jessica Hoy figured her show, Mornings With Bo and Jess on CKCE-FM (101.5 Today Radio) Calgary, Alberta, was about to undergo major changes. Her co-host, Bobby May, had already warned her that he planned to quit the station in March. Hoy did not expect management to fire her and replace the show with a podcast duo based nearly 200 miles away who are broadcast on multiple stations.
“I was quite shocked when I was let go,” says Hoy, who nevertheless points out that, these days, “A lot of stations are trying to cut costs.”
As broadcast companies contend with debt loads, advertising declines and competition from streaming services and popular podcasts like The Joe Rogan Experience, radio stations have spent the last few years laying off dozens of employees, including on-air talent. Once-popular morning shows are the latest casualties, including, in late June, WKTU-FM New York’s Carolina With Greg T and KZZU-FM Spokane, Wash.’s long-running Dave, Ken and Molly.
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“With longevity comes larger salaries, and if the return on investment isn’t there anymore, these significant moves have to be made,” says Lance Venta, owner and publisher of Radio Insight. “Most of these corporate communications groups look at the individuals as a line item on a spreadsheet.”
Sean Ross, who puts out the Ross on Radio newsletter, tells Billboard, “With a lot of heritage morning shows, radio stations find themselves in a trick bag where the show is simultaneously not quite as big as it used to be, less tenable financially after years of salary increases but is still the biggest asset the station has.”
Many of the recently fired morning-show stars did not respond to inquiries or declined to comment, as did the stations that terminated them. Carolina Bermudez, the laid-off co-host of iHeartMedia’s Carolina With Greg T, says she was “advised by my lawyer not to comment at this time,” and Kendall Hopkins of Dave, Ken and Molly says he would talk “when I’m free to.” But after Canada’s Pattison Media dropped Mornings With Bo and Jess, May posted an Instagram screed: “Radio is in terrible shape with the current CEOs and shareholders at hand nationwide and I HATE to see my coworkers go down with it. … Talents have unfortunately become just a number on a piece of paper.”
Tanner Jay, whose Jake and Tanner Show on WKSZ-FM Appleton, Wis., was canceled in November, adds that radio stations are “struggling,” and instead of spending more money on training and nurturing on-air talent, “They’re saying, ‘We might as well put all this money toward getting some Taylor Swift tickets to give away and having one or two people that have never done mornings.’”
His partner, Jake Kelly, with whom he continues to host a daily podcast, adds, “I don’t know if the higher-ups know exactly how to fix the problem. Maybe they’re just firing until they figure it out.”
Morning shows on music radio stations were once cultural and financial juggernauts — Howard Stern rose to fame on WXRK-FM New York in the 1980s, and Steve Harvey’s show on WGCI-FM Chicago helped him diversify beyond stand-up comedy and gain broader celebrity status in the ’90s. Stations still differentiate themselves regionally with flagship shows such as Winston and Mel on Denver’s Kool 105 and Mojo In the Morning on Detroit’s Channel 95.5. Many of these shows, including those by Audacy’s Gary Bryan and iHeart’s Ryan Seacrest, are syndicated and have podcasts of their own.
Kelly argues today’s broadcast morning-show hosts are overdue to update their content. Many shows, he says, rely on clichéd content such as “War of the Roses,” in which the hosts help couples confront each other on-air, often through pranks. “The fakeness of the laughter, the fakeness of the stories — Gen Zs can see through it if it’s not authentic,” he says. “My daughter’s 14, and I don’t know if she’s ever turned on the radio.”
Before their program director took them aside after a Wednesday broadcast and fired them, Kelly and Jay were moving away from conventional morning-show shtick toward more personal stories, including discussing alcoholism and family issues on-air. Their new approach did not change the station’s fortunes. Their station’s overall ratings declined in the Green Bay, Wis., market from spring 2022 to fall 2023, according to Radio Online.
Hoy, who currently works as a medical outreach coordinator for a dermatology clinic, praises her replacement crew, Crash & Mars, as “unbelievably talented.” She adds that a Calgary morning show based in Edmonton may appeal to the station’s finances, but not the community. “I do worry about what happens when local news and events happen,” she says. “It just breaks that connection with the listeners.”
A version of this story appeared in the July 20, 2024, issue of Billboard.
Sphere Entertainment Co. stock gained 5.4% to $35.04 this week after Point72 Asset Management, the hedge fund of Wall Street giant Steve Cohen, took a 5.5% stake in the company, making it one of the best-performing companies on this week’s Billboard Global Music Index.
Cohen is the owner of the New York Mets professional baseball team. Sphere’s sister company, MSG Sports — James Dolan is CEO of both companies — owns two of the city’s major professional sports franchises, the New York Knicks basketball team and the New York Rangers hockey team. The Sphere venue in Las Vegas will host its first sports event Friday evening (June 28): the National Hockey League draft.
Elsewhere, radio companies Cumulus Media and iHeartMedia gained 9.1% and 9.0% this week, respectively, as radio stocks bested other publicly traded music companies on the Billboard Global Music Index. Both Cumulus and iHeartMedia clawed back nearly half of the losses they suffered in the previous two-week period. After dropping 21.1% from June 7 to June 21, Cumulus finished up at $2.04. Similarly, iHeartMedia had lost 21.1% in the prior two weeks and finished this week at $1.09. Townsquare Media, which is not in the Index, rose 9.2% to $10.93, turning its 5% year-to-date loss into a 3.7% gain.
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Many radio companies are still having a tough 2024, however, as they slog through a challenging advertising climate. Through June 28, iHeartRadio has fallen 59.2% and Cumulus is down 61.7%.
The Billboard Global Music Index was effectively unchanged from the previous week, rising less than one point to 1,815.54. The index’s year-to-date gain was also unchanged at 18.3%. Most of the stocks showed little movement as 16 of the 20 companies fell within the range of +2.1% to -3.4%. Even though 12 of the companies posted gains, the biggest winners are among the index’s smallest companies, and those winners were overcome by losses suffered by larger companies such as Spotify (down 1.1%), CTS Eventim (down 1.3%) and SiriusXM (down 3.4%).
Streaming stocks had the worst week of any sector after losing an average of 0.4%. The top streamer was Anghami, which rose 0.9% to $1.07. Cloud Music and Deezer each lost less than 1%. LiveOne fell 1.3% to $1.57.
Reservoir Media was the week’s greatest gainer after improving 11.9% — 9.6% on Friday alone — to $7.90. The gain came without major news or analyst commentary. The last analyst to increase a price target on Reservoir was B. Riley on May 31, the day after Reservoir announced that its full-year revenue increased 18% to $145 million.
K-pop companies all had modest increases this week. HYBE gained 1.3% to 202,500 won ($146.60). SM Entertainment, also a Billboard Global Music Index member, rose 1.1% to 80,400 won ($54.21). Elsewhere, JYP Entertainment jumped 2.1% to 57,300 won ($41.48) and YG Entertainment sank 1.0% to 40,300 won ($29.18). All four stocks have fallen sharply in 2024, however, with an average year-to-date decline of 22.6%.
Major stock indexes had mixed results this week. In the United States, the Nasdaq composite rose 0.2% to 17,732.60 and the S&P 500 fell 0.1% to 5,460.48. South Korea’s KOSPI composite index gained 0.5% to 2,797.82. In the United Kingdom, the FTSE 100 dropped 0.9%. China’s Shanghai Composite Index declined 1.0% to 2,967.40.
Live Nation was the top-performing music stock and one of four stocks in positive territory this week. The concert promoter gained 2.5% to $97.02 while three other concert promotion stocks — Sphere Entertainment Co., Madison Square Garden Entertainment and CTS Eventim — each lost ground.
The Billboard Global Music Index fell 1.9% to 1,788.83 as 16 of its 20 stocks finished the week in negative territory. Music streaming companies Deezer and Anghami were two of the week’s other big winners with gains of 1.0% and 0.9%, respectively. Still, the index has risen 16.6% year to date and 12 of the 20 stocks have posted gains in 2024.
Another notable gainer this week was Believe, which closed Friday at 15.04 euros ($16.21), up 0.3% from the prior week. A closing price of 15.04 euros is above the 15.00 euros offer price by consortium of investors that aims to take Believe private. Some minority shareholders may remain, however, because the consortium, which has lined up 71.92% of share equity, will not implement a squeeze-out and force shareholders representing the remaining 28.08% of share capital to sell.
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iHeartMedia shares declined 42.7% to $1.30, leaving the radio broadcaster with a market capitalization of just $194 million. Its shares fell 36.1% on Thursday following its first-quarter earnings release and dropped another 5.8% on Friday.
As streaming has surged in popularity and economic importance, radio companies have struggled to reinvent themselves. In 2021, iHeartMedia shares surpassed $28 after the advertising market recovered from a COVID-19 pandemic-related collapse. But in the subsequent three years, its shares have lost nearly all their value as sluggish radio advertising has overshadowed iHeartMedia’s budding podcast business.
The index didn’t fall further than 1.9% because many of its most valuable companies suffered only minor losses this week. Spotify, the largest contributor to the float-adjusted index, dropped only 0.5% while HYBE, one of the index’s more valuable components, fell just 1.5%.
Those small losses, and Live Nation’s 2.5% gain, helped offset larger losses by some other valuable components of the index. Universal Music Group fell 3.1% to 28.01 euros ($30.22) and Warner Music Group dropped 7.3% to $31.64 following its fiscal second quarter earnings release on Thursday. Evercore and Morgan Stanley both dropped their price targets by $2 on WMG’s stock on Friday. Guggenheim maintain its WMG price target.
While music stocks had a rough week, stocks were broadly up around the world. In the United States, the S&P 500 gained 1.9% to 5,222.68 and the Nasdaq composite improved 1.1% to 16,340.87. In the United Kingdom, the FTSE 100 rose 2.7% to 8,433.76. South Korea’s KOSPI composite index gained 1.9% to 2,727.63. China’s Shanghai Composite Index rose 1.6% to 3,154.55.
iHeartMedia shares fell 36.1% on Thursday after the company’s first-quarter earnings showed continued uncertainty in broadcast advertising mixed with improvements in its digital business.
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iHeartMedia’s loss of 12 cents per share bested analysts’ estimate of a loss of 55 cents per share, according to MarketWatch, and its revenue ($799 million) and adjusted earnings before interest, taxes, depreciation and amortization ($105 million) both fell within the guidance it provided.
CEO Bob Pittman and COO and CFO Rich Bressler reminded listeners to Thursdays’ earnings call that the first quarter is historically the slowest period of the year. They also reiterated the company’s optimism about 2024 and the expected benefits of political advertising in the second half of the year.
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“Although the marketplace continues to be dynamic, with a changing outlook on interest rates, inflation trends and global and domestic uncertainty, we remain confident that this is a recovery year highlighted by the strong momentum and our podcast business and the sequential improvement of our multi platform groups year over year adjusted EBITDA performance,” said Pittman.
The current quarter may be an improvement over the first quarter, but iHeartMedia doesn’t expect much improvement over 2023. Thursday’s guidance for Q2 revenue as “approximately flat” compared to the prior-year quarter’s revenue of $920 million was slightly below analysts’ consensus of $935 million, according to Zacks Equity Research. April revenue is expected to be down 0.4%, Bressler said, and the multi-platform group’s gross revenue is expected to be down “mid-single digits” in the second quarter.
iHeartMedia shares dropped to $1.38 on Thursday, bringing their year-to-date loss to 48.3%. Thursday’s closing price was 70.8% below the stock’s 52-week high of $4.73 established on July 31, 2023.
Another blemish was the first quarter’s free cash flow (FCF) was negative $88 million, although it was improvement from negative $133 million in the prior-year quarter. First-quarter FCF did not include the $101 million iHeartMedia received from the sale of BMI to New Mountain Capital in February.
Total revenue of $799 million was down 1.5% from the prior-year period. The multi-platform group, which includes iHeartMedia’s broadcast radio networks and events business, suffered the biggest declines: revenue fell 6.7% to $493 million and adjusted EBITDA dropped 11% to $77 million.
Led by growth in podcasts, digital audio group revenue rose 7.0% to $239 million and adjusted EBITDA jumped 25.9% to $68.1 million. In the audio and media services division, revenue improved 12.7% to $69.2 million and adjusted EBITDA soared 54.4% to $23.7 million.
The radio business’ slog through a slow advertising market appears to be improving in 2024. “As we look to the year ahead, we see 2024 as a recovery year and we expect a return-to-growth mode,” iHeartMedia CEO Bob Pittman said during the company’s Thursday (Feb. 29) earnings call for the fourth quarter of 2023. Explore […]
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, […]
The Billboard Global Music Index — a diverse collection of 20 publicly traded music companies — finished 2023 up 31.3% as Spotify’s share price alone climbed 138% thanks to cost-cutting and focus on margins. Spotify is the single-largest component of the float-adjusted index and has one of the largest market capitalizations of any music company.
The music index was outperformed by the tech-heavy Nasdaq composite, which gained 43.4% with the help of triple-digit gains from chipmaker Nvidia Corp (+239%) and Meta Platforms (+194%). But the Billboard Global Music Index exceeded some other major indexes: the S&P 500 gained 24.2%, South Korea’s KOSPI composite index grew 18.7% and the FTSE 100 improved 3.8%.
Other than Spotify, a handful of major companies had double-digit gains in 2023 that drove the index’s improvement. Universal Music Group finished the year up 14.7%. Concert promoter Live Nation rode a string of record-setting quarters to a 34.2% gain. HYBE, the increasingly diversified K-pop company, rose 34.6%. SM Entertainment, in which HYBE acquired a minority stake in March, gained 20.1%.
A handful of smaller companies also finished the year with big gains. LiveOne gained 117.4%. Reservoir Media improved 19.4%. Chinese music streamer Cloud Music improved 15.8%.
The biggest loser on the Billboard Global Music Index in 2023 was radio broadcaster iHeartMedia, which fell 56.4%. Abu Dhabi-based music streamer Anghami finished 2023 down 34.8%. After a series of large fluctuations in recent months, Anghami ended the year 69% below its high mark for 2023. Hipgnosis Songs Fund, currently undergoing a strategic review after shareholders voted against continuation in October, finished the year down 16.6%.
Sphere Entertainment Co., which split from MSG Entertainment’s live entertainment business back in April, ended 2023 down 24.4%. Most of that decline came before the company opened its flagship venue, Sphere, in Las Vegas on September 29, however. Since U2 opened the venue to widespread acclaim and earned Sphere global media coverage, the stock dropped only 8.5%.
For the week, the index rose 1.1% to 1,534.07. Fourteen of the index’s 20 stocks posted gains this week, four dropped in price and one was unchanged.
LiveOne shares rose 15.7% to $1.40 after the company announced on Friday (Dec. 29) it added 63,000 new paid memberships in December and surpassed 3.5 million total memberships, an increase of 29% year over year. iHeartMedia shares climbed 14.6% to $2.67. Anghami continued its ping-pong trajectory by finishing the week up 16.9%.
Shares of iHeartMedia got a boost from the sale of its stake in BMI, rising 7.9% to $3.00 and making the radio giant the best-performing music stock of the week.
The company announced on Monday (Nov. 27) that it expected to receive approximately $100 million from the sale of BMI to New Mountain Capital. With a current market capitalization of just $423 million, the $100 million pre-tax windfall could provide a boost to a stock that has fallen 51.1% this year. iHeartMedia’s announcement said the company plans to use the proceeds for general corporate purposes, “which may include the repayment of debt.” At the 2023 Wells Fargo TMT Summit on Wednesday, CFO Rich Bressler told investors, “You should assume that we will reduce debt with it.”
The BMI sale follows iHeartMedia’s announcement in its third-quarter earnings that it has paid off $519 million of debt since the second quarter of 2022. In the third quarter, the company retired $89 million in principal balance for $65 million cash, according to its Q3 2023 investor presentation. Debt reductions to date are expected to save the company about $43 million in annual cash interest. Additional debt redemptions aided by the BMI sale will further reduce interest expenses and help its bottom line while the advertising market recovers. “I think we’re in terrific shape from the liquidity generation and free cash flow,” Bressler said on Wednesday, “and also in terrific shape to be able to take advantage of opportunities in the marketplace to improve the capital structure.”
The Billboard Global Music Index dropped 0.2% to 1,449.08 as nine of the 20 stocks finished the week in positive territory, 10 stocks posted losses and one was unchanged. Year to date, the index has gained 24.1%.
The week was notable for the unremarkable movements — either positive or negative — in most stock prices. In the absence of earnings results or major news releases, the biggest companies on the Billboard Global Music Index were confined to a narrow band of results. Warner Music Group shares rose 3.8% to $34.59, Universal Music Group gained 1.5% to 24.60 euros ($26.80), Spotify fell 0.5% to $180.75 and Live Nation dropped 3.9% to $84.23.
Anghami, the Abu Dhabi-based music streamer, had the index’s largest drop, diving 18.1% to $2.30. Still, the company’s share price is up 44.2% year to date and has gained 129% since receiving a notification, from the Nasdaq Stock Market in October, regarding its stock’s closing price falling under the $1.00 per share threshold for 30 consecutive days. Companies whose stocks fall below $1.00 for extended periods face being de-listed from the exchange.
While music stocks dropped slightly, some major indexes finished the week at new highs. On Friday, the S&P 500 rose 0.8% to 4,594.63, its highest mark of 2023 and its best showing since March 2022. The Dow Jones Industrial Average, a collection of 30 blue-chip companies, rose 2.4% to a new all-time high of 36,245.50. The Nasdaq composite gained 0.4% to 14,305.03 — nowhere close to its all-time record of 16,057.44 set in 2021 but close to its 2023 high of 14,446.55 set on July 19. In the United Kingdom, the FTSE 100 gained 0.5% to 7,529.35. South Korea’s KOSPI composite index grew 0.3% to 2,505.01.
iHeartMedia shares dropped 19.6% to $2.01 this week as the company warned investors of continued softness in radio advertising dollars. Fourth quarter results “will be weaker than we originally anticipated,” said CEO Bob Pittman during Thursday’s earnings call. In October, consolidated revenue was down 8% from the prior-year period. For the fourth quarter, iHeartMedia expects consolidated revenue excluding political ad revenue to decline in the low single digits.
Still, iHeartMedia’s third-quarter results were in line with previous guidance. Revenue of $953 million was down 3.6% from the prior-year period, a bit better than the guidance of a low single-digit decrease. Adjusted earnings before interest, taxes, depreciation and amortization of $204 million was within the guidance of $195 million to $205 million.
The week’s sharp decline brought iHeartMedia’s year-to-date loss to 67.2%, far deeper than the declines of broadcast radio company Cumulus Media (-21.9%) and satellite radio company SiriusXM (-20.7%). Not only has broadcast radio suffered from weak national advertising, it lacks the high growth rates of music streaming and podcasting. PwC’s latest forecasts call for U.S. radio advertising revenues to rise just 4% from 2023 to 2027 while U.S. podcast advertising — where iHeartMedia has a large footprint — will grow 41% to $2 billion.
Next year’s elections should provide a shot in the arm, though. “As we look forward to 2024, we expect to generate significantly better free cash flow driven in part by an improving macro environment, as well as the impact of political dollars,” said CFO Rich Bressler. In 2020, the company generated $167 million in political revenues, he noted.
The Billboard Global Music Index mostly held steady this week, dropping just 0.3% to 1,390.68. Of the index’s 20 stocks, seven gained this while while 13 finished in negative territory. Most stocks had low-single-digit gains or losses and iHeartMedia was the only stock with a double-digit move in either direction.
French company Believe was the index’s greatest gainer of the week after improving 7.4% to 9.93 euros ($10.64). German concert promoter CTS Eventim, which will release third-quarter earnings on Nov. 21, gained 5.5% to 62.75 euros ($67.24). Music streaming company LiveOne gained 4.7% to $1.12. Chinese music streamer Cloud Music, which has not yet announced the date of its third-quarter earnings release, gained 3.3% to 99.50 HKD ($12.74).
Shares of Sphere Entertainment Co. dropped 1.5% to $35.95 after a roller-coaster week. Following the company’s Nov. 3 announcement that CFO Gautum Ranji had left the company, Sphere Entertainment shares dropped 9.6% to $32.97 on Monday. The share price fell an additional 4.5% to $31.87 on Wednesday following the quarterly earnings release. But Sphere Entertainment picked up momentum in the latter half of the week, gaining 12.8% over Thursday and Friday to close at $35.95.
U.S. stocks were broadly up this week despite news that consumer sentiment declined in November and expectations for future inflation reached their highest level since 2011. The Nasdaq composite rose 2.4% while the S&P 500 improved 1.3%. Many major U.S. tech stocks posted big gains. Microsoft hit an all-time high of $370.09 on Friday and finished the week at $369.67, up 4.8%. Apple rose 5.5% to $186.40. Amazon improved 3.6% to $143.56. Meta jumped 4.5% to $32.8.77. In the United Kingdom, the FTSE 100 fell 0.8%. South Korea’s KOSPI composite index gained 1.7%.
Music companies’ third-quarter earnings reports have so far been full of good news and positive trends. Subscription and streaming growth continue to drive revenues for record labels and publishers. Live entertainment continues its post-pandemic expansion. Margins are healthy. Overall, these have been solid report cards for the state of the music business.
Among the companies to report thus far are Universal Music Group, Sony Music, Spotify, Believe, Sphere Entertainment Co., MSG Entertainment, HYBE and SiriusXM. Next week’s earnings reports will come from Warner Music Group (Nov. 16) and Tencent Music Entertainment (Nov. 14). German concert promoter CTS Eventim will report on Nov. 21.
Here are seven items from the earnings releases to date that stood out and deserve more attention.
Universal Music Group struck out against “merchants of garbage.” During Universal Music Group’s Oct. 26 earnings call, chairman and CEO Lucian Grainge got a lot of attention when he bemoaned the “merchants of garbage” — creators of low-value functional music such as generic mood music and nature sounds — that want to be on equal royalty terms at streaming platforms as such UMG artists as Taylor Swift, The Beatles and The Rolling Stones. Grainge’s memorable turn of phrase came in defense of UMG’s artist-centric royalty scheme crafted in partnership with French music streaming service Deezer. “Sorry, I can’t really think of another word for content that no one really actually wants to listen to,” Grainge said.
Spotify’s price increase gave a much-needed uplift to subscription revenues. The price for an individual Spotify subscription in the U.S. was $9.99 from 2011 to July 2023. The price hike to $10.99 in roughly 50 markets may have arrived later than its competitors, but it came just when Spotify needed a boost. Spotify’s premium average revenue per user dropped 6% year over year (1% at constant currency) mainly because the company had a larger share of family plans compared to the prior-year, CFO Paul Vogel said during the July 25 earnings call. Early returns from the price increase in the U.S., U.K. and dozens of other markets helped offset those losses. Because Spotify’s number of subscribers increased 16% year over year to 226 million, subscription revenue grew 10% year over year (16% at constant currency) to 2.9 billion euros ($3.1 billion). With three full months of a price increase in the fourth quarter and considering the price increase covered about 75% of Spotify’s revenue base, the company expects the price increase to provide “a positive, mid-single digit” benefit (excluding foreign exchange) in the fourth quarter, said Vogel.
No company lowered guidance, and some have raised guidance. Sony Music raised guidance for revenue and adjusted operating income before depreciation and amortization by 5% and 4%, respectively. Reservoir Media raised guidance for fiscal 2024 revenue and adjusted EBITDA by 10% each. It’s one thing for a company to meet expectations it had previously laid out to investors. But raising previously released expectations is something else altogether — a sign the future will be better than expected. It’s usually a benefit to the stock price, too. The share price is the present value of future cash flows. When an estimate for future cash flows takes a sudden jump, that changes the financial model used to calculate the share price.
Consumers aren’t slowing their spending on live music. In August, concerns arose that a resumption of student loan payments, paused to help people struggling during the pandemic, would take a bite out of pocketbooks and cause music fans to pull back on the record amounts they were spending on live entertainment. Three months later, there is no indication that consumers are slowing down, according to Live Nation. “We’re seeing no sign of weaknesses,” said president and CFO Joe Berchtold, noting that Ticketmaster’s October sales in North American were up double-digits year over year. “We’re not seeing any pullback in any way from a club to a stadium tour from Milan to Argentina right now,” added president and CEO Michael Rapino.
SM Entertainment has big plans for its new publishing subsidiary, Kreation Music Rights. The K-pop stalwart has been “aggressively recruiting global writers” and plans to have 80 of them under contract this year, CEO Jang Cheol Hyuk said during the Nov. 8 earnings call. SM Entertainment is pursuing collaborations with both domestic and international publishers and plans to recruit foreign writers “who wish to advance into K-pop by establishing overseas subsidiaries,” Jiang said.
Radio advertising continues to struggle — but the clouds may be starting to part. iHeartMedia’s October revenues were down 8% and the company expects its fourth-quarter revenue excluding political revenue to be down in the mid-single digit percent year over year. The fourth quarter will be iHeartMedia’s strongest quarter of the year “but will be weaker than we originally anticipated due to some dampening of advertising demand which coincided with the uncertainty caused by the recent geopolitical events,” CEO Bob Pittman said during Thursday’s earnings call. That said, iHeartMedia’s digital business “is sort of in recovery mode,” said Pittman, and the company is “seeing the pieces falling into place” for radio’s recovery as most advertisers expect to be “back in growth mode…and spending to support that” in 2024.
The market for catalog acquisitions isn’t slowing down. Reservoir Media CEO Golnar Khosrowshahi said catalog prices aren’t contracting despite higher interest rates. “We’re still seeing a lot of demand for assets and continued infusion of new capital within the competitive set,” she said during Tuesday’s earnings call. “And that is certainly fueling the demand. The pipeline is robust. And it ranges in size from large to a lot of smaller deals.” Reservoir Media hasn’t been suffering from sticker shock, though. Acquisitions in the Middle East-North Africa market — such as some catalog of Saudi Arabian label Mashrex in June — provide the company with good value, Khosrowshahi added. “If we’re looking at a market here that is somewhat saturated with a lot of capital in the marketplace, and we’re able to execute [deals in MENA] at these lower multiples, that makes it just that much more attractive to us.”