iHeartMedia received $101.4 million from the sale of BMI, in which it held a minority stake, to New Mountain Capital, the was announced Monday (Feb. 12) via an SEC filing. The sale was finalized on February 8.
iHeartMedia previously announced on November 27 that expected to receive around $100 million from the sale, which had yet to finalize and clear regulatory approvals. Her ownership stake was “just under 10%” and dates back to the creation of BMI, the iHeartMedia president/COO said Rich Bressler on Nov. 29 at the Wells Fargo 7th Annual TMT Conference. BMI was founded by a group of radio broadcasting leaders in 1939 as an alternative to ASCAP.
The $101 million windfall — equal to about 31% of iHeartMedia's $326 million market cap — 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 repay 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 song catalog to iHeartMedia, was founded as a nonprofit and transitioned to a for-profit model in 2022 to help fund growth-oriented investments, president/CEO Mike O'Neill he wrote in a memo to employees at the time. “And most importantly,” added O'Neill, “our goal is to continue to grow our distributions at an even greater rate than we have before.”
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